32.901
Applicability
FAR 32.901 clarifies that prompt payment rules apply to invoice payments on most contracts, but not to contract financing payments or contracts governed by other governmental payment authorities.
Overview
FAR 32.901 defines the scope of Subpart 32.9, clarifying when the prompt payment rules apply. Specifically, it states that the subpart covers invoice payments on all contracts unless those contracts have payment terms and late payment penalties set by another governmental authority, such as tariffs. Importantly, it excludes contract financing payments from its coverage, directing readers to the definition in FAR 32.001 for further clarification. This section ensures that contractors and contracting officers understand which payments are subject to the prompt payment requirements and which are not.
Key Rules
- Applicability to Invoice Payments
- The prompt payment rules apply to all contract invoice payments unless another governmental authority sets different terms and penalties.
- Exclusion of Contract Financing Payments
- Payments classified as contract financing are not covered by this subpart and are governed by separate regulations.
Responsibilities
- Contracting Officers: Must determine if the contract is subject to prompt payment rules or if another authority's terms apply; ensure correct classification of payments.
- Contractors: Should understand whether their payments fall under prompt payment rules or are excluded as contract financing payments.
- Agencies: Must ensure compliance with the correct payment terms and communicate applicability to contractors.
Practical Implications
- This section exists to prevent confusion about when prompt payment rules apply, helping avoid disputes over payment timing and penalties.
- It impacts daily contracting by requiring careful review of contract payment terms and payment types.
- Common pitfalls include misclassifying payments or overlooking exceptions established by other authorities.