32.902
Definitions
Understanding these definitions is critical for proper compliance with prompt payment requirements and accurate processing of government contract payments.
Overview
FAR 32.902 provides definitions for key terms used throughout Subpart 32.9, which governs prompt payment requirements in federal contracting. Understanding these definitions is essential for both contractors and contracting officers to ensure proper interpretation and compliance with payment procedures, especially regarding discounts, invoice types, and payment processing timelines.
Key Rules
- Discount for Prompt Payment
- Defined as a reduction in invoice payment offered by the contractor if the government pays before the due date.
- Mixed Invoice
- An invoice containing items with different payment due dates.
- Payment Date
- The date a payment check is dated or, for EFT, the date funds are settled.
- Settlement Date
- For EFT, the date the payment is credited to the contractor’s bank.
Responsibilities
- Contracting Officers: Must apply these definitions when interpreting and enforcing prompt payment clauses.
- Contractors: Should use these definitions to structure invoices and offer prompt payment discounts appropriately.
- Agencies: Ensure payment processes align with these definitions to avoid disputes or late payment penalties.
Practical Implications
- These definitions clarify how and when payments are considered made, which affects interest calculations and compliance with prompt payment rules.
- Misunderstanding these terms can lead to payment delays, disputes, or lost discount opportunities.
- Accurate use of these terms ensures smoother financial transactions and compliance with federal payment standards.