32.908
Contract clauses
FAR 32.908 mandates the use of specific Prompt Payment clauses based on contract type and allows limited flexibility in payment and acceptance timelines to ensure timely contractor payments.
Overview
FAR 32.908 prescribes the use of specific Prompt Payment contract clauses in government solicitations and contracts, depending on the contract type. It ensures timely payments to contractors and provides flexibility for contracting officers to adjust certain payment timelines to accommodate government inspection and acceptance processes. The section details when to use clauses 52.232-25, 52.232-26, and 52.232-27, and outlines permissible modifications to payment and acceptance periods under certain conditions. It also addresses exceptions for commercial contracts and cost-reimbursement service contracts.
Key Rules
- Prompt Payment Clauses by Contract Type
- Use 52.232-26 for fixed-price architect-engineer contracts, 52.232-27 for construction contracts, and 52.232-25 for all other contracts unless commercial terms or other authorities apply.
- Modifying Acceptance and Payment Periods
- Contracting officers may extend acceptance or approval periods beyond standard days if needed for inspection or evaluation, and may shorten payment periods to as little as 7 days if agency policy allows.
- Special Cases
- For cost-reimbursement service contracts, use 52.232-25 with Alternate I. Do not use 52.232-25 when 52.212-4 or other governmental payment authorities apply.
Responsibilities
- Contracting Officers: Insert the correct prompt payment clause, modify periods as authorized, and ensure compliance with agency policies.
- Contractors: Understand which prompt payment clause applies and the payment/acceptance timelines.
- Agencies: May set policies for shorter payment periods and oversee compliance with prompt payment requirements.
Practical Implications
- Ensures contractors are paid promptly, reducing financial risk.
- Contracting officers must carefully select and, if needed, tailor clauses to contract circumstances.
- Failure to use the correct clause or modify periods appropriately can result in payment delays or noncompliance.