52.232-36
Payment by Third Party
Contractors must follow specific procedures to receive payments via third parties, including resolving any delinquent debt and providing documentation, or risk losing access to this payment method.
Overview
FAR 52.232-36, Payment by Third Party, establishes the requirements and procedures for contractors to receive payments via a third party, such as through a Governmentwide commercial purchase card, instead of direct payment from the Government. This clause outlines when and how third-party payments are authorized, the contractor’s obligations for submitting payment requests, and the documentation and compliance requirements associated with this payment method. It also addresses restrictions related to delinquent debt and clarifies that payments made by a third party are not considered Government payments under the Prompt Payment Act.
Key Rules
- Third-Party Payment Authorization
- Contractors must accept payments through a third party (e.g., purchase card) unless otherwise specified, and the specific third party is identified elsewhere in the contract.
- Delinquent Debt Restriction
- If the contractor has delinquent debt in SAM subject to the Treasury Offset Program, payment by purchase card is not authorized until the debt is resolved.
- Payment Request Procedures
- Contractors submit payment requests by charging the Government account with the third party, following contract terms, unless otherwise instructed by the Contracting Officer.
- Agreement Requirement
- No payment is due until an agreement is made between the contractor, the third party, and any financial agents involved.
- Documentation
- Contractors must provide documentation of each charge to the Contracting Officer upon request.
- Assignment of Claims Prohibition
- Payments made under this clause cannot be assigned under the Assignment of Claims Act or related contract terms.
- Other Payment Terms
- All other payment terms in the contract remain in effect, and contractors must seek guidance if required information is not covered by the third-party agreement.
Responsibilities
- Contracting Officers: Must notify contractors when purchase card payments are not authorized and provide instructions for alternative payment requests; may request charge documentation.
- Contractors: Must comply with third-party payment procedures, resolve any delinquent debt, provide documentation as requested, and follow all other contract payment terms.
- Agencies: Oversee compliance with payment procedures and ensure proper use of third-party payment methods.
Practical Implications
- This clause enables streamlined payments via third parties, often expediting contractor payment but introduces additional compliance steps, especially regarding delinquent debt and documentation. Contractors must monitor their SAM status and maintain clear records of all third-party charges. Failure to comply can delay payments or result in loss of payment method authorization.