52.232-9 Limitation on Withholding of Payments
Source: FAR 52.232-9 on acquisition.gov
FAR 52.232-9 limits the total amount withheld from contractor payments to the largest single authorized withholding, preventing excessive cumulative withholdings except for specified exceptions.
Overview
FAR 52.232-9, Limitation on Withholding of Payments, establishes a cap on the total amount that can be temporarily withheld from contractor payments when multiple contract clauses or schedule terms authorize such withholdings. The clause ensures that, except for specific exceptions, the total withheld at any one time does not exceed the largest single withholding amount authorized by any one clause or term. This prevents excessive cumulative withholdings that could unduly impact contractor cash flow. Exceptions include withholdings related to employee wages or hours, those not specifically provided for in the contract, recovery of overpayments, and any other withholdings the Contracting Officer deems exempt from this limitation. The clause is required in contracts for supplies, services, time-and-materials, labor-hour, or R&D that contain two or more withholding provisions.
As prescribed in 32.111(b)(2), insert a clause substantially as follows, appropriately modified with respect to payment due dates in accordance with agency regulations, in solicitations and contracts when a supply contract, service contract, time-and-materials contract, labor-hour contract, or research and development contract is contemplated that includes two or more terms authorizing the temporary withholding of amounts otherwise payable to the contractor for supplies delivered or services performed:
Limitation on Withholding of Payments (Apr 1984)
If more than one clause or Schedule term of this contract authorizes the temporary withholding of amounts otherwise payable to the Contractor for supplies delivered or services performed, the total of the amounts withheld at any one time shall not exceed the greatest amount that may be withheld under any one clause or Schedule term at that time; provided, that this limitation shall not apply to-
(a) Withholdings pursuant to any clause relating to wages or hours of employees;
(b) Withholdings not specifically provided for by this contract;
(c) The recovery of overpayments; and
(d) Any other withholding for which the Contracting Officer determines that this limitation is inappropriate.
(End of clause)