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SUBPART 232.9--PROMPT PAYMENT

(Revised April 27, 2011)

 

 



 232.901 Applicability.
 232.903 Responsibilities.
 232.904 Determining payment due dates.
 232.906 Making payments.
 232.908 Contract clauses.


232.901  Applicability.

 

     (1)  Except for FAR 32.908, FAR subpart 32.9, Prompt Payment, does not apply when-

 

              (i)  There is-

 

                    (A)  An emergency, as defined in the Disaster Relief Act of 1974;

 

                    (B)  A contingency operation (see FAR 2.101(b)); or

 

                    (C)  The release or threatened release of hazardous substances (as defined in 4 U.S.C. 9606, section 106);

 

              (ii)  The head of the contracting activity has made a determination, after consultation with the cognizant comptroller, that conditions exist that limit normal business operations; and

 

              (iii)  Payments will be made in the operational area or made contingent upon receiving supporting documentation (i.e., contract, invoice, and receiving report) from the operational area.

 

     (2)  Criteria limiting normal business operations during emergencies and contingency operations that restrict the use of FAR 32.9 may include such conditions as—

 

              (i)  Support infrastructure, hardware, communications capabilities, and bandwidth are not consistently available such that normal business operations can be carried out;

 

              (ii)  Support resources, facilities, and banking needs are not consistently available for use as necessary in carrying out normal business operations;

 

              (iii)  Military mission priorities override the availability of appropriately skilled personnel in support of back-office operations;

 

              (iv)  Mobility impairments and security concerns restrict free movement of personnel and documents necessary for timely processing;

 

              (v)  Foreign vendors are not familiar with or do not understand DoD contract requirements (i.e., proper invoice, receiving documentation, and contracting terms); or

 

              (vi)  Documents received in support of payment requests and shipments require language translations that cannot be performed and documented within normal business processing times.

 

     (3)  Subsequent Determinations. The head of the contracting activity shall make subsequent determinations, after consultation with the cognizant comptroller, as the operational area evolves into either a more stable or less stable environment.

 

              (i)  If the head of the contracting activity determines that the operational area has evolved into a more stable environment, the contracting officer shall notify, by issuance of a contract modification, each contractor performing in the operational area under review. The modification deactivates this clause 252.232-7011 and activates the applicable FAR Prompt Payment clause in the contract.

 

              (ii)  If after deactivation of this clause, the head of the contracting activity subsequently determines that the operational area has evolved into a less stable environment, the head of the contracting activity will make a determination that conditions exist that limit normal business operations. The contracting officer will then reactivate this clause 252.232-7011 by issuance of a contract modification.

 

232.903  Responsibilities.

DoD policy is to assist small business concerns by paying them as quickly as possible after invoices and all proper documentation, including acceptance, are received and before normal payment due dates established in the contract (see 232.906(a)).

 

See DoD Class Deviation 2011-O0007, Class Deviation—Requirement for Accelerated Payments to Small Businesses, dated April 27, 2011. This deviation is effective until DoD entitlement and payment systems are modified to accommodate accelerated payments.

 

232.904  Determining payment due dates.

 

      (d)  In most cases, Government acceptance or approval can occur within the 7-day constructive acceptance period specified in the FAR Prompt Payment clauses. Government payment of construction progress payments can, in most cases, be made within the 14-day period allowed by the Prompt Payment for Construction Contracts clause. While the contracting officer may specify a longer period because the period specified in the contract is not reasonable or practical, such change should be coordinated with the Government offices responsible for acceptance or approval and for payment. Reasons for specifying a longer period include but are not limited to: the nature of the work or supplies or services, inspection or testing requirements, shipping and acceptance terms, and resources available at the acceptance activity. A constructive acceptance period of less than the cited 7 or 14 days is not authorized.

 

232.906  Making payments.

 

      (a)(i)  Generally, the contracting officer shall insert the standard due date of 14 days for interim payments on cost-reimbursement contracts for services in the clause at FAR 52.232-25, Prompt Payment, when using the clause with its Alternate I.

 

      (ii)  The restrictions of FAR 32.906 prohibiting early payment do not apply to invoice payments made to small business concerns. However, contractors shall not be entitled to interest penalties if the Government fails to make early payment.

                      

 

232.908  Contract clauses.

 

        Use the clause at 252.232-7011, Payments in Support of Emergencies and Contingency Operations, in solicitations and contracts in addition to the approved clause prescribed in FAR 32.908 in acquisitions that meet the applicability criteria at 232.901(1).

 


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