Overview
FAR 32.1106 establishes the authorized technical methods for Electronic Funds Transfer (EFT), distinguishing between standard domestic systems and the requirements for international or foreign currency transactions.
Key Rules
- Domestic Standards: The standard EFT clauses (52.232-33 and 52.232-34) are limited to the U.S. Automated Clearing House (ACH) and the Fedwire Transfer System using U.S. currency.
- Domestic Deviations: The head of an agency, with concurrence from the payment office, may authorize alternative domestic EFT mechanisms beyond ACH and Fedwire.
- Non-domestic Default: For payments made outside the United States and Puerto Rico, or payments made in foreign currency, the government's default requirement is to provide payment by means other than EFT.
- International EFT Exceptions: EFT may be authorized for foreign or non-USD payments only if the agency head and payment office determine that the local infrastructure supports EFT and that foreign currency can be handled safely.
Practical Implications
- Contractors operating within the U.S. must ensure their financial institutions support ACH or Fedwire to receive timely payments under standard contract clauses.
- Contractors performing work overseas or receiving foreign currency should prepare for non-electronic payment methods (such as paper checks or manual transfers) unless they secure specific agency authorization based on the host country's financial stability.