Overview
FAR 32.602 establishes a clear separation of duties between the contracting officer and the payment office regarding the identification, demand, and collection of contract debts.
Key Rules
- Contracting Officer (CO) Responsibility: The CO is primarily responsible for identifying contract debts and issuing formal demands for payment, except in cases of payment office errors.
- Prohibitions on the CO: The CO is strictly prohibited from personally collecting funds or unilaterally agreeing to debt liquidation methods, such as offsetting debts against unpaid invoices.
- Payment Office Responsibility: The payment office is tasked with the actual collection of debts identified by the CO, as well as the identification and collection of duplicate or erroneous payments.
- Liquidation Authority: Only the payment office has the authority to authorize the liquidation of debts (e.g., via offset) in accordance with specific agency procedures.
Practical Implications
- Separation of Duties: This section ensures financial integrity by separating the administrative function of debt identification (CO) from the fiscal function of debt collection and accounting (Payment Office).
- Negotiation Limits: Contractors cannot negotiate debt repayment or offset schedules solely with a CO; they must engage the payment office for the actual financial resolution of outstanding debts.