Overview
FAR 32.605 establishes the specific circumstances under which a Contracting Officer must issue a formal final decision regarding a contract debt and prescribes the administrative procedures for delivering that decision.
Key Rules
- Mandatory Issuance: A final decision is required if the parties cannot agree on the debt's existence or amount, if the contractor fails to pay a demand for payment (and hasn't requested an installment plan), or if the contractor requests a deferment of collection.
- Consistency in Timing: If a demand for payment was previously issued, the final decision must maintain the original due date to ensure interest and collection timelines remain consistent.
- Procedural Requirements: The decision must be issued in accordance with FAR 33.211 and sent via certified mail (return receipt requested) or another method that provides evidence of receipt.
- Notification: The Contracting Officer is required to forward a copy of the final decision to the contract's designated payment office.
Practical Implications
- Issuing a final decision formally triggers the contractor's appeal rights under the Disputes clause, transitioning the debt from a matter of negotiation to a formal legal process.
- By maintaining the original due date from the first demand letter, the government prevents contractors from resetting the interest clock or delaying collection through the administrative final decision process.