Overview
FAR 32.901 defines the scope of the Prompt Payment subpart, specifying that it governs standard invoice payments across most federal contracts while explicitly excluding certain payment types and regulatory jurisdictions.
Key Rules
- General Scope: The regulations apply to all invoice payments made under government contracts.
- Regulatory Exceptions: The subpart does not apply if payment terms and late payment penalties are already established by a different governmental authority (such as regulated utility tariffs).
- Financing Exclusion: These rules do not apply to contract financing payments (e.g., advance payments, progress payments, or performance-based payments) as defined in FAR 32.001.
Practical Implications
- Contractors are entitled to Prompt Payment Act interest on late payments for delivered goods or services, but they cannot claim the same interest penalties on delayed contract financing requests.
- Administrative staff must distinguish between "invoices" (for work completed) and "financing requests" (for ongoing work) to determine which payment protection rules apply.