Overview
FAR Subpart 32.11 implements the statutory requirement that the Government make contract payments via Electronic Funds Transfer (EFT). It establishes EFT as the default payment mechanism for both financing and delivery payments, while providing specific exceptions for security, emergency operations, and international logistics.
Key Rules
- Mandatory Use: Per 31 U.S.C. 3332, EFT must be used for all contract payments unless a specific regulatory exception applies.
- Governmentwide Commercial Purchase Card: This card is legally considered an EFT method. It can be used for payments provided the contractor agrees and the transaction is within card limits.
- Treasury Offset Program (TOP) Check: For contracts above the micro-purchase threshold, Contracting Officers (COs) must verify in the System for Award Management (SAM) that a contractor has no delinquent debt before authorizing payment by purchase card.
- EFT vs. Assignment of Claims: EFT information does not replace a formal "Assignment of Claims." If EFT data points to a recipient other than the contractor without a legal assignment, the government treats it as incorrect info and may suspend payment.
- Standard Mechanisms: Domestic payments are restricted to the U.S. Automated Clearing House (ACH) and Fedwire Transfer System unless the agency head and payment office authorize an alternative.
- Privacy Protections: The Government is strictly required to protect contractor EFT information from improper disclosure.
Responsibilities
- Contracting Officers:
- Selecting and inserting the correct EFT clauses (e.g., 52.232-33 for SAM-registered contractors or 52.232-34 for others).
- Verifying SAM "debt flags" before authorizing purchase card payments.
- Forwarding EFT information provided by offerors to the appropriate payment office.
- Ensuring EFT info in sealed bids is not disclosed to the public.
- Payment/Disbursing Offices:
- Executing the transfer of funds and providing "payment advice" (the details of what the payment covers) to the contractor.
- Reverting to non-EFT payment methods if the office loses EFT capability.
- Agency Heads:
- Authorizing the use of non-domestic EFT mechanisms or non-standard domestic mechanisms.
- Contractors:
- Maintaining accurate EFT and SAM registration data.
- Ensuring the accuracy of bank routing and account information to avoid payment suspensions.
Practical Implications
- SAM Registration is Critical: For the vast majority of federal contractors, maintaining an active SAM registration is a prerequisite not just for bidding, but for the actual mechanics of getting paid.
- Debt Impacts Payment Speed: If a contractor has a "debt flag" in SAM due to delinquent federal debt, they lose the ability to be paid via Government Purchase Card (GPC). This can result in slower payment cycles as the agency must shift to standard EFT processing.
- Operational Flexibility: The exceptions for "unusual and compelling urgency" or "military/contingency operations" allow the government to bypass EFT requirements in disaster zones or combat environments where banking infrastructure may be non-existent.
- Payment Delays: Contractors should be aware that "incorrect EFT information" is a valid legal basis for the Government to suspend payments without being in violation of the Prompt Payment Act. Keeping banking details current is a high-priority administrative task.