[Federal Register Volume 63, Number 128 (Monday, July 6, 1998)]
[Proposed Rules]
[Pages 36522-36528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17148]
[[Page 36521]]
_______________________________________________________________________
Part III
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Parts 13, 16, 32 and 52
Federal Acquisition Regulation; Electronic Funds Transfer; Proposed
Rule
Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed
Rules
[[Page 36522]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 13, 16, 32 and 52
[FAR Case 91-118]
RIN 9000-AG49
Federal Acquisition Regulation; Electronic Funds Transfer
AGENCIES: Department of Defense (DOD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council are proposing to amend the Federal
Acquisition Regulation (FAR) to address the use of electronic funds
transfers (EFT) for Federal contract payments and to facilitate
implementation of Public Law 104-134 which mandates payment by EFT in
certain situations. This regulatory action was not subject to Office of
Management and Budget review under Executive Order 12866, dated
September 30, 1993. This is not a major rule under 5 U.S.C. 804.
DATES: Comments should be submitted on or before September 4, 1998 to
be considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVRS), 1800 F Street,
NW, Room 4035, Washington, DC 20405.
E-mail comments submitted over the Internet should be addressed to:
farcase.91-118@gsa.gov.
Please cite FAR case 91-118 in all correspondence related to this
case.
FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, 1800 F Street,
NW, Room 4035, Washington, DC 20405, (202) 501-4755 for information
pertaining to status or publication schedules. For clarification of
content, contact Mr. Jeremy Olson, Procurement Analyst, at (202) 501-
3221. Please cite FAR case 91-118.
SUPPLEMENTARY INFORMATION:
A. Background
An interim rule was published in the Federal Register on August 29,
1996 (61 FR 45770) to implement subsection (x)(1) of the Debt
Collection Improvement Act of 1996. The Debt Collection Improvement Act
is chapter 10 of the Omnibus Consolidated Rescissions and
Appropriations Act of 1996 (Public Law 104-134). Subsection (x)(1)
amends 31 U.S.C. 3332 to require, beginning July 26, 1996, that all
Federal payments to a recipient who becomes eligible for that type of
payment shall be made by electronic funds transfer. The statute
provides an exemption for payments to certain recipients, and
stipulates that the Department of the Treasury is responsible for
issuing regulations necessary for carrying out the statute. On July 26,
1996, the Department of the Treasury's Financial Management Service
issued an interim rule (61 FR 39254) which added Part 208 to Title 31,
Code of Federal Regulations, to provide regulations for payments
through EFT.
This proposed FAR rule differs significantly from the interim FAR
rule. One of the main differences is the location where the Government
will receive the contractor's EFT information. The interim rule clauses
at 52.232-33, Mandatory Information for Electronic Funds Transfer
Payment, and 52.232-34, Optional Information for Electronic Funds
Transfer Payment, require the contractor to submit that information
directly to the payment office. The proposed rule revises these two
contract clauses with new language at 52.232-33, Payment by Electronic
Funds Transfer (CCR), and 52.232-34, Payment by Electronic Funds
Transfer (Non-CCR). The new clause at 52.232-33 is prescribed when the
payment office uses the Central Contract Registration (CCR) database as
its source of EFT information. The new clause at 52.232-34 is used when
the contractor submits EFT information to a source other than the CCR
database.
The proposed rule also recognizes that agencies may use differing
administrative approaches in the collection, tracking, and maintenance
of contractor EFT banking information. The two most distinctly
different approaches are those that involve obtaining contractor
banking information prior to award (as a condition of award) as opposed
to obtaining that information after award (as a normal contract
performance duty).
The proposed rule also differs from the interim rule by more
rigidly requiring payment by EFT except for two categories of
exceptions described at FAR 32.1103-1: ``non-banked contractors'' and
``non-EFT system''. In contrast, the interim rule provides the clause
at 52.232-34 for optional submission of EFT information by the
contractor for payments occurring on or before January 1, 1999. The
determination whether a particular payment must be made by EFT is made
by the payment official. In addition, the proposed rule contains three
new clauses at 52.232-X1, Designation of Office for Government Receipt
of EFT Information, 52.232-X2, Payment by Third Party, and 52.232-X3,
Multiple Payment Arrangements. The clause at 52.232-X1 is prescribed
when the Government has designated an office other than the payment
office to receive the contractor's EFT information. The clause at
52.232-X2 is prescribed when payment on a written contract is made by a
third party on behalf of the Government (e.g., Governmentwide
commercial purchase card). The clause at 52.232-X3 is prescribed when
the contract or agreement provides for the use of delivery orders and
provides for multiple types of payment arrangements. The solicitation
provision at 52.232-X4, Submission of EFT Information with Offer, is
prescribed when the Government has determined that EFT banking
information is to be submitted prior to award, along with the offer.
Public comments were received from sixteen sources. All comments
were considered in the development of this proposed rule.
B. Regulatory Flexibility Act
The rule may have a significant economic impact on a substantial
number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. because the majority of small
entities will have payment made by EFT under their contracts. An
Initial Regulatory Flexibility Analysis (IRFA) was performed in
conjunction with the interim rule published at 61 FR 45770, August 29,
1996, and a revised Initial Regulatory Flexibility Analysis has been
performed in conjunction with this proposed rule. The analysis is
summarized as follows:
The rule will apply, prior to January 2, 1999, to all small
businesses who enter into contracts with the Federal Government
except for two categories: ``Non-banked'' contractors'' and ``Non-
EFT system''. ``Non-banked contractors'' are those contractors who
do not have an account at a domestic United States financial
institution and do not have an authorized payment agent. These
contractors are waived from the requirement to be paid by EFT, upon
submission of a certificate. Contractors are also exempt from
receiving payment by EFT if agencies are unable to make payment
because of system limitations. This ``non-EFT system'' category
consists of contracts (1) in which the cognizant payment offices are
not capable of making payment through EFT; (2) that are paid in
other than U.S. dollars; (3) that are classified; (4) that are
awarded by a deployed
[[Page 36523]]
contracting officer in the course of military operations; and (5)
where payments are received by, or on behalf of, the contractor
outside the United States or Puerto Rico. On and after January 2,
1999, however, payments under all contracts, subject to implementing
regulations of the Secretary of the Treasury, are required to be
made by EFT. To date no supporting data has been collected,
therefore there is no estimate available of the number of small
businesses that will be subject to the rule.
A copy of the IRFA has been submitted to the Chief Counsel for
Advocacy of the Small Business Administration. A copy of the IRFA may
be obtained from the FAR Secretariat. Comments from small entities
concerning the affected FAR subparts shall also be considered in
accordance with Section 610 of the Act. Such comments must be submitted
separately and cite FAR case 91-118 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act (Public Law 96-511) applies because the
proposed rule contains information collection requirements. The Office
of Management and Budget has approved an information collection
concerning Electronic Funds Transfer (9000-0144) through August 31,
1999, based on the requirements in the interim rule for contractors to
provide EFT information for each contract award. The proposed rule
decreases the collection requirements since the rule permits
contractors to provide EFT information to the CCR database on an annual
basis, rather than per contract award.
Annual Reporting Burden: Public reporting burden for this
collection of information is estimated to average .5 hours per
response, including the time for reviewing instruction, searching
existing data sources, gathering and maintaining the data needed, and
completing and reviewing the collection of information.
The annual reporting burden is estimated as follows: Respondents:
14,000; Responses per respondent: 10; Total annual responses: 140,000;
Preparation hours per response: .5; and Total response burden hours:
70,000.
D. Request for Comments Regarding Paperwork Burden
Members of the public are invited to comment on the recordkeeping
and information collection requirements and estimates set forth above.
Please send comments to: Office of Information and Regulatory Affairs,
Office of Management and Budget, Attention: Mr. Peter N. Weiss, FAR
Desk Officer, New Executive Office Building, Room 10102, 725 17th
Street, NW, Washington, DC 20503.
Also send a copy of any comments to the FAR Secretariat at the
address shown under ADDRESSES. Please cite FAR case 91-118, Electronic
Funds Transfer, in all correspondence related to this estimate.
List of Subjects in 48 CFR Parts 13, 16, 32 and 52
Government procurement.
Dated: June 23, 1998.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, it is proposed that 48 CFR Parts 13, 16, 32 and 52 be
amended as set forth below:
1. The authority citation for 48 CFR Parts 13, 16, 32 and 52
continues to read as follows:
Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42
U.S.C. 2473(c).
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
2. Section 13.301 is amended in paragraph (c)(3) by adding a
sentence at the end to read as follows:
13.301 Governmentwide commercial purchase card.
* * * * *
(c) * * *
(3) * * * See 32.1105(d) for instructions for use of the
appropriate clause when payment under a written contract will be made
through use of the card.
3. Section 13.302-1 is amended by revising paragraph (e) to read as
follows:
13.302-1 General.
* * * * *
(e) In accordance with 31 U.S.C. 3332, electronic funds transfer
(EFT) is required for payments except as provided in 32.1103-1. See
Subpart 32.11 for instructions for use of the appropriate clause in
purchase orders. When obtaining verbal quotes, the contracting officer
shall inform the quoter of the EFT clause that will be in any resulting
purchase order.
PART 16--TYPES OF CONTRACTS
4. Section 16.505 is amended in paragraph (a) by redesignating
paragraph (a)(6)(viii) as (a)(6)(ix) and by adding a new (a)(6)(viii)
to read as follows:
16.505 Ordering.
(a) * * *
(6) * * *
(viii) Method of payment and payment office, if not specified in
the contract (see 32.1105(e)).
* * * * *
PART 32--CONTRACT FINANCING
5. Subpart 32.11 is revised to read as follows:
Subpart 32.11--Electronic Funds Transfer
Sec.
32.1100 Scope of subpart.
32.1101 Statutory requirements.
32.1102 Definitions.
32.1103 Policy.
32.1103-1 Applicability.
32.1103-2 Protection of EFT information.
32.1103-3 Assignment of claims.
32.1103-4 EFT mechanisms.
32.1103-5 Government inability to make EFT payment.
32.1103-6 Payment information.
32.1103-7 EFT for contracts awarded from solicitations issued prior
to July 26, 1996.
32.1104 Payment by Governmentwide commercial purchase card.
32.1105 Solicitation provision and contract clauses.
Subpart 32.11--Electronic Fund Transfer
32.1100 Scope of subpart.
This subpart provides policy and procedures for providing financing
and delivery payments to contractors by electronic funds transfer
(EFT).
32.1101 Statutory requirements.
For contracts resulting from solicitations issued on or after July
26, 1996, 31 U.S.C. 3332, as implemented by Department of the Treasury
regulations, requires payment be made by EFT in most situations (see
32.1103-1). For all contracts, regardless of solicitation date, 31
U.S.C. 3332 requires, subject to implementing regulations of the
Secretary of the Treasury, that all payments made after January 1,
1999, be made by EFT.
32.1102 Definitions.
EFT information means information necessary for making a payment by
electronic funds transfer through specified EFT mechanisms.
Electronic Funds Transfer (EFT) means any transfer of funds, other
than a transaction originated by cash, check, or similar paper
instrument, that is initiated through an electronic terminal,
telephone, computer, or magnetic tape, for the purpose of ordering,
instructing, or authorizing a financial institution to debit or credit
an account. The term includes Automated Clearing House transfers,
Federal Reserve Wire
[[Page 36524]]
transfers, transfers made at automatic teller machines, and point-of-
sale terminals (e.g., Governmentwide commercial purchase cards).
Governmentwide commercial purchase card, as used in this part,
means a card that is similar in nature to a commercial credit card that
is used to make financing and delivery payments for supplies and
services. The purchase card is an EFT method and it may be used as a
means to meet the requirement to pay by EFT, to the extent that
purchase card limits do not preclude such payments.
Payment information means the payment advice provided by the
Government to the contractor that identifies what the payment is for,
any computations or adjustments made by the Government, and any
information required by the Prompt Payment Act.
32.1103 Policy.
Except as authorized by this subpart or otherwise authorized in
accordance with Treasury regulations at 31 CFR 208, all types of
contract payments shall be made by an EFT method.
32.1103-1 Applicability.
Pursuant to 31 U.S.C. 3332, payment through EFT is the required
method of contract payment. However, certain classes of contracts have
been authorized limited exceptions from the requirement to pay by EFT.
(a) Non-Banked Contractors. Through January 1, 1999, contractors
that do not have an account at a domestic United States financial
institution and do not have an authorized payment agent are waived from
the requirement to be paid by EFT, upon submission of a certification
(see paragraph (b) of the EFT clauses at 52.232-33 and 52.232-34).
(b) Non-EFT System. (1) If the Government office making payment
under the contract is not capable of making payment through EFT,
payment by other than EFT is authorized, subject to the requirements of
31 CFR 208.3(c) (see 32.1103-5).
(2) Except as provided in 32.1103-4(b), if the payment is to be
received by or on behalf of the contractor, outside the United States
and Puerto Rico, payment shall be made by other than EFT.
(3) Except as provided in 32.1103-4(b), if a contract is paid in
other than United States currency, payment shall be made by other than
EFT.
(4) If a contract is a classified contract (see 4.401), the
contract shall provide for payment by other than EFT where payment by
EFT could compromise the safeguarding of classified information or
national security, or where arrangements for appropriate EFT payments
would be impractical due to security considerations.
(5) If a contract is awarded by a deployed contracting officer in
the course of military operations, including, but not limited to,
contingency operations as defined in 10 U.S.C. 101(a)(13), or if a
contract is awarded by any contracting officer in the conduct of
emergency operations, such as responses to natural disasters or
national or civil emergencies, the contract shall provide for payment
by other than EFT where--
(i) EFT is not known to be possible; or
(ii) EFT payment would not support the objectives of the operation.
32.1103-2 Protection of EFT information.
The Government shall protect against improper disclosure of
contractors' EFT information.
32.1103-3 Assignment of claims.
The use of EFT payment methods is not a substitute for a properly
executed assignment of claims in accordance with Subpart 32.8. EFT
information that shows the ultimate recipient of the transfer to be
other than the contractor, in the absence of a proper assignment of
claims, is considered to be incorrect EFT information within the
meaning of the ``Suspension of Payment'' paragraphs of the EFT clauses
at 52.232-33 and 52.232-34.
32.1103-4 EFT mechanisms.
(a) Domestic EFT. The EFT clauses at 52.232-33 and 52.232-34 are
designed for use with the domestic United States banking system, using
United States currency, and only the specified mechanisms of EFT (U.S.
Automated Clearing House, and Federal Reserve Wire Transfer System).
The head of the agency shall not authorize the use of any other EFT
mechanism for domestic EFT without the prior concurrence of the office
or agency responsible for making payments.
(b) Non-Domestic EFT Mechanisms and Non-United States Currency. For
payments received by or on behalf of the contractor outside the United
States and Puerto Rico or for contracts paid in non-United States
currency, payment shall be made by other than EFT. However, if the head
of an agency determines that a particular non-domestic EFT mechanism is
appropriate and safe for use outside the domestic United States, or for
payments of non-United States currency, the head of the agency may
authorize appropriate use of EFT. Any such determination shall not be
made effective without the prior concurrence of the office or agency
responsible for making payments.
32.1103-5 Government inability to make EFT payment.
(a) If the Government payment office is not capable of making
payment by EFT, the Government is relieved of the requirement to pay by
EFT if the agency complies with 31 CFR 208.3(c), which requires written
notice and submittal of an implementation plan to the Department of the
Treasury, Financial Management Service.
(b) If the payment office does not have or loses the ability to
release payment by EFT under a contract that requires payment by EFT,
to the extent authorized by 31 CFR 208, the payment office shall make
necessary payments pursuant to paragraph (a)(2) of the clause at either
52.232-33 or 52.232-34 until such time as it can make EFT payments.
32.1103-6 Payment information.
The payment or disbursing office shall forward to the contractor
available payment information that is suitable for transmission as of
the date of release of the electronic funds transfer instruction to the
Federal Reserve System.
32.1103-7 EFT for contracts awarded from solicitations issued prior to
July 26, 1996.
(a) Prior to January 2, 1999, payment by EFT is not required on
contracts resulting from solicitations issued prior to July 26, 1996.
However, while not statutorily required, it is nevertheless Federal
policy to maximize the use of EFT. For contracts to be paid by payment
offices capable of making EFT payments, the contracting officer is
encouraged to use EFT, whenever reasonable, in any contract resulting
from a pre-July 26, 1996, solicitation for which the contractor is
willing to accept payment by EFT. The contractor's willingness to
accept payment by EFT constitutes sufficient consideration for
modification of existing contracts to incorporate EFT.
(b) Regardless of the solicitation date of the contract, all
payments to be made after January 1, 1999, shall be made by EFT, to the
extent required by the implementing regulations of the Secretary of the
Treasury, whether or not an EFT clause is included in the contract.
32.1104 Payment by Governmentwide commercial purchase card.
A Governmentwide commercial purchase card charge authorizes the
Third Party (e.g., financial institution) that issued the purchase card
to make immediate payment to the contractor.
[[Page 36525]]
That payment is reimbursed at a later date by a subsequent payment by
the Government to the Third Party.
(a) The clause at 52.232-X2, Payment by Third Party, governs when a
contractor submits a charge against the purchase card for contract
payment. The clause provides that the contractor shall make such
payment requests by a charge to a Government account with the Third
Party at the time the payment clause(s) of the contract authorizes the
contractor to submit a request for payment and for the amount due in
accordance with the terms of the contract. To the extent that such a
payment would otherwise be approved, the charge against the purchase
card should not be disputed when the charge is reported to the
Government by the Third Party. To the extent that such payment would
otherwise not have been approved, an authorized individual (see 1.603-
3(b)) shall take action to remove the charge, such as by disputing the
charge with the Third Party or by requesting that the contractor credit
the charge back to the Government under the contract.
(b) Written contracts to be paid by purchase card should include
the clause 52.232-X2, Payment by Third Party, as prescribed by
32.1105(d). However, payment by a purchase card may also be made under
a contract that does not contain the clause to the extent the
contractor agrees to accept that method of payment.
(c) The clause at 52.232-X2, Payment by Third Party, requires that
the Third Party and the particular purchase card to be used be
identified elsewhere in the contract. The purchase card account number
should not be included in the contract, but should be separately
provided.
32.1105 Solicitation provision and contract clauses.
(a) Unless payment will be made exclusively through use of the
Governmentwide commercial purchase card or other third party payment
arrangement (see 13.301 and paragraph (d) of this section) or an
exception listed in 32.1103-1(b)(2) through (5) applies--
(1) The contracting officer shall insert the clause at 52.232-33,
Payment by Electronic Funds Transfer (CCR), in all solicitations and
contracts if the payment office uses the CCR database as its source of
EFT information. The contracting officer also shall insert this clause
if the payment office does not currently have the ability to make
payment by EFT, but will use the CCR database as its source of EFT
information when it begins making payments by EFT.
(2)(i) The contracting officer shall insert the clause at 52.232-
34, Payment by Electronic Funds Transfer (Non-CCR), in all other
solicitations and contracts. The contracting officer also shall insert
this clause if the payment office does not currently have the ability
to make payment by EFT, but will use a source other than the CCR
database for EFT information when it begins making payments by EFT.
(ii)(A) If permitted by agency procedures, the contracting officer
may insert in paragraph (c)(1) of the clause, a particular time after
award, such as a fixed number of days. However, in no event shall the
time period be later than 15 days prior to submission of the first
request for payment.
(B) If no agency procedures are prescribed, the time period
inserted in paragraph (c)(1) of the clause shall be ``no later than 15
days prior to submission of the first request for payment.''
(b) If the head of the agency has made a determination in
accordance with 32.1103-4(b) to use a nondomestic EFT mechanism, the
contracting officer shall insert in solicitations and contracts a
clause substantially the same as 52.232-33 or 52.232-34 that clearly
addresses the non-domestic EFT mechanism.
(c) If EFT information is to be submitted to other than the payment
office in accordance with agency procedures, the contracting officer
shall insert in solicitations and contracts the clause at 52.232-X1,
Designation of Office for Government Receipt of EFT Information, or a
clause substantially the same as 52.232-X1 that clearly informs the
contractor of where to send the EFT information.
(d) If payment under a written contract will be made by a charge to
a Government account with a third party such as a Governmentwide
commercial purchase card, then the contracting officer shall insert the
clause at 52.232-X2, Payment by Third Party, in solicitations and
contracts. Payment by a purchase card may also be made under a contract
that does not contain the clause at 52.232-X2, to the extent the
contractor agrees to accept that method of payment.
(e) If the contract or agreement provides for the use of delivery
orders, and provides for a choice of payment methods for individual
orders, the contracting officer shall insert, in the solicitation and
contract or agreement, the clause at 52.232-X3, Multiple Payment
Arrangements, and, to the extent they are applicable, the clauses at--
(1) 52.232-33, Payment by Electronic Funds Transfer (CCR);
(2) 52.232-34, Payment by Electronic Funds Transfer (Non-CCR); and
(3) 52.232-X2, Payment by Third Party.
(f) If more than one disbursing office will make payment under a
contract, the contracting officer shall include the EFT clause
appropriate for each office and shall identify the applicability by
disbursing office and contract line item.
(g) If the solicitation contains the clause at 52.232-34, Payment
by Electronic Funds Transfer (Non-CCR), and an offeror is required to
submit EFT information prior to award, the contracting officer shall
insert in the solicitation the provision at 52.232-X4, Submission of
Electronic Funds Transfer Information with Offer, or a provision
substantially the same.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
6. Section 52.212-4 is amended by revising the clause date and the
third sentence in paragraph (i) to read as follows:
52.212-4 Contract Terms and Conditions--Commercial Items.
* * * * *
Contract Terms and Conditions--Commercial Items (Date)
* * * * *
(i) Payment. * * * If the Government makes payment by Electronic
Funds Transfer (EFT), see 52.212-5 for the appropriate EFT clause. * *
*
* * * * *
7. Section 52.212-5 is amended by revising the clause date; and in
paragraph (b) by redesignating (b)(16) and (17) as (19) and (20),
respectively, and by adding new paragraphs (16), (17), and (18) to read
as follows:
52.212-5 Contract Terms and Conditions Required To Implement Statutes
or Executive Orders--Commercial Items.
* * * * *
Contract Terms and Conditions Required To Implement Statutes or
Executive Orders--Commercial Items (Date)
* * * * *
(b) * * *
______ (16) 52.232-33, Payment by Electronic Funds Transfer
(CCR) (31 U.S.C. 3332).
______ (17) 52.232-34, Payment by Electronic Funds Transfer
(Non-CCR) (31 U.S.C. 3332).
______ (18) 52.232-X2, Payment by Third Party (31 U.S.C. 3332).
* * * * *
8. Section 52.213-4 is amended by revising the clause date; by
removingparagraph (a)(2)(vi) and redesignating paragraphs (a)(2)(vii)
through (a)(2)(ix) as (a)(2)(vi) through
[[Page 36526]]
(a)(2)(viii); and by adding paragraphs (b)(1)(ix) and (b)(1)(x) to read
as follows:
52.213-4 Terms and Conditions--Simplified Acquisitions (Other Than
Commercial Items).
Terms and Conditions--Simplified Acquisition (Other Than Commercial
Items) (Date)
* * * * *
(b) * * *
(1) * * *
* * * * *
(ix) 52.232-33, Payment by Electronic Funds Transfer (CCR)
(Date). (Applies when payment will be made by EFT and the payment
office uses the Central Contractor Registration database as its
source of EFT information.)
(x) 52.232-34, Payment by Electronic Funds Transfer (Non-CCR)
(Date). (Applies when payment will be made by EFT and the payment
office does not use the Central Contractor Registration database as
its source of EFT information.)
* * * * *
9. Sections 52.232-33 and 52.232-34 are revised and new sections
52.232-X1 through 52.232-X4 are added to read as follows:
52.232-33 Payment by Electronic Funds Transfer (CCR).
As prescribed in 32.1105(a)(1), insert the following clause:
Payment by Electronic Funds Transfer (CCR) (Date)
(a) Method of payment. (1) All payments by the Government under
this contract shall be made by electronic funds transfer (EFT),
except as provided in paragraph (a)(2) or (b) of this clause. As
used in this clause, the term EFT refers to the funds transfer and
may also include the payment information transfer.
(2) In the event the Government is unable to release one or more
payments by EFT, the Contractor agrees to either--
(i) Accept payment by check or some other mutually agreeable
method of payment; or
(ii) Request the Government to extend the payment due date until
such time as the Government can make payment by EFT (but see
paragraph (e) of this clause).
(b) Alternative contractor certification. If the Contractor
certifies in writing, as part of its registration with the Central
Contractor Registration (CCR) database (FAR 4.503), that it does not
have an account with a financial institution and does not have an
authorized payment agent, payment shall be made by check to the
remittance address contained in the CCR database. All contractor
certifications will expire on January 1, 1999.
(c) Contractor's EFT information. Except as provided in
paragraph (b) of this clause, the Government shall make payment to
the Contractor using the EFT information contained in the CCR
database. In the event that the EFT information changes, the
Contractor shall be responsible for providing the updated
information to the CCR database.
(d) Mechanisms for EFT payment. The Government may make payment
by EFT through either an Automated Clearing House (ACH) subject to
the banking laws of the United States or the Federal Reserve Wire
Transfer System.
(e) Suspension of Payment. If the Contractor's EFT information
in the CCR database is incorrect and the Contractor has not
certified under paragraph (b) of this clause, then the Government
need not make payment to the Contractor under this contract until
correct EFT information or certification is entered into the CCR
database; and any invoice or contract financing request shall be
deemed not to be a proper invoice for the purpose of prompt payment
under this contract. The prompt payment terms of the contract
regarding notice of an improper invoice and delays in accrual of
interest penalties apply.
(f) Contractor EFT arrangements. If the Contractor has
identified multiple payment receiving points (i.e., more than one
remittance address and/or EFT information set) in the CCR database,
and the Contractor has not notified the Government of the payment
receiving point applicable to this contract, the Government shall
make payment to the first payment receiving point (EFT information
set or remittance address as applicable) listed in the CCR database.
(g) Liability for uncompleted or erroneous transfers. (1) If an
uncompleted or erroneous transfer occurs because the Government
failed to use the Contractor's EFT information in the correct
manner, the Government remains responsible for--
(i) Making a correct payment;
(ii) Paying any prompt payment penalty due; and
(iii) Recovering any erroneously directed funds.
(2) If an uncompleted or erroneous transfer occurs because the
Contractor's EFT information was incorrect, or was revised within 30
days of Government release of the EFT payment transaction
instruction to the Federal Reserve System, and--
(i) If the funds are no longer under the control of the payment
office, the Government is deemed to have made payment and the
Contractor is responsible for recovery of any erroneously directed
funds; or
(ii) If the funds remain under the control of the payment
office, the Government shall not make payment, and the provisions of
paragraph (e) shall apply.
(h) EFT and prompt payment. A payment shall be deemed to have
been made in a timely manner in accordance with the prompt payment
terms of this contract if, in the EFT payment transaction
instruction released to the Federal Reserve System, the date
specified for settlement of the payment is on or before the prompt
payment due date, provided the specified payment date is a valid
date under the rules of the Federal Reserve System.
(i) EFT and assignment of claims. If the Contractor assigns the
proceeds of this contract as provided for in the assignment of
claims terms of this contract, the Contractor shall require as a
condition of any such assignment, that the assignee shall register
in the CCR database and shall be paid by EFT in accordance with the
terms of this clause. In all respects, the requirements of this
clause shall apply to the assignee as if it were the Contractor. EFT
information that shows the ultimate recipient of the transfer to be
other than the Contractor, in the absence of a proper assignment of
claims acceptable to the Government, is incorrect EFT information
within the meaning of paragraph (e) of this clause.
(j) Liability for change of EFT information by financial agent.
The Government is not liable for errors resulting from changes to
EFT information made by the Contractor's financial agent.
(k) Payment information. The payment or disbursing office shall
forward to the Contractor available payment information that is
suitable for transmission as of the date of release of the
electronic funds transfer instruction to the Federal Reserve System.
The Government may request the Contractor to designate a desired
format and method(s) for delivery of payment information from a list
of formats and methods the payment office is capable of executing.
However, the Government does not guarantee that any particular
format or method of delivery is available at any particular payment
office and retains the latitude to use the format and delivery
method most convenient to the Government. If the Contractor has
certified in accordance with paragraph (b) of this clause or if the
Government otherwise makes payment by check in accordance with
paragraph (a) of this clause, the Government shall mail the payment
information to the remittance address contained in the CCR database.
(End of clause)
52.232-34 Payment by Electronic Funds Transfer (Non-CCR).
As prescribed in 32.1105(a)(2), insert the following clause:
Payment by Electronic Funds Transfer (Non-CCR) (Date)
(a) Method of Payment. (1) All payments by the Government under
this contract shall be made by electronic funds transfer (EFT),
except as provided in paragraph (a)(2) or (b) of this clause. As
used in this clause, the term EFT refers to the funds transfer and
may also include the payment information transfer.
(2) In the event the Government is unable to release one or more
payments by EFT, the Contractor agrees to either--
(i) Accept payment by check or some other mutually agreeable
method of payment; or
(ii) Request the Government to extend the payment due dates
until such time as the Government makes payment by EFT (but see
paragraph (e) of this clause).
(b) Alternative Contractor Certification. If the Contractor
certifies in writing to the designated office (see paragraph (c)(1)
of this clause) that is does not have an account with a financial
institution and does not have an authorized payment agent, payment
shall be made by check to the remittance address specified in this
contract and the Contractor need not provide EFT information. All
contractor certifications will expire on January 1, 1999. For any
payments to be made after January 1, 1999, the Contractor
[[Page 36527]]
shall provide EFT information as described in paragraph (k) of this
clause and payment shall be made by EFT.
(c) Mandatory submission of Contractor's EFT information. (1)
Except as provided in paragraph (b) of this clause, the Contractor
is required, as a condition to any invoice or contract financing
payment under this contract, to provide the Government with the
information required to make payment by EFT (see paragraph (k) of
this clause). The Contractor shall provide this information directly
to the office designated in this contract to receive that
information (hereafter: ``designated office'') by [Insert date, days
after award, or days before first request as prescribed by Agency
head; if not prescribed, insert ``no later than 15 days prior to
submission of the first request for payment'']. If not otherwise
specified in this contract, the payment office is the designated
office for receipt of the Contractor's EFT information. If more than
one designated office is named for the contract, the Contractor
shall provide a separate notice to each office. In the event that
the EFT information changes, the Contractor shall be responsible for
providing the updated information to the designated office(s).
(2) If the Contractor provides EFT information applicable to
multiple contracts, the Contractor shall specifically state the
applicability of this EFT information in terms acceptable to the
designated office. However, EFT information supplied to a designated
office shall be applicable only to contracts which identify that
designated office as the office to receive EFT information for that
contract.
(d) Mechanisms for EFT Payment. The Government may make payment
by EFT through either an Automated Clearing House (ACH) subject to
the banking laws of the United States or the Federal Reserve Wire
Transfer System.
(e) Suspension of Payment. (1) The Government is not required to
make any payment under this contract until after receipt, by the
designated office, of the correct EFT payment information from the
Contractor or a certificate submitted in accordance with paragraph
(b) of this clause. Until receipt of the correct EFT information or
certificate, any invoice or contract financing request shall be
deemed not to be a proper invoice for the purpose of prompt payment
under this contract. The prompt payment terms of the contract
regarding notice of an improper invoice and delays in accrual of
interest penalties apply.
(2) If the EFT information changes after submission of correct
EFT information, the Government shall begin using the changed EFT
information no later than 30 days after its receipt to the extent
payment is made by EFT. However, the Contractor may request that no
further payments be made until the updated EFT information is
implemented by the payment office. If such suspension would result
in a late payment under the prompt payment terms of this contract,
the Contractor's request for suspension shall extend the due date
for payment by the number of days of the suspension.
(f) Liability for uncompleted or erroneous transfers. (1) If an
uncompleted or erroneous transfer occurs because the Government
failed to use the Contractor's EFT information in the correct
manner, the Government remains responsible for--
(i) Making a correct payment;
(ii) Paying any prompt payment penalty due; and
(iii) Recovering any erroneously directed funds.
(2) If an uncompleted or erroneous transfer occurs because the
Contractor's EFT information was incorrect, or was revised within 30
days of Government release of the EFT payment transaction
instruction to the Federal Reserve System, and--
(i) If the funds are no longer under the control of the payment
office, the Government is deemed to have made payment and the
Contractor is responsible for recovery of any erroneously directed
funds; or
(ii) If the funds remain under the control of the payment
office, the Government shall not make payment and the provisions of
paragraph (e) shall apply.
(g) EFT and prompt payment. A payment shall be deemed to have
been made in a timely manner in accordance with the prompt payment
terms of this contract if, in the EFT payment transaction
instruction released to the Federal Reserve System, the date
specified for settlement of the payment is on or before the prompt
payment due date, provided the specified payment date is a valid
date under the rules of the Federal Reserve System.
(h) EFT and assignment of claims. If the Contractor assigns the
proceeds of this contract as provided for in the assignment of
claims terms of this contract, the Contractor shall require as a
condition of any such assignment, that the assignee shall provide
the EFT information required by paragraph (k) of this clause to the
designated office, and shall be paid by EFT in accordance with the
terms of this clause. In all respects, the requirements of this
clause shall apply to the assignee as if it were the Contractor. EFT
information that shows the ultimate recipient of the transfer to be
other than the Contractor, in the absence of a proper assignment of
claims acceptable to the Government, is incorrect EFT information
within the meaning of paragraph (e) of this clause.
(i) Liability for change of EFT information by financial agent.
The Government is not liable for errors resulting from changes to
EFT information provided by the Contractor's financial agent.
(j) Payment information. The payment or disbursing office shall
forward to the Contractor available payment information that is
suitable for transmission as of the date of release of the
electronic funds transfer instruction to the Federal Reserve System.
The Government may request the Contractor to designate a desired
format and method(s) for delivery of payment information from a list
of formats and methods the payment office is capable of executing.
However, the Government does not guarantee that any particular
format or method of delivery is available at any particular payment
office and retains the latitude to use the format and delivery
method most convenient to the Government. If the Contractor has
certified in accordance with paragraph (b) of this clause or if the
Government otherwise makes payment by check in accordance with
paragraph (a) of this clause, the Government shall mail the payment
information to the remittance address in the contract.
(k) EFT Information. The Contractor shall provide the following
information to the designated office. The Contractor may supply this
data for this or multiple contracts (see paragraph (c) of this
clause). The Contractor shall designate a single financial agent per
contract capable of receiving and processing the EFT using the EFT
methods described in paragraph (d) of this clause.
(1) The contract number (or other procurement identification
number).
(2) The Contractor's name and remittance address, as stated in
the contract(s).
(3) The signature (manual or electronic, as appropriate), title,
and telephone number of the Contractor official authorized to
provide this information.
(4) The name, address, and 9-digit Routing Transit Number of the
Contractor's financial agent.
(5) The Contractor's account number and the type of account
(checking, saving, or lockbox).
(6) The Federal Reserve Wire Transfer System telegraphic
abbreviation of the Contractor's financial agent.
(7) If the Contractor's financial agent is not directly on-line
to the Federal Reserve Wire Transfer System and, therefore, not the
receiver of the wire transfer payment, the Contractor shall also
provide the name, address, telegraphic abbreviation, and 9-digit
Routing Transit Number of the correspondent financial institution
receiving the wire transfer payment.
(End of clause)
52.232-X1 Designation of Office for Government Receipt of EFT
Information.
As prescribed in 32.1105(c) insert the following clause:
Designation of Office for Government Receipt of EFT Information (Date)
(a) As provided for in paragraph (c) of the clause at 52.232-34,
Payment by Electronic Funds Transfer (Non-CCR), the Government has
designated the following office as the office to receive the
Contractor's EFT information, in lieu of the payment office of this
contract.
(b) The Contractor shall send all EFT information, and any
changes of EFT information to the office designated in paragraph (c)
of this clause. The Contractor shall not send EFT information to the
payment office, or any other office than that designated in
paragraph (c). The Government need not use any EFT information sent
to any office other than that designated in paragraph (c).
(c) Designated Office:
Name:------------------------------------------------------------------
Mailing Address:-------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
Telephone Number:------------------------------------------------------
Person to Contact:-----------------------------------------------------
Electronic Address:----------------------------------------------------
[[Page 36528]]
-----------------------------------------------------------------------
(End of clause)
52.232-X2 Payment by Third Party.
As prescribed in 32.1105(d), insert the following clause:
Payment by Third Party (Date)
(a) General. The Contractor agrees to accept payments due under
this contract, through payment by a Third Party in lieu of payment
directly from the Government, in accordance with the terms of this
clause. The Third Party and the particular Governmentwide commercial
purchase card to be used are identified elsewhere in this contract.
(b) Contractor payment request. In accordance with those clauses
of this contract that authorize the Contractor to submit invoices,
contract financing requests, other payment requests, or as provided
in other clauses providing for payment to the Contractor, the
Contractor shall make such payment requests through a charge to the
Government account with the Third Party, at the time and for the
amount due in accordance with the terms of this contract.
(c) Payment. The Contractor and the Third Party shall agree that
payments due under this contract shall be made upon submittal of
payment requests to the Third Party in accordance with the terms and
conditions of an agreement between the Contractor, the Contractor's
financial agent (if any), and the Third Party and its agents (if
any). No payment shall be due the Contractor until such agreement is
made. Payments made or due by the Third Party under this clause are
not payments made by the Government and are not subject to the
Prompt Payment Act or any implementation thereof in this contract.
(d) Documentation. Documentation of each charge against the
Government's account shall be provided to the Contracting Officer
upon request.
(e) Assignment of Claims. Notwithstanding any other provision of
this contract, if any payment is made under this clause, then no
payment under this contract shall be assigned under the provisions
of the Assignment of Claims terms of this contract or the Assignment
of Claims Act of 1940, as amended, 31 U.S.C. 3727, 41 U.S.C. 15.
(f) Other Payment Terms. The other payment terms of this
contract shall govern the content and submission of payment
requests. If any clause requires information or documents in or with
the payment request, that is not provided for in the Third Party
agreement referenced in paragraph (c) of this clause, the Contractor
shall obtain instructions from the Contracting Officer before
submitting such a payment request.
(End of clause)
53.232-X3 Multiple Payment Arrangements.
As prescribed in 32.1105(e), insert the following clause:
Multiple Payment Arrangements (Date)
This contract or agreement provides for payments to the
Contractor through several alternative methods. The applicability of
specific methods of payment and the designation of the payment
office(s) are either stated--
(a) Elsewhere in this contract or agreement; or
(b) In individual orders placed under this contract or
agreement.
(End of clause)
52.232-X4 Submission of Electronic Funds Transfer Information with
Offer.
As prescribed in 32.1105(g), insert the following provision:
Submission of Electronic Funds Transfer Information With Offer (Date)
The offeror shall provide, with its offer, the following
information that is required to make payment by electronic funds
transfer (EFT) under any contract that results from this
solicitation. This submission satisfies the requirement to provide
EFT information under paragraphs (c)(1) and (k) of the clause at
52.232-34, Payment By Electronic Funds Transfer (Non-CCR).
(1) The solicitation number (or other procurement identification
number).
(2) The offeror's name and remittance address, as stated in the
offer.
(3) The signature (manual or electronic, as appropriate), title,
and telephone number of the offeror's official authorized to provide
this information.
(4) The name, address, and 9-digit Routing Transit Number of the
offeror's financial agent.
(5) The offeror's account number and the type of account
(checking, saving, or lockbox).
(6) The Federal Reserve Wire Transfer System telegraphic
abbreviation of the offeror's financial agent.
(7) If the offeror's financial agent is not directly on-line to
the Federal Reserve Wire Transfer System and, therefore, not the
receiver of the wire transfer payment, the offeror shall also
provide the name, address, telegraphic abbreviation, and 9-digit
Routing Transit Number of the correspondent financial institution
receiving the wire transfer payment.
(End of provision)
[FR Doc. 98-17148 Filed 7-2-98; 8:45 am]
BILLING CODE 6820-EP-P
