[Federal Register Volume 61, Number 169 (Thursday, August 29, 1996)]
[Rules and Regulations]
[Pages 45770-45775]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22034]
[[Page 45769]]
_______________________________________________________________________
Part X
Department of Defense
General Services Administration
National Aeronautics and Space Administration
_______________________________________________________________________
48 CFR Ch. 1, et al.
Federal Acquisition Regulation; Payment by Electronic Funds Transfer
and Small Entity Compliance Guide; Rules
Federal Register / Vol. 61, No. 169 / Thursday, August 29, 1996 /
Rules and Regulations
[[Page 45770]]
DEPARTMENT OF DEFENSE
GENERAL SERVICES ADMINISTRATION
NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
48 CFR Parts 12, 13, 32, and 52
[FAC 90-42, FAR Case 91-118]
RIN 9000-AG49
Federal Acquisition Regulation; Payment by Electronic Funds
Transfer
AGENCIES: Department of Defense (DoD), General Services Administration
(GSA), and National Aeronautics and Space Administration (NASA).
ACTION: Interim rule with request for comment.
-----------------------------------------------------------------------
SUMMARY: The Civilian Agency Acquisition Council and the Defense
Acquisition Regulations Council have agreed on an interim rule 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, and is not a major rule under 5 U.S.C. 804. A
companion document, the Small Entity Compliance Guide, follows this FAC
and may be located on the Internet at http://www.gsa.gov/far.
DATES: Effective Date: August 29, 1996.
Comment Date: Comments should be submitted to the FAR Secretariat
at the address shown below on or before October 28, 1996 to be
considered in the formulation of a final rule.
ADDRESSES: Interested parties should submit written comments to:
General Services Administration, FAR Secretariat (MVR), 18th & F
Streets, NW, Room 4035, Attn: Ms. Beverly Fayson, Washington, DC 20405.
Please cite FAC 90-42, FAR case 91-118 in all correspondence
related to this case.
FOR FURTHER INFORMATION CONTACT: Mr. Jeremy Olson at (202) 501-3221 in
reference to this FAR case. For general information, contact the FAR
Secretariat, Room 4035, GS Building, Washington, DC 20405 (202) 501-
4755. Please cite FAC 90-42, FAR case 91-118.
SUPPLEMENTARY INFORMATION:
A. Background
Public Law 104-134, the Omnibus Consolidated Rescissions and
Appropriations Act of 1996, contained a separate chapter 10 entitled
Debt Collection Improvements. Subsection (x)(1) of Section 31001, the
Debt Collection Improvement Act of 1996, amended Section 3332 of title
31, United States Code, by adding the following new statutory
requirement: ``(e)(1) Notwithstanding subsections (a) through (d) of
this section, sections 5120(a) and (d) of title 38, and any other
provision of law, all Federal payments to a recipient who becomes
eligible for that type of payment after 90 days after the date of the
enactment of the Debt Collection Improvement Act of 1996 shall be made
by electronic funds transfer.''
The statute further defines Federal payments to include vendor
payments and expense reimbursements, as well as providing exemption for
payments to certain recipients. The effective date of this provision is
July 26, 1996.
Public Law 104-134 also contained provisions for payments by EFT
which become applicable after January 1, 1999.
Under this statute, the Department of the Treasury is responsible
for issuing regulations necessary for carrying out the statute. On July
26, 1996, the Financial Management Service issued an interim rule (61
FR 39254) which added Part 208 to Title 31, Code of Federal
Regulations, to provide a regulation for payments through EFT. This
interim rule reflects the provisions of the Treasury interim rule with
respect to vendor payments.
The Councils are committed to advancing the use of EFT as the
standard method of payment under Federal contracts, and believe that
the use of EFT will ultimately reduce the administrative burden
currently associated with contract invoice or financing payments made
by check for both the Government and contractors. The rule, therefore,
provides a contract clause which requires contractor submission of the
information needed for payment by EFT as a condition of payment. With
certain limited exceptions, this is the clause that will normally be
used. However, some Government offices involved in certifying invoices
and disbursing contract payments are not currently capable of using EFT
as the standard method of payment. The rule provides a contract clause
for contractor optional submission of EFT information where that is
appropriate and consistent with the statute. The determination whether
a particular payment must be made by EFT is that of the payment
official.
The rule recognizes that contracts using non-United States currency
and contracts issued outside the United States and Puerto Rico are
currently not capable of being paid by EFT through the domestic banking
system of the United States. In addition, certain classified contracts
and certain contracts related to military operations and emergency
situations will not be appropriate for payment by EFT. In accordance
with the Treasury interim rule, these contracts have been excepted from
the requirement for payment by EFT.
The Treasury Department has stated that a credit card transaction
is an electronic payment. The rule, therefore, directs that contracts
to be paid through use of a Governmentwide commercial purchase card
will not include either EFT clause.
The statute provides that until January 1, 1999, recipients of
payments who certify they do not have an account with a financial
institution or an authorized payment agent shall be paid by other than
EFT. To implement this statutory right, the clause at 52.232-33 (the
mandatory EFT information clause) provides for non-EFT payment upon
receipt of a contractor certification. Note that the certification is
an explicit statutory requirement of 31 U.S.C. 3332(e)(2).
In addition to the provisions taking effect on July 26, 1996 (31
U.S.C. 3332(e)), Public Law 104-134 contained provisions which take
effect after January 1, 1999 (31 U.S.C. 3332(f), et al.).
The most significant is a requirement that all payments after that
date be made by EFT. While the statute provides for waivers of the
applicable subsection by the Secretary of the Treasury after January 1,
1999, detailed regulations regarding these waivers have not been
established. Therefore, both contract clauses provide that, after
January 1, 1999, contractors shall provide EFT information for the
contracts containing the clauses established in this rule.
A significant difference between EFT contract payments and EFT
beneficiary or payroll payments is the additional information which
must be provided by the Government to contractor recipients for
contract payments. In order for a business receiving a contract payment
to maintain its accounting books and records, it must obtain
information such as invoice numbers, discounts taken, interest paid,
and other payment adjustments with the payment. With paper checks, this
information has normally been provided as an ``advice of
[[Page 45771]]
payment'', or other paper notice forwarded with the check. However, if
this information is provided electronically, using appropriate formats,
contractors can use more advanced accounting systems which do not
require manual entry and processing of payment information. The
contract clauses in this interim rule authorize the Government, at its
option, to forward this information electronically, with the EFT
payment, as provided for in the domestic banking system. However, the
Government is aware that many banks and financial institutions do not
yet provide their customers with this information electronically. In
response to the proposed rule published in the Federal Register on
October 3, 1995 (60 FR 51766), a significant issue raised was the
desire to receive this remittance information electronically. The
particular methods used for forwarding this information are specific to
individual agencies and payment offices. Companies desiring payment
information in specific formats should express their preferences to the
agencies concerned, and their banks or financial institutions.
The rule adds a new FAR Subpart 32.11, Electronic Funds Transfer,
which provides policy and procedures for Government payment by EFT. The
rule replaces the contract clause at 52.232-28, Electronic Funds
Transfer Payment Methods, with two new clauses at 52.232-33, Mandatory
Information for Electronic Funds Transfer Payment, and 52.232-34,
Optional Information for Electronic Funds Transfer Payment. Under the
clause at 52.232-33, the contractor is required to provide the EFT
information, prior to the submission of the first request for payment,
as a condition of payment under the contract. The clause at 52.232-34
is used if EFT may become a viable method of payment during the period
of contract performance, and the clause becomes effective if the
Government and contractor agree to commence EFT.
Three sources submitted public comments in response to the proposed
rule published on October 3, 1995. All comments were considered in
developing this interim rule.
B. Regulatory Flexibility Act
An Initial Regulatory Flexibility Analysis has been prepared and
submitted to the Chief Counsel for Advocacy of the Small Business
Administration. A copy of the Analysis may be obtained from the FAR
Secretariat at the General Services Administration, 18th & F Streets,
NW., Room 4035, Washington, DC 20405. The Analysis is summarized as
follows:
This interim rule amends the Federal Acquisition Regulation (FAR)
to address the use of electronic funds transfer (EFT) for payments to
contractors under Government contracts. When fully implemented, it is
expected that the use of EFT for contract payments will reduce the
administrative burden that is currently associated with contract
invoice or financing payments made by check. The objective of the rule
is to facilitate implementation of Section 31001(x)(1) of the Debt
Collection Improvement Act of 1996 (Pub. L. 104-134). Section
31001(x)(1) amends 31 U.S.C. 3332 to require that, effective July 26,
1996, payment to newly eligible vendors must be made by EFT. The rule
will apply to all small businesses who enter into Government contracts
that (1) Will not be paid through use of the Governmentwide commercial
purchase card; (2) are issued by a contracting officer within the
United States or Puerto Rico; (3) are denominated and paid in U.S.
dollars, and (4) do not involve certain classified information or
military or emergency operations. To date, no supporting data has been
collected; therefore, there is no available estimate of the number of
small businesses that will be subject to the rule.
The Councils considered several alternatives which include
permitting a transition period before requiring contractors to receive
payment by EFT, and excluding, or making voluntary, EFT payments for
certain types of contracts. The Councils selected the alternative that,
within the constraints and objectives of the Debt Collection
Improvement Act and the Treasury regulations, allows small entities to
take advantage of the benefits of the EFT method of payment but also
provides flexibility with regard to the needs of small entities. In
accordance with 31 U.S.C. 3332, the rule provides for exemption of EFT
requirements until January 1, 1999, for contractors who certify that
they do not have an account with a financial institution or an
authorized payment agent. As indicated above, the rule also exempts
certain classes of contracts. The mandatory information clause
contained in the rule requires contractors to submit identification and
account number information, prior to the submission of the first
request for payment, as a condition of payment under the contract. This
clause permits a Contractor who does not wish to receive payment by EFT
methods to submit a request to the payment office. The decision to
grant the request, however, is solely that of the Government. The rule
also contains an optional information clause which, if included in a
contract, would permit a contractor to request EFT payment after award
of the contract. However, in accordance with the EFT statute, under the
optional clause, the contractor is required to furnish EFT information
for any payment to be made after January 1, 1999. The Federal Register
notice containing the Treasury interim rule states that, after this
date, the Secretary is authorized to waive the EFT requirement for
individuals or classes of individuals for whom compliance imposes a
hardship, for certain categories of checks, and in other circumstances
deemed necessary.
Comments are invited. Comments from small entities concerning the
affected FAR subparts will also be considered in accordance with 5
U.S.C. 610. Such comments should be submitted separately and should
cite FAR Case 91-118 in correspondence.
C. Paperwork Reduction Act
The Paperwork Reduction Act of 1995 (Pub. L. 104-13) applies
because the interim rule contains information collection requirements.
Accordingly, a request for approval of an information collection
concerning Electronic Funds Transfer (9000-0144) has been submitted to
the Office of Management and Budget (OMB) and approved through August
31, 1999.
D. Determination To Issue an Interim Rule
A determination has been made under the authority of the Secretary
of Defense (DoD), the Administrator of General Services (GSA), and the
Administrator of the National Aeronautics and Space Administration
(NASA) that compelling reasons exist to promulgate this interim rule
without prior opportunity for public comment. This rule is necessary
for effective implementation of Section 31001(x)(1) of the Debt
Collection Improvement Act of 1996 (Pub. L. 104-134), which requires
that beginning 90 days (July 26, 1996) after enactment of the Act
(April 26, 1996), payments to newly eligible vendors must be made by
electronic funds transfer. Comments received in response to the
publication of this interim rule will be considered in formulating the
final rule.
E. Determination of Applicability of Section 31001(x)(1) of Public Law
104-134 to Contracts Not Greater Than the Simplified Acquisition
Threshold and Procurements of Commercial Items
In accordance with 41 U.S.C. 429 and 41 U.S.C. 430, the Federal
Acquisition
[[Page 45772]]
Regulatory Council has determined that it would not be in the best
interest of the Federal Government to exempt contracts in amounts not
greater than the simplified acquisition threshold, or contracts for the
procurement of commercial items, from the applicability of Section
31001(x)(1) of the Debt Collection Improvement Act of 1996 (Pub. L.
104-134). Section 31001(x)(1) amends 31 U.S.C. 3332 to require that,
beginning July 26, 1996, payments to newly eligible vendors must be
made by electronic funds transfer. Electronic funds transfer payment
methods, when fully implemented, are expected to significantly reduce
the administrative burden that is currently associated with contract
payments made by check and, therefore, should apply to all Federal
contracts.
List of Subjects in 48 CFR Parts 12, 13, 32, and 52
Government procurement.
Dated: August 23, 1996.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.
Therefore, 48 CFR parts 12, 13, 32, and 52 are amended as set forth
below:
1. The authority citation for 48 CFR parts 12, 13, 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 12--ACQUISITION OF COMMERCIAL ITEMS
12.302 [Amended]
2. Section 12.302 is amended in paragraph (b)(3) by adding
``(except as provided in subpart 32.11)'' after ``Payment''.
PART 13--SIMPLIFIED ACQUISITION PROCEDURES
3. Section 13.501 is amended by adding paragraph (i) to read as
follows:
13.501 General.
* * * * *
(i) In accordance with 31 U.S.C. 3332, payment under contracts may
be required to be made by electronic funds transfer (EFT). See 32.1103
for instructions for use of the appropriate clause in purchase orders.
When obtaining verbal quotes, the contracting officer shall inform the
offeror of the EFT clause that will be in any resulting purchase order.
Contracting officers shall not accept EFT payment data. All such data
shall be provided by the contractor directly to the payment office.
PART 32--CONTRACT FINANCING
4. Section 32.000 is amended in paragraph (g) by removing the word
``and''; in paragraph (h) by removing the period and inserting ``;
and'' in its place; and adding paragraph (i) to read as follows:
32.000 Scope of part.
* * * * *
(i) Electronic funds transfer payments.
5. Section 32.002 is amended by adding paragraph (a)(7) to read as
follows:
32.002 Applicability of subparts.
(a) * * *
(7) Subpart 32.11, Electronic Funds Transfer.
* * * * *
6. Section 32.902 is amended by revising the definition ``Payment
date'' and adding, in alphabetical order, the definition ``Specified
payment date'' to read as follows:
32.902 Definitions.
* * * * *
Payment date means the date on which a check for payment is dated
or, for an electronic funds transfer, the specified payment date.
* * * * *
Specified payment date, as it applies to electronic funds transfer
(EFT), means the date which the Government has placed in the EFT
payment transaction instruction given to the Federal Reserve System as
the date on which the funds are to be transferred to the contractor's
account by the financial agent. If no date has been specified in the
instruction, the specified payment date is 3 business days after the
payment office releases the EFT payment transaction instruction.
7. Section 32.903 is amended by adding the following three
sentences at the end of the section:
32.903 Policy.
* * * For payments made by electronic funds transfer, the specified
payment date, included in the Government's order to pay the contractor,
is the date of payment for prompt payment purposes, whether or not the
Federal Reserve System actually makes the payment by that date, and
whether or not the contractor's financial agent credits the
contractor's account on that date. However, a specified payment date
must be a valid date under the rules of the Federal Reserve System. For
example, if the Federal Reserve System requires 2 days' notice before a
specified payment date to process a transaction, release of a payment
transaction instruction to the Federal Reserve Bank 1 day before the
specified payment date could not constitute a valid date under the
rules of the Federal Reserve System.
32.908 [Amended]
8. Section 32.908 is amended by removing paragraph (d).
9. Subpart 32.11, consisting of sections 32.1100 through 32.1103,
is added to read as follows:
SUBPART 32.11--ELECTRONIC FUNDS TRANSFER
Sec.
32.1100 Scope of subpart.
32.1101 Policy.
32.1102 Assignment of claims.
32.1103 Contract clauses.
32.1100 Scope of subpart.
This subpart provides policy and procedures for Government payment
by electronic funds transfer (EFT).
32.1101 Policy.
(a) 31 U.S.C. 3332(e) requires payment by EFT in certain
situations. The payment office, not the contracting officer, determines
if payment is to be made by EFT. The payment office may determine not
to require submission of EFT information in accordance with paragraph
(j) of the contract clauses at 52.232-33 and 52.232-34.
(b) The Government will protect against improper disclosure of a
contractor's EFT information. The clauses at 52.232-33 and 52.232-34
require the contractor to submit such information directly to the
payment office.
(c) Contractors that do not have an account at a domestic United
States financial institution or an authorized payment agent are
exempted by 31 U.S.C. 3332 until January 1, 1999, from the requirement
to be paid by EFT. The clause at 52.232-33 provides for the contractor
to submit a certification to that effect directly to the payment office
in lieu of the EFT information otherwise required by the clause.
(d) Payment by EFT is the preferred method of contract payment in
normal contracting situations. However, in accordance with 31 CFR
208.3(c), certain classes of contracts have been authorized specific
limited exceptions as listed in paragraphs (d) (1) through (4) of this
section. In these situations, the method of payment shall be specified
by the payment office, either through agency regulations or by specific
agreement.
(1) Contracts awarded by contracting officers outside the United
States and Puerto Rico shall provide for payment by other than EFT.
However, payment
[[Page 45773]]
by EFT is acceptable for this type of contract if the contractor agrees
and the payment office concurs.
(2) Contracts denominated or paid in other than United States
dollars shall provide for payment by other than EFT.
(3) Classified contracts (see 4.401) 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.
(4) Contracts executed by deployed contracting officers in the
course of military operations, including, but not limited to,
contingency operations as defined in 10 U.S.C. 101(a)(13), or contracts
executed by any contracting officer in the conduct of emergency
operations, such as responses to natural disasters or national or civil
emergencies, shall provide for payment by other than EFT where (i) EFT
payment is not known to be possible, or (ii) EFT payment would not
support the objectives of the operation. Contracting officers
predesignated to perform contracting duties in the event of these
operations shall include coordinated plans for payment arrangements as
part of the pre-contingency contract operations planning.
32.1102 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 which 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 Contract clauses.
(a) Unless instructed otherwise by the cognizant payment office or
agency guidance, the contracting officer shall insert the clause at
52.232-33, Mandatory Information for Electronic Funds Transfer Payment,
in all solicitations and resulting contracts which (1) will not be paid
through use of the Governmentwide commercial purchase card (see
13.103(e)); and (2) are not otherwise excepted in accordance with
32.1101(d). The clause may be inserted in other contracts if the
contractor requests payment by EFT and the payment office concurs.
(b) Unless instructed otherwise by agency guidance, the contracting
officer shall insert the clause at 52.232-34, Optional Information for
Electronic Funds Transfer Payment, in all solicitations and resulting
contracts which (1) Do not contain the clause at 52.232-33; (2) Will
not be paid through use of the Governmentwide commercial purchase card
(see 13.103(e)); and (3) Are not otherwise excepted in accordance with
32.1101(d).
(c) For contracts containing the clause at 52.212-4, Contract Terms
and Conditions--Commercial Items, if the clause at 52.232-33, Mandatory
Information for Electronic Funds Transfer Payment, will not be included
in the contract in accordance with paragraph (a) of this section, the
contracting officer shall attach an addendum to the contract that
deletes the clause at 52.232-33 and--
(1) If required by paragraph (b) of this section, incorporates the
clause at 52.232-34, Optional Information for Electronic Funds Transfer
Payment, in the contract; or
(2) If the clause at 52.232-34 is not required, specifies that the
Government will make payment under the contract by check.
(d) 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.
PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
10. Section 52.212-4 is amended by revising the date of the clause;
and in paragraph (i) by revising the third and fifth sentences to read
as follows:
52.212-4 Contract Terms and Conditions-Commercial Items.
* * * * *
CONTRACT TERMS AND CONDITIONS--COMMERCIAL ITEMS (AUG 1996)
* * * * *
(i) * * * Unless otherwise provided by an addendum to this
contract, the Government shall make payment in accordance with the
clause at FAR 52.232-33, Mandatory Information for Electronic Funds
Transfer Payment, which is incorporated herein by reference. * * *
For the purpose of computing the discount earned, payment shall be
considered to have been made on the date which appears on the
payment check or the specified payment date if an electronic funds
transfer payment is made.
* * * * *
52.232-28 [Reserved]
11. Section 52.232-28 is removed and reserved.
12. Section 52.232-33 and 52.232-34 are added to read as follows:
52.232-33 Mandatory Information for Electronic Funds Transfer Payment.
As prescribed in 32.1103(a) and (c), insert the following clause:
MANDATORY INFORMATION FOR ELECTRONIC FUNDS TRANSFER PAYMENT (AUG 1996)
(a) Method of payment. Payments by the Government under this
contract, including invoice and contract financing payments, may be
made by check or electronic funds transfer (EFT) at the option of
the Government. If payment is made by EFT, the Government may, at
its option, also forward the associated payment information by
electronic transfer. As used in this clause, the term ``EFT'' refers
to the funds transfer and may also include the information transfer.
(b) Mandatory submission of Contractor's EFT information. (1)
The Contractor is required, as a condition to any payment under this
contract, to provide the Government with the information required to
make payment by EFT as described in paragraph (d) of this clause,
unless the payment office determines that submission of the
information is not required. However, until January 1, 1999, in the
event the Contractor certifies in writing to the payment office that
the Contractor does not have an account with a financial institution
or an authorized payment agent, payment shall be made by other than
EFT. For any payments to be made after January 1, 1999, the
Contractor shall provide EFT information as described in paragraph
(d) of this clause.
(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
payment office.
(c) Contractor's EFT information. Prior to submission of the
first request for payment (whether for invoice or contract financing
payment) under this contract, the Contractor shall provide the
information required to make contract payment by EFT, as described
in paragraph (d) of this clause, directly to the Government payment
office named in this contract. If more than one payment 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
changed information to the designated payment office(s).
(d) Required EFT information. 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 at the Government's option. The Contractor shall
provide the following information for both methods in a form
acceptable to the designated payment office. The Contractor may
supply this data for this or multiple contracts (see paragraph (b)
of this clause).
(1) The contract number to which this notice applies.
(2) The Contractor's name and remittance address, as stated in
the contract, and account number at the Contractor's financial
agent.
(3) The signature (manual or electronic, as appropriate), title,
and telephone number of
[[Page 45774]]
the Contractor official authorized to provide this information.
(4) For ACH payments only:
(i) Name, address, and 9-digit Routing Transit Number of the
Contractor's financial agent.
(ii) Contractor's account number and the type of account
(checking, saving, or lockbox).
(5) For Federal Reserve Wire Transfer System payments only:
(i) Name, address, telegraphic abbreviation, and the 9-digit
Routing Transit Number for the Contractor's financial agent.
(ii) 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, and 9-digit Routing Transit Number of the
correspondent financial institution receiving the wire transfer
payment.
(e) Suspension of payment. (1) Notwithstanding the provisions of
any other clause of this contract, the Government is not required to
make any payment under this contract until after receipt, by the
designated payment 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, any invoice or contract financing request shall be
deemed not to be a valid invoice or contract financing request as
defined in the Prompt Payment clause of this contract.
(2) If the EFT information changes after submission of correct
EFT information, the Government shall begin using the changed EFT
information no later than the 30th day after its receipt to the
extent payment is made by EFT. However, the Contractor may request
that no further payments be made until the changed EFT information
is implemented by the payment office. If such suspension would
result in a late payment under the Prompt Payment clause 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) Contractor EFT arrangements. The Contractor shall designate
a single financial agent capable of receiving and processing the
electronic funds transfer using the EFT methods described in
paragraph (d) of this clause. The Contractor shall pay all fees and
charges for receipt and processing of transfers.
(g) Liability for uncompleted or erroneous transfers. (1) If an
uncompleted or erroneous transfer occurs because the Government
failed to use the Contractor-provided 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
Contractor-provided EFT information was incorrect at the time 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 retains the right to either make payment by
mail or suspend the payment in accordance with paragraph (e) of this
clause.
(h) EFT and prompt payment. (1) A payment shall be deemed to
have been made in a timely manner in accordance with the Prompt
Payment clause of this contract if, in the EFT payment transaction
instruction given 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.
(2) When payment cannot be made by EFT because of incorrect EFT
information provided by the Contractor, no interest penalty is due
after the date of the uncompleted or erroneous payment transaction,
provided that notice of the defective EFT information is issued to
the Contractor within 7 days after the Government is notified of the
defective EFT information.
(i) EFT and assignment of claims. If the Contractor assigns the
proceeds of this contract as provided for in the Assignment of
Claims clause of this contract, the assignee shall provide the
assignee EFT information required by paragraph (d) of this clause.
In all respects, the requirements of this clause shall apply to the
assignee as if it were the Contractor. EFT information which 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) Payment office discretion. If the Contractor does not wish
to receive payment by EFT methods for one or more payments, the
Contractor may submit a request to the designated payment office to
refrain from requiring EFT information or using the EFT payment
method. The decision to grant the request is solely that of the
Government.
(k) Change of EFT information by financial agent. The Contractor
agrees that the Contractor's financial agent may notify the
Government of a change to the routing transit number, Contractor
account number, or account type. The Government shall use the
changed data in accordance with paragraph (e)(2) of this clause. The
Contractor agrees that the information provided by the agent is
deemed to be correct information as if it were provided by the
Contractor. The Contractor agrees that the agent's notice of changed
EFT data is deemed to be a request by the Contractor in accordance
with paragraph (e)(2) that no further payments be made until the
changed EFT information is implemented by the payment office.
(End of clause)
52.232-34 Optional Information for Electronic Funds Transfer Payment.
As prescribed in 32.1103 (b) and (c), insert the following clause:
OPTIONAL INFORMATION FOR ELECTRONIC FUNDS TRANSFER PAYMENT (AUG 1996)
(a) Method of payment. (1) Except as provided in paragraph
(a)(2) of this clause, after the Contractor provides the information
described in paragraph (d) of this clause, in accordance with
paragraph (b) of this clause, payments by the Government under this
contract, including invoice and contract financing payments, may be
made by check or electronic funds transfer (EFT) at the option of
the Government. If payment is made by EFT, the Government may, at
its option, also forward the associated payment information by
electronic transfer. As used in this clause, the term ``EFT'' refers
to the funds transfer and may also include the information transfer.
(2) Notwithstanding the provision of this clause making the
furnishing of EFT information optional, the Contractor shall furnish
the EFT information described in paragraph (d) for any payment to be
made after January 1, 1999.
(b) Contractor consent. (1) If the Contractor is willing to be
paid by EFT, the Contractor shall provide the EFT information
described in paragraph (d) of this clause. The Contractor agrees
that, after providing EFT information in accordance with this
clause, the Contractor cannot withdraw the Government's right to
make payment by EFT for this contract.
(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
payment office.
(c) Contractor's EFT information. Prior to submission of the
first request for payment (whether for invoice or contract financing
payment) under this contract, for which the Contractor desires EFT
payment, the Contractor shall provide the information required to
make contract payment by EFT, as described in paragraph (d) of this
clause, directly to the Government payment office named in this
contract. If more than one payment 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 changed information to the designated
payment office(s).
(d) Required EFT information. The Government may make payment by
EFT through either an Automated Clearing House (ACH) subject to the
domestic banking laws of the United States or the Federal Reserve
Wire Transfer System at the Government's option. The Contractor
shall provide the following information for both methods in a form
acceptable to the designated payment office. The Contractor may
supply this data for this or multiple contracts (see paragraph (b)
of this clause).
(1) The contract number to which this notice applies.
(2) The Contractor's name and remittance address, as stated in
the contract, and account number at the Contractor's financial
agent.
(3) The signature (manual or electronic, as appropriate), title,
and telephone number of
[[Page 45775]]
the Contractor official authorized to provide this information.
(4) For ACH payment only:
(i) Name, address, and 9-digit Routing Transit Number of the
Contractor's financial agent.
(ii) Contractor's account number and the type of account
(checking, saving, or lockbox).
(5) For Federal Reserve Wire Transfer System payments only:
(i) Name, address, telegraphic abbreviation, and the 9-digit
Routing Transit Number for the Contractor's financial agent.
(ii) 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, and 9-digit Routing Transit Number of the
correspondent financial institution receiving the wire transfer
payment.
(e) Suspension of payment. (1) Notwithstanding the provisions of
any other clause of this contract, if, after receipt of the
Contractor's EFT information in accordance with paragraph (b) of
this clause, the EFT information is found to be incorrect, or, for
payment after January 1, 1999, if EFT information has not been
furnished, then until receipt by the designated payment office of
the correct EFT information from the Contractor, (i) the Government
is not required to make any further payment under this contract; and
(ii) any invoice or contract financing request shall be deemed not
to be a valid invoice or contract financing request as defined in
the Prompt Payment clause of this contract.
(2) If the EFT information changes after submission of correct
EFT information, the Government shall begin using the changed EFT
information no later than the 30th day after its receipt to the
extent payment is made by EFT. However, the Contractor may request
that no further payments be made until the changed EFT information
is implemented by the payment office. If such suspension would
result in a late payment under the Prompt Payment clause 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) Contractor EFT arrangements. The Contractor shall designate
a single financial agent capable of receiving and processing the
electronic funds transfer using the EFT methods described in
paragraph (d) of this clause. The Contractor shall pay all fees and
charges for receipt and processing of transfers.
(g) Liability for uncompleted or erroneous transfers. (1) If an
uncompleted or erroneous transfer occurs because the Government
failed to use the Contractor-provided 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
Contractor-provided EFT information was incorrect at the time 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 retains the right to either make payment by
mail or suspend the payment in accordance with paragraph (e) of this
clause.
(h) EFT and prompt payment. (1) A payment shall be deemed to
have been made in a timely manner in accordance with the Prompt
Payment clause of this contract if, in the EFT payment transaction
instruction given 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.
(2) When payment cannot be made by EFT because of incorrect EFT
information provided by the Contractor, no interest penalty is due
after the date of the uncompleted or erroneous payment transaction,
provided that notice of the defective EFT information is issued to
the Contractor within 7 days after the Government is notified of the
defective EFT information.
(i) EFT and assignment of claims. If the Contractor assigns the
proceeds of this contract as provided for in the Assignment of
Claims clause of this contract, the assignee shall provide the
assignee EFT information required by paragraph (d) of this clause.
In all respects, the requirements of this clause shall apply to the
assignee as if it were the Contractor. EFT information which 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) Payment office discretion. If, after submitting the EFT
information, the Contractor does not wish to receive payment by EFT
methods for one or more payments, the Contractor may submit a
request to the designated payment office to refrain from using the
EFT payment method. The decision to grant the request is solely that
of the Government.
(k) Change of EFT information by financial agent. The Contractor
agrees that the Contractor's financial agent may notify the
Government of a change to the routing transit number, Contractor
account number, or account type. The Government shall use the
changed data in accordance with paragraph (e)(2) of this clause. The
Contractor agrees that the information provided by the agent is
deemed to be correct information as if it were provided by the
Contractor. The Contractor agrees that the agent's notice of changed
EFT data is deemed to be a request by the Contractor in accordance
with paragraph (e)(2) that no further payments be made until the
changed EFT information is implemented by the payment office.
(End of clause)
Federal Acquisition Circular (FAC) 90-42 is issued under the
authority of the Secretary of Defense, the Administrator of General
Services, and the Administrator for the National Aeronautics and Space
Administration.
Unless otherwise specified, all Federal Acquisition Regulation
(FAR) and other directive material contained in FAC 90-42 is effective
August 29, 1996.
Dated: August 21, 1996.
Eleanor R. Spector,
Director, Defense Procurement.
Dated: August 22, 1996.
Ida M. Ustad,
Deputy Associate Administrator, Office of Acquisition Policy.
Dated: August 21, 1996.
Tom Luedtke,
Deputy Associate Administrator for Procurement, NASA.
[FR Doc. 96-22034 Filed 8-28-96; 8:45 am]
BILLING CODE 6820-EP-P
