Federal Acquisition Regulation; Electronic Funds Transfer

Federal RegisterMar 4, 1999

Ask Donna

What actually matters in this document.

Text

DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 13, 16, 32, and 52

[FAC 97-11; FAR Case 91-118; Item IV]

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: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Civilian Agency Acquisition Council and the Defense

Acquisition Regulations Council have agreed to adopt as final, with

changes, the interim rule published in Federal Acquisition Circular 90-

42 on August 29, 1996. The rule amends the Federal Acquisition

Regulation (FAR) to address the use of electronic funds transfers (EFT)

for Federal contract payments made after January 1, 1999, and to

[[Page 10539]]

facilitate implementation of Public Law 104-134 which mandates payment

by EFT in most situations.

EFFECTIVE DATE: May 3, 1999.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS

Building, Washington, DC, 20405, (202) 501-4755, for information

pertaining to status or publication schedules. For clarification of

content, contact Mr. Jeremy Olson, at (202) 501-0692. Please cite FAC

97-11, FAR case 91-118.

SUPPLEMENTARY INFORMATION:

A. Background

Subsection 31001(x)(1) of the Debt Collection Improvement Act of

1996 (Pub. L. 104-134) amends 31 U.S.C. 3332 to require, subject to the

authority of the Secretary of the Treasury to grant waivers, that--

1. Beginning July 26, 1996, payments to newly eligible recipients

must be made by EFT unless the recipient of those payments certifies

that the recipient does not have an account with a financial

institution or an authorized payment agent; and

2. Beginning January 2, 1999, all Federal payments (other than

payments under the Internal Revenue Code of 1986) shall be made by

electronic funds transfer (EFT).

Under this statute, the Department of the Treasury is responsible

for issuing implementing regulations. Treasury issued an interim rule

which was published at 61 FR 39254, July 26, 1996. The interim rule

added Part 208 to Title 31, Code of Federal Regulations, and addressed

the time period from July 26, 1996, through January 1, 1999 (``phase

one''). Treasury published a final rule at 63 FR 51490, September 25,

1998 that provides guidance at 31 CFR 208 regarding compliance with

Pub. L. 104-134's EFT requirement and establishes the circumstances

under which waivers are available for the time period beginning January

2, 1999 (``phase two'').

An interim FAR rule was published at 61 FR 45770, August 29, 1996.

A proposed FAR rule, which differed significantly from the interim

rule, was published at 63 FR 36522, July 6, 1998. Public comments on

the proposed rule were received from 17 sources. All comments were

considered in developing the final rule.

This final rule differs from the proposed rule to--

(1) Reflect the analysis and disposition of public comments;

(2) Implement applicable provisions of Treasury's final rule;

(3) Remove references to the ``phase one'' time period, which ended

January 1, 1999;

(4) Add a new contract clause at 52.232-38, Submission of

Electronic Funds Transfer Information with Offer;

(5) Address the situation when an offeror is required to submit EFT

information prior to award; and

(6) Make editorial changes.

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.

B. Regulatory Flexibility Act

The changes 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 IRFA was performed in conjunction with the proposed

rule published at 63 FR 36522, July 6, 1998.

A Final Regulatory Flexibility Analysis (FRFA) has been performed

and submitted to the Chief Counsel for Advocacy of the Small Business

Administration. A copy of the FRFA may be obtained from the FAR

Secretariat. The FRFA is summarized as follows:

The objective of the rule is to revise current procedures for

the use of electronic funds transfers for Federal contract payments

to comply with Subsection 31001(x)(1) of the Debt Collection

Improvement Act of 1996 (Pub. L. 104-134). Subsection 31001(x)(1) of

the Act amends 31 U.S.C. 3332 to require, subject to the authority

of the Secretary of the Treasury to grant waivers, that all Federal

payment shall be made by EFT beginning January 2, 1999.

Several respondents commented on the impact of this rule on

small businesses. One respondent remarked on the ``financial burden

now being inflicted by the changing payment policies.'' This method

of payment, rather than a financial burden, should be economically

beneficial to small and large entities. Administratively, EFT

information is noncomplex and easy to provide to the Government with

an offer, after award, or through the Central Contractor

Registration process. Once the information has been furnished, the

payment process will be faster and less burdensome than the payment

process by check since small businesses will not have to worry about

mail delays, depositing checks, lost mail, etc. A second respondent

raised the concern about protecting small businesses from financial

harm by safeguarding banking information from unauthorized use. The

final rule addresses this concern at FAR 32.1104 by requiring

agencies to safeguard EFT information provided to the Government.

The final rule will apply, beginning January 2, 1999, to all

small and large businesses who enter into contracts with the Federal

Government unless one of the conditions enumerated at FAR 32.1103

applies. The rule requires contractors to submit identification and

account number information which will enable the Government to make

contract payments by EFT. Administrative or financial personnel who

have general knowledge of the contractor's bank account or a

financial agent, are able to prepare the information required by the

clauses.

The goal of the alternative selected and reflected in the final

rule is to provide flexibility with regard to the needs of small

entities within the constraints and objectives of Pub. L. 104-134

and implementing Treasury Regulations.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply

because the final rule contains information collection requirements.

The collection of this information has been approved by the Office of

Management and Budget (OMB) under OMB Control Number 9000-0144. Public

comments concerning this request were invited through a Federal

List of Subjects in 48 CFR Parts 13, 16, 32, and 52

Government procurement.

Dated: February 25, 1999.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, 48 CFR Parts 13, 16, 32, and 52 are 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 13.201 is amended in paragraph (d) by removing

``32.1103'' and inserting ``32.1110''.

3. Section 13.301 is amended at the end of paragraph (b) by adding

a new sentence to read as follows:

13.301 Governmentwide commercial purchase card.

* * * * *

(b) * * * See 32.1110(d) for instructions for use of the

appropriate clause when payment under a written contract will be made

through use of the card.

* * * * *

4. Section 13.302-1 is amended by revising paragraph (e) to read as

follows:

13.302-1 General.

* * * * *

[[Page 10540]]

(e) In accordance with 31 U.S.C. 3332, electronic funds transfer

(EFT) is required for payments except as provided in 32.1110. See

Subpart 32.11 for instructions for use of the appropriate clause in

purchase orders. When obtaining oral 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

5. Section 16.505 is amended by redesignating paragraph

(a)(6)(viii) as (a)(6)(ix); and adding a new paragraph (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 32.1110(e)).

* * * * *

PART 32--CONTRACT FINANCING

6-7. Subpart 32.11 is revised to read as follows:

Subpart 32.11--Electronic Funds Transfer

32.1100 Scope of subpart.

32.1101 Statutory requirements.

32.1102 Definitions.

32.1103 Applicability.

32.1104 Protection of EFT information.

32.1105 Assignment of claims.

32.1106 EFT mechanisms.

32.1107 Payment information.

32.1108 Payment by Governmentwide commercial purchase card.

32.1109 EFT information submitted by offerors.

32.1110 Solicitation provision and contract clauses.

Subpart 32.11--Electronic Funds Transfer

32.1100 Scope of subpart.

This subpart provides policy and procedures for contract financing

and delivery payments to contractors by electronic funds transfer

(EFT).

32.1101 Statutory requirements.

31 U.S.C. 3332 requires, subject to implementing regulations of the

Secretary of the Treasury at 31 CFR part 208, that EFT be used to make

all contract payments.

32.1102 Definitions.

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,

Fedwire transfers, and transfers made at automatic teller machines and

point-of-sale terminals. For purposes of compliance with 31 U.S.C. 3332

and implementing regulations at 31 CFR part 208, the term ``electronic

funds transfer'' includes a Governmentwide commercial purchase card

transaction.

EFT information means information necessary for making a payment by

EFT through specified EFT mechanisms.

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 Applicability.

The Government shall provide all contract payments through EFT

except if--

(a) The office making payment under a contract that requires

payment by EFT, loses the ability to release payment by EFT. To the

extent authorized by 31 CFR part 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;

(b) The payment is to be received by or on behalf of the contractor

outside the United States and Puerto Rico (but see 32.1106(b));

see 32.1106(b));

(d) Payment by EFT under a classified contract (see 4.401) could

compromise the safeguarding of classified information or national

security, or where arrangements for appropriate EFT payments would be

impractical due to security considerations;

(e) 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 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, if--

(1) EFT is not known to be possible; or

(2) EFT payment would not support the objectives of the operation;

(f) The agency does not expect to make more than one payment to the

same recipient within a one-year period;

(g) An agency's need for supplies and services is of such unusual

and compelling urgency that the Government would be seriously injured

unless payment is made by a method other than EFT;

(h) There is only one source for supplies and services and the

Government would be seriously injured unless payment is made by a

method other than EFT; or

(i) Otherwise authorized by Department of the Treasury Regulations

at 31 CFR part 208.

32.1104 Protection of EFT information.

The Government shall protect against improper disclosure of

contractors' EFT information.

32.1105 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.

32.1106 EFT mechanisms.

(a) Domestic EFT mechanisms. 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

(U.S. Automated Clearing House, and Fedwire Transfer System) of EFT.

However, the head of an agency may authorize the use of any other EFT

mechanism for domestic EFT with the concurrence of the office or agency

responsible for making payments.

(b) Nondomestic EFT mechanisms and other than United States

currency. The Government shall provide payment by other than EFT for

payments received by or on behalf of the contractor outside the United

States and Puerto Rico or for contracts paid in other than United

States currency. However, the head of an agency may authorize

appropriate use of EFT with the concurrence of the office or agency

responsible for making payments if--

[[Page 10541]]

(1) The political, financial, and communications infrastructure in

a foreign country supports payment by EFT; or

(2) Payments of other than United States currency may be made

safely.

32.1107 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 EFT instruction to the Federal Reserve

System.

32.1108 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. The Government reimburses

the third party at a later date for the third party's payment to the

contractor.

(a) The clause at 52.232-36, 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) 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 at 52.232-36, Payment by Third Party, as prescribed by

32.1110(d). However, payment by a purchase card also may be made under

a contract that does not contain the clause to the extent the

contractor agrees to accept that method of payment.

the contract--

(1) Identify the third party and the particular purchase card to be

used; and

(2) Not include the purchase card account number. The purchase card

account number should be provided separately to the contractor.

32.1109 EFT information submitted by offerors.

If offerors are required to submit EFT information prior to award,

the successful offeror is not responsible for resubmitting this

information after award of the contract except to make changes, or to

place the information on invoices if required by agency procedures.

Therefore, contracting officers shall forward EFT information provided

by the successful offeror to the appropriate office.

32.1110 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(a) through (i) applies--

(1) The contracting officer shall insert the clause at 52.232-33,

Payment by Electronic Funds Transfer--Central Contractor Registration,

in all solicitations and contracts if the payment office uses the

Central Contractor Registration (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--Other than Central Contractor

Registration, in all other solicitations and contracts. The contracting

officer also shall insert this clause if the payment office currently

does not 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 (b)(1) of the clause, a particular time after

award, such as a fixed number of days, or event such as the submission

of the first request for payment.

(B) If no agency procedures are prescribed, the time period

inserted in paragraph (b)(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 authorized, in accordance with

32.1106, 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 nondomestic

EFT mechanism.

office in accordance with agency procedures, the contracting officer

shall insert in solicitations and contracts the clause at 52.232-35,

Designation of Office for Government Receipt of Electronic Funds

Transfer Information, or a clause substantially the same as 52.232-35

that clearly informs the contractor 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 52.232-36, 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 52.232-36, 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 that the ordering office designate the method of

payment for individual orders, the contracting officer shall insert, in

the solicitation and contract or agreement, the clause at 52.232-37,

Multiple Payment Arrangements, and, to the extent they are applicable,

the clauses at--

(1) 52.232-33, Payment by Electronic Funds Transfer--Central

Contractor Registration;

(2) 52.232-34, Payment by Electronic Funds Transfer--Other than

Central Contractor Registration; and

(3) 52.232-36, Payment by Third Party.

(f) If more than one disbursing office will make payment under a

contract or agreement, the contracting officer, or ordering office (if

the contract provides for choices between EFT clauses on individual

orders or classes of orders), shall include or identify 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--Other than Central Contractor

Registration, and an offeror is required to submit EFT information

prior to award--

(1) The contracting officer shall insert in the solicitation the

provision at 52.232-38, Submission of Electronic Funds Transfer

Information with Offer, or a provision substantially the same; and

(2) For sealed bid solicitations, the contracting officer shall

amend 52.232-

[[Page 10542]]

38 to ensure that a bidder's EFT information--

(i) Is not a part of the bid to be opened at the public opening;

and

(ii) May not be released to members of the general public who

request a copy of the bid.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

8. Section 52.212-4 is amended by revising the date and the third

sentence in paragraph (i) of the clause to read as follows:

52.212-4 Contract Terms and Conditions--Commercial Items.

* * * * *

Contract Terms and Conditions--Commercial Items (May 1999)

* * * * *

(i) * * * If the Government makes payment by Electronic Funds

Transfer (EFT), see 52.212-5(b) for the appropriate EFT clause. * * *

* * * * *

9. Section 52.212-5 is amended by revising the date of the clause;

in the parenthetical in paragraph (b)(21) by inserting a period after

the ``C'' in ``U.S.C''; by redesignating (b)(22) and (b)(23) as (b)(25)

and (b)(26); and by adding new paragraphs (b)(22) through (b)(24) 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 (May 1999)

* * * * *

(b) * * *

______(22) 52.232-33, Payment by Electronic Funds Transfer--

Central Contractor Registration (31 U.S.C. 3332).

______(23) 52.232-34, Payment by Electronic Funds Transfer--

Other than Central Contractor Registration (31 U.S.C. 3332).

______(24) 52.232-36, Payment by Third Party (31 U.S.C. 3332).

* * * * *

10. Section 52.213-4 is amended by revising the date of the clause;

by removing paragraph (a)(2)(vi); and redesignating paragraphs

(a)(2)(vii) through (a)(2)(ix) as (a)(2)(vi) through (a)(2)(viii),

respectively; and by adding new 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 Acquisitions (Other Than Commercial

Items) (May 1999)

* * * * *

(b) * * *

(1) * * *

(ix) 52.232-33, Payment by Electronic Funds Transfer--Central

Contractor Registration (May 1999). (Applies when the payment will be

made by electronic funds transfer (EFT) and the payment office uses the

Central Contractor Registration (CCR) database as its source of EFT

information.)

(x) 52.232-34, Payment by Electronic Funds Transfer--Other than

Central Contractor Registration (May 1999). (Applies when the payment

will be made by EFT and the payment office does not use the CCR

database as its source of EFT information.)

* * * * *

11. Sections 52.232-33 and 52.232-34, headings and text, are

revised to read as follows:

52.232-33 Payment by Electronic Funds Transfer--Central Contractor

Registration.

As prescribed in 32.1110(a)(1), insert the following clause:

Payment by Electronic Funds Transfer--Central Contractor Registration

(May 1999)

(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) 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 (d) of this clause).

(b) Contractor's EFT information. The Government shall make

payment to the Contractor using the EFT information contained in the

Central Contractor Registration (CCR) database. In the event that

the EFT information changes, the Contractor shall be responsible for

providing the updated information to the CCR database.

by EFT through either the Automated Clearing House (ACH) network,

subject to the rules of the National Automated Clearing House

Association, or the Fedwire Transfer System. The rules governing

Federal payments through the ACH are contained in 31 CFR part 210.

(d) Suspension of payment. If the Contractor's EFT information

in the CCR database is incorrect, then the Government need not make

payment to the Contractor under this contract until correct EFT

information 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.

(e) 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.

(f) Liability for uncompleted or erroneous transfers. (1) If an

uncompleted or erroneous transfer occurs because the Government used

the Contractor's EFT information incorrectly, 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 (d) of this clause 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 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 (d) 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 made by the Contractor's financial agent.

[[Page 10543]]

(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 EFT

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 Government 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--Other than Central

Contractor Registration.

As prescribed in 32.1110(a)(2), insert the following clause:

Payment by Electronic Funds Transfer--Other Than Central Contractor

Registration (May 1999)

(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) 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 payment due dates until

such time as the Government makes payment by EFT (but see paragraph

(d) of this clause).

(b) Mandatory submission of Contractor's EFT information. (1)

The Contractor is required to provide the Government with the

information required to make payment by EFT (see paragraph (j) 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

____________________ [the Contracting Officer shall insert date,

days after award, days before first request, the date specified for

receipt of offers if the provision at 52.232-38 is utilized, or

``concurrent with first request'' as prescribed by the head of the

agency; 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 that identify that

designated office as the office to receive EFT information for that

contract.

by EFT through either the Automated Clearing House (ACH) network,

subject to the rules of the National Automated Clearing House

Association, or the Fedwire Transfer System. The rules governing

Federal payments through the ACH are contained in 31 CFR part 210.

(d) 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. Until receipt of the correct EFT information, 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 by the

designated office 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.

(e) Liability for uncompleted or erroneous transfers. (1) If an

uncompleted or erroneous transfer occurs because the Government used

the Contractor's EFT information incorrectly, 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 (d) shall apply.

(f) 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.

(g) 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 (j) 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 (d) of this clause.

(h) 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.

(i) Payment information. The payment or disbursing office shall