Attachment 3

**Electronic**

**Funds**

**Transfer**

***Financial Management Service***

# Payment Advice Internet Delivery (PAID) Fact Sheet 

**What is PAID?**

PAID is a system developed by the U.S. Department of the Treasury\'s
Financial Management Service (FMS) to provide participating Federal
agencies a method of making remittance information available to their
vendors through the Internet. The Internet address for the PAID site is:

http://arfc.fms.treas.gov

**Why was PAID developed?**

AID was developed to provide Federal agencies with an alternative method
to deliver remittance information to their vendors. Congressional
legislation mandates that after January 1, 1999, most

Federal payments, including vendor payments, must be made
electronically. Electronic vendor payments with remittance information
are sent to the vendor\'s financial institution through the Automated
Clearing House (ACH) system. The vendor\'s financial institution passes
me remittance information to the vendor per a preexisting agreement with
the vendor. Some vendors were reluctant to convert to ACH payments
because some financial institutions were not able to provide remittance
information. The National Automated Clearing House Association (NACHA)
passed a rule that effective September 18, 1998, all financial
institutions receiving corporate ACH transactions are required to pass
addenda information to their corporate customers upon request.

**How much does it cost to participate in PAID?**

The system is free of charge to participating Federal Agencies and their
registered vendors with Internet access.

**How does a Federal agency participate in PAID?**

An agency interested in participating in PAID will sign a Memorandum of
Understanding with FMS. Once all the necessary information has been
provided and the agreement has been finalized, the agency will notify
its vendors that PAID is available.

**How does a vendor participate in PAID?**

To participate in PAID, you must be using an Internet browser with the
capabilities equivalent to Microsoft Internet Explorer version 3.*x* (or
greater) or NetScape Navigator version 3.x (or greater). Vendors
interested in participating in PAID should first check the list of
participating agencies on the PAID Web site to determine if any of the
agencies paying them are participants. Vendors must register for PAID
on-line by completing the registration form and choosing one of the
following delivery methods: Web access to remittance data, e-mail
delivery of remittance data, or e-mail notification of new remittance
data. The PAID Web master will verify and activate the vendor\'s
registration and the vendor will receive e-mail notification of
acceptance. A vendor need only register one time for each Taxpayer
Identification Number (TIN) to access remittance data from all
participating agencies.

**What data are in the PAID system?**

Displayed data fields are limited to paying agency date of payment,
payment amount, invoice number, and other remittance information such as
interest penalty (as provided by the agency in the addendum record). The
TIN is used as the key to the vendor registration, but it is not
displayed in PAID. Banking information is not part of PAID. PAID only
contains data on payments made by participating agencies to registered
vendors. Vendors can only access their own payment data. PAID contains
data for Cash Concentration and Disbursement (CCD+) Plus Addendum
payments only. Given the amount of remittance information contained in a
Corporate Trade Exchange (CTX) payment, it is assumed that vendors
receiving those transactions have existing agreements with their
financial institutions to provide them with the remittance information.

**How does a vendor access its data in PAID?**

After receiving the registration acceptance notice, a vendor can log
into PAID and query, on-line, payments by date, date range, invoice
number, dollar amount, agency, or any combination thereof. If a vendor
registers for e-mail delivery of remittance data, it will receive a
message containing its remittance information. If a vendor registers for
e-mail notification it will receive a message that it has new remittance
information in PAID. An on-line demonstration is available on the PAID
Web site.

**When are data available and for how long?**

Data should be available within 24 hours of the date of payment and are
retained for two months from the date of payment.

**How secure is data on the Internet?**

To access PAID, you must be using a browser with capabilities equivalent
to Microsoft Internet Explorer version 3.x (or greater) or Netscape
Navigator version 3.x (or greater). If you access the Internet through a
local area network (LAN) and encounter difficulty accessing the secure
site, contact your LAN administrator for assistance. PAID is a secure
site using the standard Secure Sockets Layer (SSL) to provide a secure
channel of communication between a Web browser and the server. This
authenticates the identity of the server to the browser, and provides
privacy by encrypting and decrypting all data sent between them.

**If a vendor receives data through PAID but still has a question, whom
should it contact?**

Information in PAID appears as it is provided by the Federal agency
authorizing the payment. If a vendor has any questions or needs
additional information about data displayed in PAID, it must contact the
agency that authorized the payment. Participating agency contacts are
listed on the PAID Web sire.

**What alternatives to PAID are available?**

The primary alternative to PAID is for the vendor to receive its
remittance information from its financial institution. Registration in
PAID does not preclude the remittance information from accompanying the
payment. The financial institution still receives the payment and the
remittance information. Vendors that want to streamline their
accounts-receivable processing may prefer to receive the remittance
information electronically from their financial institutions and pass it
directly to their accounts-receivable systems. Several Federal agencies
have developed alternative methods to deliver remittance information,
including their own Web sites, touch-tone telephone response systems,
and fax-on-demand systems. A list of these Federal agencies is available
on the PAID Web site.

July 1998

IMPLEMENTATION INSTRUCTIONS: FINAL RULE REGARDING ELECTRONIC FUNDS
TRANSFER AS CONTAINED IN FEDERAL ACQUISITION CIRCULAR (FAC) 97-11 and
DEPARTMENT OF THE INTERIOR FINANCIAL ADMINISTRATION

MEMORANDUM NO 98-034 (II.J.) DATED DECEMBER 17, 1998

Based on the final rule contained in F AC 97-11, Federal Acquisition
Regulation (FAR) Parts 13, 16, 32 and 52, supplementary sections of the
Department of the Interior Acquisition Regulation (DIAR) and the U.S.
Department of the Interior Integrated Charge Card Program Guidelines
(November 1998) (Charge Card Guidelines) are amended as follows:

**FAC 97-11 Changes:**

-   **FAR Part 13:**

> **(1)** The first sentence in FAR 13.201(d) was amended to reference a
> new FAR section applicable to EFT, and read as follows: \"(d)
> Micro-purchases do not require provisions or clauses, except as
> provided at 32.1110.\"

**Interim DIAR and/or Charge Card Guidelines Amendments**

> -Applies to the contracting officer\'s level as covered in the FAR. No
> supplementary interim DIAR changes required for this section. Charge
> Card Guidelines will be amended to cross-reference this section.
>
> \(2\) FAR 13.301(b) regarding the Governmentwide commercial purchase
> card was amended to add a new sentence that refers users to the
> guidance at FAR 32.110(d) regarding selection of the proper
> provision/clause when payment under a written contract will be made
> through use of the card, i.e., FAR 52.232-36, Payment by Third Party
> (May 1999). This is a new clause.

**Interim DIAR and/or Charge Card Guidelines Amendments**

-Applies to the contracting officer\'s level as covered in the FAR. No
supplementary interim DIAR changes required for this section. Since the
Charge Card Guidelines are primarily written to address micropurchases,
i.e., use of the charge card as a procurement method for micropurchases,
an annex will be added to the Charge Card Guidelines providing
instructions for personnel with contracting officer\'s warrants who are
authorized to use the charge card as a method of payment. The annex will
reference the revised guidance at FAR 13.301 (b) and the prescription
regarding the clause/provision at FAR 52.232-36, Payment by Third Party
(May 1999).

> Both FAR 13.301 (b) and section 3.1.B of the Charge Card Guidelines
> encourage use of the charge card by warranted contracting officers as
> a method of payment for transactions over the micropurchase threshold,
> i.e., to place orders and to pay for purchases against contracts under
> FAR Part 8 procedures, and to place orders and/or make payment under
> other contractual instruments, when agreed to by the contractor. In
> the interim, pursuant to the revised guidance at FAR 13.301(b),
> warranted personnel shall include the clause at 52.232-36, Payment by
> Third Party (May 1999) when payment under a written contract will be
> made through use of the card. (Note: This includes purchase orders.
> See definition for \"in writing\" or \"written\" in FAR 2.101.)
>
> \(3\) FAR 13.302-1 (e) is completely revised to indicate that EFT **is
> required for payments** unless the exceptions provided in FAR32.1110
> apply (Note: DOI\'s policy (as stated in FAM 98-034) **does not**
> include all of the exceptions identified in FAR 32.1110. For that
> reason, **only the exception conditions identified in FAM 98-034 shall
> be used in requesting and granting EFT waivers.)**
>
> If waivers have not been granted by the bureau/office Chief Financial
> Officer or his/her designee, when obtaining oral quotes, the
> contracting officer shall inform the quoter of the EFT clause that
> will be in any resulting purchase order, e.g., FAR 52.232-36, Payment
> by Third Party, FAR 52.232-34, Payment by Electronic Funds
> Transfer-Other than Central Contractor Registration (31 V.S.C. 3332),
> etc.
>
> Also, the previous FAR coverage stating that, \"contracting officers
> shall not accept EFT payment data. The contractor shall provide all
> such data directly to the payment office\" has been eliminated from
> this section. The option is now open for bureau/office Chief Financial
> Officers or their designees to determine and designate the most
> suitable office responsible for collecting EFT enrollment information
> within their respective bureau/office, e.g., finance office, payment
> office, disbursing office or contracting office. Once established, the
> office address shall be used in solicitations and contracts that
> include the clause at FAR 52.232-35, Designation of Office for
> Government Receipt of Electronic Funds Transfer Information (May
> 1999).

**Interim DIAR and/or Charge Card Guidelines Amendments**

> \- Supplementary interim DIAR changes in 1413 will be made to
> incorporate FAM 98-034 (II.J.)\' s requirements regarding conditions
> for EFT exceptions. Bureau/office supplemental policy should designate
> the most suitable office responsible for collecting EFT enrollment
> information as determined by the bureau/office Chief Financial Officer
> or his/her designee. FAR 13.302-1 (e) will be referenced in the annex
> to the Charge Card Guidelines.
>
> **FAR Part 16:** The coverage at 16.505 (a)(6) which lists required
> information when placing orders under indefinite delivery contracts is
> amended at l6.505(a)(6)(viii) to include method of payment and payment
> office information, i.e., (viii) Method of payment and payment office
> if not specified in the contract (see 32.1 110(e).

2

**Interim DIAR and/or Charge Card Guidelines Amendments**

-Applies to the contracting officer\'s level as covered in the FAR. No
supplementary interim DIAR amendments required. Inclusion of coverage
regarding identification of method of payment, e.g., Payment by Third
Party, will be covered in the annex to the Charge Card Guidelines.

**FAR Part 32:** Subpart 32.11, Electronic Funds Transfer, is extended
from four to eleven sections.

**(1)** Section 32.1100 Scope of subpart. Revises previous scope of
subpart to include \"contract financing and delivery payments to
contractors by EFT.\"

**Interim DIAR and/or Charge Card Guidelines Amendments**

-No supplementary interim DIAR or Charge Card Guidelines amendments
required for this section.

**(2)** Section 32.1101 Statutory requirements. Revises previous
coverage under 32.1101 Policy, to state that 31 U.S.C. 3332 requires
that EFT be used to make all contract payments subject to implementing
regulations at 31 CFR part 208.

**Interim DIAR and/or Charge Card Guidelines Amendments**

-No supplementary interim DIAR or Charge Card Guidelines amendments
required for this section.

**(3)** Section 32.1102 Definitions. New section. Last sentence of EFT
definition and definition of Governmentwide commercial purchase card
identify the purchase card as an EFT method that 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 payment transactions in the term,
\"electronic funds transfer.\"

## Interim DIAR and/or Charge Card Guidelines Amendments 

-No supplementary interim DIAR amendments required for this section.
Charge Card Guidelines section 1.3 Definitions, will be amended to
include the definition for EFT inclusive of the Governmentwide
commercial purchase card or the charge card as contained in FAR 32.1102.

**(4)** Section 32.1103 Applicablity. New section. States the
requirement that the Government shall provide all contract payments
through EFT unless certain exceptions apply for which written waivers
are required.

### **Interim DIAR and/or Charge Card Guidelines Amendments** 

-DIAR 1432 will be amended to reference the exceptions and delegation of
authority to issue waivers identified in F AM 98-034 (II.J.). In the
meantime, the Department of the Interior policy guidance on implementing
the EFT requirements of the Debt Collection Improvement Act of 1996, as
signed by the Assistant

3

Secretary-Policy, Management and Budget on November 19, 1998 and
contained in FAM 98-034 (11.1.) shall apply in implementation of FAR
32.1103. Again, please note, there are fewer EFT waiver conditions and
authorities identified in section II. C of FAM 98-034 (II.J.) then in
FAR 32.1103. Only the conditions for exception specified in FAM 98-034
(II.J.) shall apply to DOI transactions.

Both FAR 32.1103(t) and FAM 98-034 (II.J.) allow for an EFT exception
when an agency does not expect to make more than one payment to the same
recipient within a one-year period. Since FAM 98-034(II.J.) delegates
exception/waiver authority from the Assistant Secretary- Policy,
Management and Budget to Bureau Chief Financial Officers and their
designees, the term \"agency\" as used in FAM 98-034 (II.J.) applies to
DOI bureaus/offices and not to the Department of the Interior only.

Bureau Chief Financial Officers are responsible for developing
bureau-specific policy regarding any re-delegation of waiver authority
pursuant to FAM 98-034 (II.J.) and internal procedures for obtaining and
maintaining waivers in accordance with the requirements of section II.C
of FAM 98-034 (II.J.).

Section II.B of FAM 98-034 (II.J.) contains a blanket waiver for use of
convenience checks by individuals with charge card purchase authority
only when their charge card is not accepted by a merchant. Use of
convenience checks for any other reasons requires than an individual
waiver be requested and granted on a per case basis by authorized bureau
personnel prior to check issuance. This policy is currently in effect
and will be incorporated in section 2.6 of the Charge Card Guidelines.

\(5\) Section 32.1104 Protection of EFT information. New section
requiring Government safeguarding of contractors\' EFT information from
improper disclosure.

Interim **DIAR** and/or Charge Card Guidelines Amendments -Requirement
to assure the safeguarding of electronic commerce information from loss,
misuse, or unauthorized access or modification is contained in FAR
4.502(c). DIAR 1432 will be amended to state, and it is the interim
policy, that responsible personnel shall safeguard and not improperly
disclose any payment information that they may gather from offerors
and/or contract awardees as a result of using the clause at FAR
52.232-34 Payment by Electronic Funds Transfer-other than Central
Contractor Registration or through access and use of any electronic
commerce systems.

-No supplementary interim Charge Card Guidelines amendments required for
this section per FAR 32.1110(a).

4

\(6\) Section 32.1105 Assignment of claims. No change from previous
assignment of claims coverage at FAR 32.1102.

**Interim DIAR and/or Charge Card Guidelines Amendments**

-No interim supplementary DIAR or Charge Card Guidelines amendments
required for this section.

\(7\) Section 32.1106 EFT mechanisms. New section regarding domestic and
nondomestic EFT mechanisms. As stated in II.A. of FAM 98-034 (II.J.),
\"it is the policy of the Department to utilize electronic payment
mechanisms to the fullest extent possible. All payments to non-Federal
recipients effective January 2,1999 are presumed to be made by
electronic funds transfer or other EFT compliant alternatives\...\"
Condition 2 in section IIC of FAM 98-034 (II.J.) allows for the granting
of an EFT waiver if \"the political, financial, or communications
infrastructure in a foreign country does not support payment by EFT.\"

Interim DIAR and/or Charge Card Guidelines Amendments

-DIAR 1432 will be amended to incorporate FAM 98-034 (II.J.)\'s policy,
which shall be used to supplement the requirements at FAR 32.1106 in the
interim.

-No Charge Card Guidelines amendments required for this section.

**(8)** Section 32.1107 Payment information. New section requiring
agency payment or disbursing offices to provide contractors with payment
information.

**Interim DIAR and/or Charge Card Guidelines Amendments**

-No supplementary interim DIAR or Charge Card Guidelines amendments
required for this section.

**(9)** Section 32.1108 Payment by Govenunentwide commercial purchase
card. This is a new section which establishes payment policy for
transactions in which the charge card is used as a method of payment. A
new clause at 52.232.36, Payment by Third Party (May 1999), shall be
used in written contracts for which payment will be made with the charge
card (this includes open market contract awards over the \$2,500
micropurchase threshold (see definition for \"contract\" in FAR 2.101)).
The clause requires that the contract: (a) identify the third party,
i.e., NationsBank, and the particular purchase card to be used, i.e.,
MasterCard; and (b) not include the charge card account number. The
charge card account number should be provided separately to the
contractor.

5

FAR 32.1108(b) states that payment by a charge card also may be made
under a

contract that does not contain the clause at 52.232-36 as long as the
contractor agrees to accept that method of payment.

FAR 32.1108(a) identifies principal parties in the charge card payment
process and incorporates the charge card disputes process. In the
interim, as implemented within the DOI, the clause (at 52.232-36)
provides that a contractor shall make its payment request by a charge to
a Government cardholder account with the third party, i.e., NationsBank,
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 charge card
should not be disputed when the charge is reported to the Government by
NationsBank. To the extent that such payment would otherwise not have
been approved, an authorized individual (i.e., see delegation of
micropurchase authority in Charge Card Guidelines section 3.1.A. and
DIAR 1401.603 for warranted contracting officers) shall take action to
remove the charge, such as disputing the charge with NationsBank or by
requesting that the contractor credit the charge back to the Government
under the contract. See section 3.3 of the Charge Card Guidelines,
second paragraph, and page 17, \"Disputes and Billing Errors\" in the
NationsBank MasterCard Integrated Card Program Cardholder Program Guide.

## Interim DIAR and/or Charge Card Guidelines Amendments 

\- No interim supplementary DIAR coverage required for FAR 32.1108(b)\'s
prescribed use of the clause at 52.232-36, Payment by Third Party (May
1999). DIAR 1401.603 will be amended to incorporate the delegation of
micropurchase authority contained in section 3.1.A. of the Charge Card
Guidelines. DIAR 1432 will be amended to supplement the coverage in FAR
32.1108(a) by referencing the DOI charge card contractor and the
disputes procedure references identified above.

-The annex to the Charge Card Guidelines will cross reference FAR
32.1108 and

supplementary DIAR guidance.

**(10)** Section 32.1109 EFT information submitted by offerors. New
section which minimizes EFT information collection burden on vendors by
specifying that if offerors are required to submit EFT information prior
to award the successful offeror does not have to resubmit this
information after contract award except to make changes, or to place the
information on invoices if required.

Note: Currently, DOI, offerors are [not]{.underline} required to submit
EFT information. DOI will use the clause at FAR 52.232-34, Payment by
Electronic Funds Transfer-Qther than Central Contractor Registration,
section (j) of which requires \"the Contractor\" to provide various EFT
information.

6

## Interim DIAR and/or Charge Card Guidelines Amendments 

-Applies to the contracting officer\'s level as covered in the FAR. No
supplementary interim DIAR or Charge Card Guidelines changes required
for this section.

**(11)** FAR 32.1110 Solicitation provision and contract clauses. A new
section providing EFT provision/clause prescriptions as contained in FAR
Part 52.

## Interim DIAR and/or Charge Card Guidelines Amendments 

-The following prescriptions, clauses/provisions will be incorporated in
DIAR 1432, as appropriate, and shall be used in the interim:

Bureau/office Interior Department Electronic Acquisition
System-Procurement Desktop System Administrators shall amend their local
clauses and matrices to include the following prescriptions and clauses
until the required FAR clauses are provided in an upcoming IDEAS-PD
release:

\(1\) Amend section 52.212-4 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.

\(i\) \*\*\* If the Government makes payment by Electronic Funds
Transfer (EFT),

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

\(2\) Amend section 52.212-5 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).

7

\(23\) 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).

\(3\) Amend section 52.213-4 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)(l)(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.)

\(4\) The contracting officer shall insert the clause at 52.232-34,
Payment by Electronic Funds Transfer-Other than Central Contractor
Registration (May 1999) in all solicitations and contracts unless
payment will be made exclusively through use of the charge card. (DOI
does not use the CCR. Therefore, the clause at 52.232-33, Payment by
Electronic Funds Transfer-Central Contractor Registration is not
applicable to DOI transactions.)

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.

8

\(5\) Contracting officers shall insert in solicitations and contracts
the clause at 52.232.35, Designation of Office for Government Receipt of
Electronic Funds Transfer Information (May 1999), or a clause
substantially the same as 52.232-35 that clearly informs the contractor
where to send EFT information. Bureau/office Chief Financial Officers or
their designees are responsible for determining the respective
bureau/office point for receipt of EFT information, e.g., contracting
offices, payment offices, disbursing offices, or finance offices.

\(6\) If payment under a written contract (this includes purchase
orders) will be made by a charge to a Government charge cardholder
account with a third party such as NationsBank, 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.

\(7\) If a 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 -

> A. 52.232-34, Payment by Electronic Funds Transfer-Qther than Central
> Contractor Registration; and

B. 52.232-36, Payment by Third Party.

\(8\) 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 (with the exception
of 52.232-33, Payment by Electronic Funds Transfer-Central Contractor
Registration) appropriate for each office and shall identify the
applicability by disbursing office and contract line item.

9