52.232-25 Prompt Payment.

As prescribed in 32.908(c), insert the following clause:

Prompt Payment (Jan 2017)

Notwithstanding any other payment clause in this contract, the Government will make invoice

payments under the terms and conditions specified in this clause. The Government considers

payment as being made on the day a check is dated or the date of an electronic funds transfer (EFT).

Definitions of pertinent terms are set forth in sections 2.101, 32.001, and 32.902 of the Federal

Acquisition Regulation. All days referred to in this clause are calendar days, unless otherwise

specified. (However, see paragraph (a)(4) of this clause concerning payments due on Saturdays,

Sundays, and legal holidays.)

(a) Invoice payments-

(1) Due date.

(i) Except as indicated in paragraphs (a)(2) and (c) of this clause, the due date for making invoice

payments by the designated payment office is the later of the following two events:

(A) The 30 thday after the designated billing office receives a proper invoice from the Contractor

(except as provided in paragraph (a)(1)(ii) of this clause).

(B) The 30 thday after Government acceptance of supplies delivered or services performed. For a

final invoice, when the payment amount is subject to contract settlement actions, acceptance is

deemed to occur on the effective date of the contract settlement.

(ii) If the designated billing office fails to annotate the invoice with the actual date of receipt at the

time of receipt, the invoice payment due date is the 30 thday after the date of the Contractor’s

invoice, provided the designated billing office receives a proper invoice and there is no disagreement

over quantity, quality, or Contractor compliance with contract requirements.

(2) Certain food products and other payments.

(i) Due dates on Contractor invoices for meat, meat food products, or fish; perishable agricultural

commodities; and dairy products, edible fats or oils, and food products prepared from edible fats or

oils are-

(A) For meat or meat food products, as defined in section 2(a)(3) of the Packers and Stockyard Act

of1921 (7 U.S.C.182(3)), and as further defined in Pub.L.98-181, including any edible fresh or frozen

poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product,

as close as possible to, but not later than, the 7 thday after product delivery.

(B) For fresh or frozen fish, as defined in section 204(3) of the Fish and Seafood Promotion Act

of1986 (16 U.S.C.4003(3)), as close as possible to, but not later than, the 7 thday after product

delivery.

(C) For perishable agricultural commodities, as defined in section 1(4) of the Perishable Agricultural
Commodities Act of1930 (7 U.S.C.499a(4)), as close as possible to, but not later than, the 10 thday

after product delivery, unless another date is specified in the contract.

(D) For dairy products, as defined in section 111(e) of the Dairy Production Stabilization Act of1983

(7 U.S.C.4502(e)), edible fats or oils, and food products prepared from edible fats or oils, as close as

possible to, but not later than, the 10 thday after the date on which a proper invoice has been

received. Liquid milk, cheese, certain processed cheese products, butter, yogurt, ice cream,

mayonnaise, salad dressings, and other similar products, fall within this classification. Nothing in the

Act limits this classification to refrigerated products. When questions arise regarding the proper

classification of a specific product, prevailing industry practices will be followed in specifying a

contract payment due date. The burden of proof that a classification of a specific product is, in fact,

prevailing industry practice is upon the Contractor making the representation.

(ii) If the contract does not require submission of an invoice for payment (e.g., periodic lease

payments), the due date will be as specified in the contract.

(3) Contractor's invoice. The Contractor shall prepare and submit invoices to the designated billing

office specified in the contract. A proper invoice must include the items listed in paragraphs (a)(3)(i)

through (a)(3)(x) of this clause. If the invoice does not comply with these requirements, the

designated billing office will return it within 7 days after receipt (3 days for meat, meat food

products, or fish; 5 days for perishable agricultural commodities, dairy products, edible fats or oils,

and food products prepared from edible fats or oils), with the reasons why it is not a proper invoice.

The Government will take into account untimely notification when computing any interest penalty

owed the Contractor.

(i) Name and address of the Contractor.

(ii) Invoice date and invoice number. (The Contractor should date invoices as close as possible to the

date of the mailing or transmission.)

(iii) Contract number or other authorization for supplies delivered or services performed (including

order number and line item number).

(iv) Description, quantity, unit of measure, unit price, and extended price of supplies delivered or

services performed.

(v) Shipping and payment terms (e.g., shipment number and date of shipment, discount for prompt

payment terms). Bill of lading number and weight of shipment will be shown for shipments on

Government bills of lading.

(vi) Name and address of Contractor official to whom payment is to be sent (must be the same as

that in the contract or in a proper notice of assignment).

(vii) Name (where practicable), title, phone number, and mailing address of person to notify in the

event of a defective invoice.

(viii) Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice only

if required elsewhere in this contract.

(ix) Electronic funds transfer (EFT) banking information.

(A) The Contractor shall include EFT banking information on the invoice only if required elsewhere

in this contract.
(B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a

proper invoice, the Contractor shall have submitted correct EFT banking information in accordance

with the applicable solicitation provision (e.g., 52.232-38, Submission of Electronic Funds Transfer

Information with Offer), contract clause (e.g., 52.232-33, Payment by Electronic Funds TransferSystem for Award Management, or 52.232-34, Payment by Electronic Funds Transfer-Other Than

System for Award Management), or applicable agency procedures.

(C) EFT banking information is not required if the Government waived the requirement to pay by

EFT.

(x) Any other information or documentation required by the contract (e.g., evidence of shipment).

(4) Interest penalty. The designated payment office will pay an interest penalty automatically,

without request from the Contractor, if payment is not made by the due date and the conditions

listed in paragraphs (a)(4)(i) through (a)(4)(iii) of this clause are met, if applicable. However, when

the due date falls on a Saturday, Sunday, or legal holiday, the designated payment office may make

payment on the following working day without incurring a late payment interest penalty.

(i) The designated billing office received a proper invoice.

(ii) The Government processed a receiving report or other Government documentation authorizing

payment, and there was no disagreement over quantity, quality, or Contractor compliance with any

contract term or condition.

(iii) In the case of a final invoice for any balance of funds due the Contractor for supplies delivered

or services performed, the amount was not subject to further contract settlement actions between

the Government and the Contractor.

(5) Computing penalty amount. The Government will compute the interest penalty in accordance

with the Office of Management and Budget prompt payment regulations at 5 CFR Part 1315.

(i) For the sole purpose of computing an interest penalty that might be due the Contractor,

Government acceptance is deemed to occur constructively on the 7 thday (unless otherwise specified

in this contract) after the Contractor delivers the supplies or performs the services in accordance

with the terms and conditions of the contract, unless there is a disagreement over quantity, quality,

or Contractor compliance with a contract provision. If actual acceptance occurs within the

constructive acceptance period, the Government will base the determination of an interest penalty

on the actual date of acceptance. The constructive acceptance requirement does not, however,

compel Government officials to accept supplies or services, perform contract administration

functions, or make payment prior to fulfilling their responsibilities.

(ii) The prompt payment regulations at 5 CFR1315.10(c) do not require the Government to pay

interest penalties if payment delays are due to disagreement between the Government and the

Contractor over the payment amount or other issues involving contract compliance, or on amounts

temporarily withheld or retained in accordance with the terms of the contract. The Government and

the Contractor shall resolve claims involving disputes and any interest that may be payable in

accordance with the clause at FAR 52.233-1, Disputes.

(6) Discounts for prompt payment. The designated payment office will pay an interest penalty

automatically, without request from the Contractor, if the Government takes a discount for prompt

payment improperly. The Government will calculate the interest penalty in accordance with the

prompt payment regulations at 5 CFR Part 1315.
(7) Additional interest penalty.

(i) The designated payment office will pay a penalty amount, calculated in accordance with the

prompt payment regulations at 5 CFR Part 1315 in addition to the interest penalty amount only if-

(A) The Government owes an interest penalty of $1 or more;

(B) The designated payment office does not pay the interest penalty within 10 days after the date the

invoice amount is paid; and

(C) The Contractor makes a written demand to the designated payment office for additional penalty

payment, in accordance with paragraph (a)(7)(ii) of this clause, postmarked not later than 40 days

after the invoice amount is paid.

(ii)

(A) The Contractor shall support written demands for additional penalty payments with the following

data. The Government will not request any additional data. The Contractor shall-

(1) Specifically assert that late payment interest is due under a specific invoice, and request

payment of all overdue late payment interest penalty and such additional penalty as may be

required;

(2) Attach a copy of the invoice on which the unpaid late payment interest is due; and

(3) State that payment of the principal has been received, including the date of receipt.

(B) If there is no postmark or the postmark is illegible-

(1) The designated payment office that receives the demand will annotate it with the date of receipt,

provided the demand is received on or before the 40th day after payment was made; or

(2) If the designated payment office fails to make the required annotation, the Government will

determine the demand’s validity based on the date the Contractor has placed on the demand,

provided such date is no later than the 40th day after payment was made.

(iii) The additional penalty does not apply to payments regulated by other Government regulations

(e.g., payments under utility contracts subject to tariffs and regulation).

(b) Contract financing payment. If this contract provides for contract financing, the Government will

make contract financing payments in accordance with the applicable contract financing clause.

(c) Fast payment procedure due dates. If this contract contains the clause at 52.213-1, Fast Payment

Procedure, payments will be made within 15 days after the date of receipt of the invoice.

(d) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice

payment or that the Government has otherwise overpaid on a contract financing or invoice payment,

the Contractor shall-

(1) Remit the overpayment amount to the payment office cited in the contract along with a

description of the overpayment including the-

(i) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation
errors, date(s) of overpayment);

(ii) Affected contract number and delivery order number if applicable;

(iii) Affected line item or subline item, if applicable; and

(iv) Contractor point of contact.

(2) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

(End of clause)

Alternate I (Feb 2002). As prescribed in 32.908 (c)(3), add the following paragraph (e) to the basic

clause:

(e) Invoices for interim payments. For interim payments under this cost-reimbursement contract for

services-

(1) Paragraphs (a)(2), (a)(3), (a)(4)(ii), (a)(4)(iii), and (a)(5)(i) do not apply;

(2) For purposes of computing late payment interest penalties that may apply, the due date for

payment is the 30 thday after the designated billing office receives a proper invoice; and

(3) The contractor shall submit invoices for interim payments in accordance with paragraph (a) of

FAR 52.216-7, Allowable Cost and Payment. If the invoice does not comply with contract

requirements, it will be returned within 7 days after the date the designated billing office received

the invoice.

Parent topic: 52.232 [Reserved]