36522 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules

DEPARTMENT OF DEFENSE

GENERAL SERVICES

ADMINISTRATION

NATIONAL AERONAUTICS AND

SPACE ADMINISTRATION

48 CFR Parts 13, 16, 32 and 52

[FAR Case 91–118]

RIN 9000–AG49

Federal Acquisition Regulation;

Electronic Funds Transfer

AGENCIES: Department of Defense (DOD),

General Services Administration (GSA),

and National Aeronautics and Space

Administration (NASA).

ACTION: Proposed rule.

SUMMARY: The Civilian Agency

Acquisition Council and the Defense

Acquisition Regulations Council are

proposing to amend the Federal

Acquisition Regulation (FAR) to address

the use of electronic funds transfers

(EFT) for Federal contract payments and

to facilitate implementation of Public

Law 104–134 which mandates payment

by EFT in certain situations. This

regulatory action was not subject to

Office of Management and Budget

review under Executive Order 12866,

dated September 30, 1993. This is not a

major rule under 5 U.S.C. 804.

DATES: Comments should be submitted

on or before September 4, 1998 to be

considered in the formulation of a final

rule.

ADDRESSES: Interested parties should

submit written comments to: General

Services Administration, FAR

Secretariat (MVRS), 1800 F Street, NW,

Room 4035, Washington, DC 20405.

E-mail comments submitted over the

Internet should be addressed to:

farcase.91–118@gsa.gov.

Please cite FAR case 91–118 in all

correspondence related to this case.

FOR FURTHER INFORMATION CONTACT: The

FAR Secretariat, 1800 F Street, NW,

Room 4035, Washington, DC 20405,

(202) 501–4755 for information

pertaining to status or publication

schedules. For clarification of content,

contact Mr. Jeremy Olson, Procurement

Analyst, at (202) 501–3221. Please cite

FAR case 91–118.

SUPPLEMENTARY INFORMATION:

A. Background

An interim rule was published in the

Federal Register on August 29, 1996 (61

FR 45770) to implement subsection

(x)(1) of the Debt Collection

Improvement Act of 1996. The Debt

Collection Improvement Act is chapter

10 of the Omnibus Consolidated

Rescissions and Appropriations Act of

1996 (Public Law 104–134). Subsection

(x)(1) amends 31 U.S.C. 3332 to require,

beginning July 26, 1996, that all Federal

payments to a recipient who becomes

eligible for that type of payment shall be

made by electronic funds transfer. The

statute provides an exemption for

payments to certain recipients, and

stipulates that the Department of the

Treasury is responsible for issuing

regulations necessary for carrying out

the statute. On July 26, 1996, the

Department of the Treasury’s Financial

Management Service issued an interim

rule (61 FR 39254) which added Part

208 to Title 31, Code of Federal

Regulations, to provide regulations for

payments through EFT.

This proposed FAR rule differs

significantly from the interim FAR rule.

One of the main differences is the

location where the Government will

receive the contractor’s EFT

information. The interim rule clauses at

52.232–33, Mandatory Information for

Electronic Funds Transfer Payment, and

52.232–34, Optional Information for

Electronic Funds Transfer Payment,

require the contractor to submit that

information directly to the payment

office. The proposed rule revises these

two contract clauses with new language

at 52.232–33, Payment by Electronic

Funds Transfer (CCR), and 52.232–34,

Payment by Electronic Funds Transfer

(Non-CCR). The new clause at 52.232–

33 is prescribed when the payment

office uses the Central Contract

Registration (CCR) database as its source

of EFT information. The new clause at

52.232–34 is used when the contractor

submits EFT information to a source

other than the CCR database.

The proposed rule also recognizes

that agencies may use differing

administrative approaches in the

collection, tracking, and maintenance of

contractor EFT banking information.

The two most distinctly different

approaches are those that involve

obtaining contractor banking

information prior to award (as a

condition of award) as opposed to

obtaining that information after award

(as a normal contract performance duty).

The proposed rule also differs from

the interim rule by more rigidly

requiring payment by EFT except for

two categories of exceptions described

at FAR 32.1103–1: ‘‘non-banked

contractors’’ and ‘‘non-EFT system’’. In

contrast, the interim rule provides the

clause at 52.232–34 for optional

submission of EFT information by the

contractor for payments occurring on or

before January 1, 1999. The

determination whether a particular

payment must be made by EFT is made

by the payment official. In addition, the

proposed rule contains three new

clauses at 52.232–X1, Designation of

Office for Government Receipt of EFT

Information, 52.232–X2, Payment by

Third Party, and 52.232–X3, Multiple

Payment Arrangements. The clause at

52.232–X1 is prescribed when the

Government has designated an office

other than the payment office to receive

the contractor’s EFT information. The

clause at 52.232–X2 is prescribed when

payment on a written contract is made

by a third party on behalf of the

Government (e.g., Governmentwide

commercial purchase card). The clause

at 52.232–X3 is prescribed when the

contract or agreement provides for the

use of delivery orders and provides for

multiple types of payment

arrangements. The solicitation provision

at 52.232–X4, Submission of EFT

Information with Offer, is prescribed

when the Government has determined

that EFT banking information is to be

submitted prior to award, along with the

offer.

Public comments were received from

sixteen sources. All comments were

considered in the development of this

proposed rule.

B. Regulatory Flexibility Act

The rule may have a significant

economic impact on a substantial

number of small entities within the

meaning of the Regulatory Flexibility

Act, 5 U.S.C. 601 et seq. because the

majority of small entities will have

payment made by EFT under their

contracts. An Initial Regulatory

Flexibility Analysis (IRFA) was

performed in conjunction with the

interim rule published at 61 FR 45770,

August 29, 1996, and a revised Initial

Regulatory Flexibility Analysis has been

performed in conjunction with this

proposed rule. The analysis is

summarized as follows:

The rule will apply, prior to January 2,

1999, to all small businesses who enter into

contracts with the Federal Government

except for two categories: ‘‘Non-banked’’

contractors’’ and ‘‘Non-EFT system’’. ‘‘Nonbanked contractors’’ are those contractors

who do not have an account at a domestic

United States financial institution and do not

have an authorized payment agent. These

contractors are waived from the requirement

to be paid by EFT, upon submission of a

certificate. Contractors are also exempt from

receiving payment by EFT if agencies are

unable to make payment because of system

limitations. This ‘‘non-EFT system’’ category

consists of contracts (1) in which the

cognizant payment offices are not capable of

making payment through EFT; (2) that are

paid in other than U.S. dollars; (3) that are

classified; (4) that are awarded by a deployed
Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules 36523

contracting officer in the course of military

operations; and (5) where payments are

received by, or on behalf of, the contractor

outside the United States or Puerto Rico. On

and after January 2, 1999, however, payments

under all contracts, subject to implementing

regulations of the Secretary of the Treasury,

are required to be made by EFT. To date no

supporting data has been collected, therefore

there is no estimate available of the number

of small businesses that will be subject to the

rule.

A copy of the IRFA has been

submitted to the Chief Counsel for

Advocacy of the Small Business

Administration. A copy of the IRFA may

be obtained from the FAR Secretariat.

Comments from small entities

concerning the affected FAR subparts

shall also be considered in accordance

with Section 610 of the Act. Such

comments must be submitted separately

and cite FAR case 91–118 in

correspondence.

C. Paperwork Reduction Act

The Paperwork Reduction Act (Public

Law 96–511) applies because the

proposed rule contains information

collection requirements. The Office of

Management and Budget has approved

an information collection concerning

Electronic Funds Transfer (9000–0144)

through August 31, 1999, based on the

requirements in the interim rule for

contractors to provide EFT information

for each contract award. The proposed

rule decreases the collection

requirements since the rule permits

contractors to provide EFT information

to the CCR database on an annual basis,

rather than per contract award.

Annual Reporting Burden: Public

reporting burden for this collection of

information is estimated to average .5

hours per response, including the time

for reviewing instruction, searching

existing data sources, gathering and

maintaining the data needed, and

completing and reviewing the collection

of information.

The annual reporting burden is

estimated as follows: Respondents:

14,000; Responses per respondent: 10;

Total annual responses: 140,000;

Preparation hours per response: .5; and

Total response burden hours: 70,000.

D. Request for Comments Regarding

Paperwork Burden

Members of the public are invited to

comment on the recordkeeping and

information collection requirements and

estimates set forth above. Please send

comments to: Office of Information and

Regulatory Affairs, Office of

Management and Budget, Attention: Mr.

Peter N. Weiss, FAR Desk Officer, New

Executive Office Building, Room 10102,

725 17th Street, NW, Washington, DC

20503.

Also send a copy of any comments to

the FAR Secretariat at the address

shown under ADDRESSES. Please cite

FAR case 91–118, Electronic Funds

Transfer, in all correspondence related

to this estimate.

List of Subjects in 48 CFR Parts 13, 16,

32 and 52

Government procurement.

Dated: June 23, 1998.

Edward C. Loeb,

Director, Federal Acquisition Policy Division.

Therefore, it is proposed that 48 CFR

Parts 13, 16, 32 and 52 be amended as

set forth below:

1. The authority citation for 48 CFR

Parts 13, 16, 32 and 52 continues to read

as follows:

Authority: 40 U.S.C. 486(c); 10 U.S.C.

chapter 137; and 42 U.S.C. 2473(c).

PART 13—SIMPLIFIED ACQUISITION

PROCEDURES

2. Section 13.301 is amended in

paragraph (c)(3) by adding a sentence at

the end to read as follows:

13.301 Governmentwide commercial

purchase card.

* * * * *

(c) * * *

(3) * * * See 32.1105(d) for

instructions for use of the appropriate

clause when payment under a written

contract will be made through use of the

card.

3. Section 13.302–1 is amended by

revising paragraph (e) to read as follows:

13.302–1 General.

* * * * *

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

electronic funds transfer (EFT) is

required for payments except as

provided in 32.1103–1. See Subpart

32.11 for instructions for use of the

appropriate clause in purchase orders.

When obtaining verbal quotes, the

contracting officer shall inform the

quoter of the EFT clause that will be in

any resulting purchase order.

PART 16—TYPES OF CONTRACTS

4. Section 16.505 is amended in

paragraph (a) by redesignating

paragraph (a)(6)(viii) as (a)(6)(ix) and by

adding a new (a)(6)(viii) to read as

follows:

16.505 Ordering.

(a) * * *

(6) * * *

(viii) Method of payment and

payment office, if not specified in the

contract (see 32.1105(e)).

* * * * *

PART 32—CONTRACT FINANCING

5. Subpart 32.11 is revised to read as

follows:

Subpart 32.11—Electronic Funds

Transfer

Sec.

32.1100 Scope of subpart.

32.1101 Statutory requirements.

32.1102 Definitions.

32.1103 Policy.

32.1103–1 Applicability.

32.1103–2 Protection of EFT information.

32.1103–3 Assignment of claims.

32.1103–4 EFT mechanisms.

32.1103–5 Government inability to make

EFT payment.

32.1103–6 Payment information.

32.1103–7 EFT for contracts awarded from

solicitations issued prior to July 26,

1996.

32.1104 Payment by Governmentwide

commercial purchase card.

32.1105 Solicitation provision and contract

clauses.

Subpart 32.11—Electronic Fund

Transfer

32.1100 Scope of subpart.

This subpart provides policy and

procedures for providing financing and

delivery payments to contractors by

electronic funds transfer (EFT).

32.1101 Statutory requirements.

For contracts resulting from

solicitations issued on or after July 26,

1996, 31 U.S.C. 3332, as implemented

by Department of the Treasury

regulations, requires payment be made

by EFT in most situations (see 32.1103–

1). For all contracts, regardless of

solicitation date, 31 U.S.C. 3332

requires, subject to implementing

regulations of the Secretary of the

Treasury, that all payments made after

January 1, 1999, be made by EFT.

32.1102 Definitions.

EFT information means information

necessary for making a payment by

electronic funds transfer through

specified EFT mechanisms.

Electronic Funds Transfer (EFT)

means any transfer of funds, other than

a transaction originated by cash, check,

or similar paper instrument, that is

initiated through an electronic terminal,

telephone, computer, or magnetic tape,

for the purpose of ordering, instructing,

or authorizing a financial institution to

debit or credit an account. The term

includes Automated Clearing House

transfers, Federal Reserve Wire
36524 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules

transfers, transfers made at automatic

teller machines, and point-of-sale

terminals (e.g., Governmentwide

commercial purchase cards).

Governmentwide commercial

purchase card, as used in this part,

means a card that is similar in nature to

a commercial credit card that is used to

make financing and delivery payments

for supplies and services. The purchase

card is an EFT method and it may be

used as a means to meet the requirement

to pay by EFT, to the extent that

purchase card limits do not preclude

such payments.

Payment information means the

payment advice provided by the

Government to the contractor that

identifies what the payment is for, any

computations or adjustments made by

the Government, and any information

required by the Prompt Payment Act.

32.1103 Policy.

Except as authorized by this subpart

or otherwise authorized in accordance

with Treasury regulations at 31 CFR

208, all types of contract payments shall

be made by an EFT method.

32.1103–1 Applicability.

Pursuant to 31 U.S.C. 3332, payment

through EFT is the required method of

contract payment. However, certain

classes of contracts have been

authorized limited exceptions from the

requirement to pay by EFT.

(a) Non-Banked Contractors. Through

January 1, 1999, contractors that do not

have an account at a domestic United

States financial institution and do not

have an authorized payment agent are

waived from the requirement to be paid

by EFT, upon submission of a

certification (see paragraph (b) of the

EFT clauses at 52.232–33 and 52.232–

34).

(b) Non-EFT System. (1) If the

Government office making payment

under the contract is not capable of

making payment through EFT, payment

by other than EFT is authorized, subject

to the requirements of 31 CFR 208.3(c)

(see 32.1103–5).

(2) Except as provided in 32.1103–

4(b), if the payment is to be received by

or on behalf of the contractor, outside

the United States and Puerto Rico,

payment shall be made by other than

EFT.

(3) Except as provided in 32.1103–

4(b), if a contract is paid in other than

United States currency, payment shall

be made by other than EFT.

(4) If a contract is a classified contract

(see 4.401), the contract shall provide

for payment by other than EFT where

payment by EFT could compromise the

safeguarding of classified information or

national security, or where

arrangements for appropriate EFT

payments would be impractical due to

security considerations.

(5) If a contract is awarded by a

deployed contracting officer in the

course of military operations, including,

but not limited to, contingency

operations as defined in 10 U.S.C.

101(a)(13), or if a contract is awarded by

any contracting officer in the conduct of

emergency operations, such as

responses to natural disasters or

national or civil emergencies, the

contract shall provide for payment by

other than EFT where—

(i) EFT is not known to be possible;

or

(ii) EFT payment would not support

the objectives of the operation.

32.1103–2 Protection of EFT information.

The Government shall protect against

improper disclosure of contractors’ EFT

information.

32.1103–3 Assignment of claims.

The use of EFT payment methods is

not a substitute for a properly executed

assignment of claims in accordance with

Subpart 32.8. EFT information that

shows the ultimate recipient of the

transfer to be other than the contractor,

in the absence of a proper assignment of

claims, is considered to be incorrect

EFT information within the meaning of

the ‘‘Suspension of Payment’’

paragraphs of the EFT clauses at

52.232–33 and 52.232–34.

32.1103–4 EFT mechanisms.

(a) Domestic EFT. The EFT clauses at

52.232–33 and 52.232–34 are designed

for use with the domestic United States

banking system, using United States

currency, and only the specified

mechanisms of EFT (U.S. Automated

Clearing House, and Federal Reserve

Wire Transfer System). The head of the

agency shall not authorize the use of

any other EFT mechanism for domestic

EFT without the prior concurrence of

the office or agency responsible for

making payments.

(b) Non-Domestic EFT Mechanisms

and Non-United States Currency. For

payments received by or on behalf of the

contractor outside the United States and

Puerto Rico or for contracts paid in nonUnited States currency, payment shall

be made by other than EFT. However, if

the head of an agency determines that

a particular non-domestic EFT

mechanism is appropriate and safe for

use outside the domestic United States,

or for payments of non-United States

currency, the head of the agency may

authorize appropriate use of EFT. Any

such determination shall not be made

effective without the prior concurrence

of the office or agency responsible for

making payments.

32.1103–5 Government inability to make

EFT payment.

(a) If the Government payment office

is not capable of making payment by

EFT, the Government is relieved of the

requirement to pay by EFT if the agency

complies with 31 CFR 208.3(c), which

requires written notice and submittal of

an implementation plan to the

Department of the Treasury, Financial

Management Service.

(b) If the payment office does not have

or loses the ability to release payment

by EFT under a contract that requires

payment by EFT, to the extent

authorized by 31 CFR 208, the payment

office shall make necessary payments

pursuant to paragraph (a)(2) of the

clause at either 52.232–33 or 52.232–34

until such time as it can make EFT

payments.

32.1103–6 Payment information.

The payment or disbursing office

shall forward to the contractor available

payment information that is suitable for

transmission as of the date of release of

the electronic funds transfer instruction

to the Federal Reserve System.

32.1103–7 EFT for contracts awarded from

solicitations issued prior to July 26, 1996.

(a) Prior to January 2, 1999, payment

by EFT is not required on contracts

resulting from solicitations issued prior

to July 26, 1996. However, while not

statutorily required, it is nevertheless

Federal policy to maximize the use of

EFT. For contracts to be paid by

payment offices capable of making EFT

payments, the contracting officer is

encouraged to use EFT, whenever

reasonable, in any contract resulting

from a pre-July 26, 1996, solicitation for

which the contractor is willing to accept

payment by EFT. The contractor’s

willingness to accept payment by EFT

constitutes sufficient consideration for

modification of existing contracts to

incorporate EFT.

(b) Regardless of the solicitation date

of the contract, all payments to be made

after January 1, 1999, shall be made by

EFT, to the extent required by the

implementing regulations of the

Secretary of the Treasury, whether or

not an EFT clause is included in the

contract.

32.1104 Payment by Governmentwide

commercial purchase card.

A Governmentwide commercial

purchase card charge authorizes the

Third Party (e.g., financial institution)

that issued the purchase card to make

immediate payment to the contractor.
Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules 36525

That payment is reimbursed at a later

date by a subsequent payment by the

Government to the Third Party.

(a) The clause at 52.232–X2, Payment

by Third Party, governs when a

contractor submits a charge against the

purchase card for contract payment. The

clause provides that the contractor shall

make such payment requests by a charge

to a Government account with the Third

Party at the time the payment clause(s)

of the contract authorizes the contractor

to submit a request for payment and for

the amount due in accordance with the

terms of the contract. To the extent that

such a payment would otherwise be

approved, the charge against the

purchase card should not be disputed

when the charge is reported to the

Government by the Third Party. To the

extent that such payment would

otherwise not have been approved, an

authorized individual (see 1.603–3(b))

shall take action to remove the charge,

such as by disputing the charge with the

Third Party or by requesting that the

contractor credit the charge back to the

Government under the contract.

(b) Written contracts to be paid by

purchase card should include the clause

52.232–X2, Payment by Third Party, as

prescribed by 32.1105(d). However,

payment by a purchase card may also be

made under a contract that does not

contain the clause to the extent the

contractor agrees to accept that method

of payment.

(c) The clause at 52.232–X2, Payment

by Third Party, requires that the Third

Party and the particular purchase card

to be used be identified elsewhere in the

contract. The purchase card account

number should not be included in the

contract, but should be separately

provided.

32.1105 Solicitation provision and

contract clauses.

(a) Unless payment will be made

exclusively through use of the

Governmentwide commercial purchase

card or other third party payment

arrangement (see 13.301 and paragraph

(d) of this section) or an exception listed

in 32.1103–1(b)(2) through (5) applies—

(1) The contracting officer shall insert

the clause at 52.232–33, Payment by

Electronic Funds Transfer (CCR), in all

solicitations and contracts if the

payment office uses the CCR database as

its source of EFT information. The

contracting officer also shall insert this

clause if the payment office does not

currently have the ability to make

payment by EFT, but will use the CCR

database as its source of EFT

information when it begins making

payments by EFT.

(2)(i) The contracting officer shall

insert the clause at 52.232–34, Payment

by Electronic Funds Transfer (NonCCR), in all other solicitations and

contracts. The contracting officer also

shall insert this clause if the payment

office does not currently have the ability

to make payment by EFT, but will use

a source other than the CCR database for

EFT information when it begins making

payments by EFT.

(ii)(A) If permitted by agency

procedures, the contracting officer may

insert in paragraph (c)(1) of the clause,

a particular time after award, such as a

fixed number of days. However, in no

event shall the time period be later than

15 days prior to submission of the first

request for payment.

(B) If no agency procedures are

prescribed, the time period inserted in

paragraph (c)(1) of the clause shall be

‘‘no later than 15 days prior to

submission of the first request for

payment.’’

(b) If the head of the agency has made

a determination in accordance with

32.1103–4(b) to use a nondomestic EFT

mechanism, the contracting officer shall

insert in solicitations and contracts a

clause substantially the same as 52.232–

33 or 52.232–34 that clearly addresses

the non-domestic EFT mechanism.

(c) If EFT information is to be

submitted to other than the payment

office in accordance with agency

procedures, the contracting officer shall

insert in solicitations and contracts the

clause at 52.232–X1, Designation of

Office for Government Receipt of EFT

Information, or a clause substantially

the same as 52.232–X1 that clearly

informs the contractor of where to send

the EFT information.

(d) If payment under a written

contract will be made by a charge to a

Government account with a third party

such as a Governmentwide commercial

purchase card, then the contracting

officer shall insert the clause at 52.232–

X2, Payment by Third Party, in

solicitations and contracts. Payment by

a purchase card may also be made under

a contract that does not contain the

clause at 52.232–X2, to the extent the

contractor agrees to accept that method

of payment.

(e) If the contract or agreement

provides for the use of delivery orders,

and provides for a choice of payment

methods for individual orders, the

contracting officer shall insert, in the

solicitation and contract or agreement,

the clause at 52.232–X3, Multiple

Payment Arrangements, and, to the

extent they are applicable, the clauses

at—

(1) 52.232–33, Payment by Electronic

Funds Transfer (CCR);

(2) 52.232–34, Payment by Electronic

Funds Transfer (Non-CCR); and

(3) 52.232–X2, Payment by Third

Party.

(f) If more than one disbursing office

will make payment under a contract, the

contracting officer shall include the EFT

clause appropriate for each office and

shall identify the applicability by

disbursing office and contract line item.

(g) If the solicitation contains the

clause at 52.232–34, Payment by

Electronic Funds Transfer (Non-CCR),

and an offeror is required to submit EFT

information prior to award, the

contracting officer shall insert in the

solicitation the provision at 52.232–X4,

Submission of Electronic Funds

Transfer Information with Offer, or a

provision substantially the same.

PART 52—SOLICITATION PROVISIONS

AND CONTRACT CLAUSES

6. Section 52.212–4 is amended by

revising the clause date and the third

sentence in paragraph (i) to read as

follows:

52.212–4 Contract Terms and

Conditions—Commercial Items.

* * * * *

Contract Terms and Conditions—

Commercial Items (Date)

* * * * *

(i) Payment. * * * If the Government

makes payment by Electronic Funds

Transfer (EFT), see 52.212–5 for the

appropriate EFT clause. * * *

* * * * *

7. Section 52.212–5 is amended by

revising the clause date; and in

paragraph (b) by redesignating (b)(16)

and (17) as (19) and (20), respectively,

and by adding new paragraphs (16),

(17), and (18) to read as follows:

52.212–5 Contract Terms and Conditions

Required To Implement Statutes or

Executive Orders—Commercial Items.

* * * * *

Contract Terms and Conditions Required To

Implement Statutes or Executive Orders—

Commercial Items (Date)

* * * * *

(b) * * *

lll (16) 52.232–33, Payment by

Electronic Funds Transfer (CCR) (31 U.S.C.

3332).

lll (17) 52.232–34, Payment by

Electronic Funds Transfer (Non-CCR) (31

U.S.C. 3332).

lll (18) 52.232–X2, Payment by Third

Party (31 U.S.C. 3332).

* * * * *

8. Section 52.213–4 is amended by

revising the clause date; by

removingparagraph (a)(2)(vi) and

redesignating paragraphs (a)(2)(vii)

through (a)(2)(ix) as (a)(2)(vi) through
36526 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules

(a)(2)(viii); and by adding paragraphs

(b)(1)(ix) and (b)(1)(x) to read as follows:

52.213–4 Terms and Conditions—

Simplified Acquisitions (Other Than

Commercial Items).

Terms and Conditions—Simplified

Acquisition (Other Than Commercial Items)

(Date)

* * * * *

(b) * * *

(1) * * *

* * * * *

(ix) 52.232–33, Payment by Electronic

Funds Transfer (CCR) (Date). (Applies when

payment will be made by EFT and the

payment office uses the Central Contractor

Registration database as its source of EFT

information.)

(x) 52.232–34, Payment by Electronic

Funds Transfer (Non-CCR) (Date). (Applies

when payment will be made by EFT and the

payment office does not use the Central

Contractor Registration database as its source

of EFT information.)

* * * * *

9. Sections 52.232–33 and 52.232–34

are revised and new sections 52.232-X1

through 52.232–X4 are added to read as

follows:

52.232–33 Payment by Electronic Funds

Transfer (CCR).

As prescribed in 32.1105(a)(1), insert

the following clause:

Payment by Electronic Funds Transfer (CCR)

(Date)

(a) Method of payment. (1) All payments by

the Government under this contract shall be

made by electronic funds transfer (EFT),

except as provided in paragraph (a)(2) or (b)

of this clause. As used in this clause, the

term EFT refers to the funds transfer and may

also include the payment information

transfer.

(2) In the event the Government is unable

to release one or more payments by EFT, the

Contractor agrees to either—

(i) Accept payment by check or some other

mutually agreeable method of payment; or

(ii) Request the Government to extend the

payment due date until such time as the

Government can make payment by EFT (but

see paragraph (e) of this clause).

(b) Alternative contractor certification. If

the Contractor certifies in writing, as part of

its registration with the Central Contractor

Registration (CCR) database (FAR 4.503), that

it does not have an account with a financial

institution and does not have an authorized

payment agent, payment shall be made by

check to the remittance address contained in

the CCR database. All contractor

certifications will expire on January 1, 1999.

(c) Contractor’s EFT information. Except as

provided in paragraph (b) of this clause, the

Government shall make payment to the

Contractor using the EFT information

contained in the CCR database. In the event

that the EFT information changes, the

Contractor shall be responsible for providing

the updated information to the CCR database.

(d) Mechanisms for EFT payment. The

Government may make payment by EFT

through either an Automated Clearing House

(ACH) subject to the banking laws of the

United States or the Federal Reserve Wire

Transfer System.

(e) Suspension of Payment. If the

Contractor’s EFT information in the CCR

database is incorrect and the Contractor has

not certified under paragraph (b) of this

clause, then the Government need not make

payment to the Contractor under this contract

until correct EFT information or certification

is entered into the CCR database; and any

invoice or contract financing request shall be

deemed not to be a proper invoice for the

purpose of prompt payment under this

contract. The prompt payment terms of the

contract regarding notice of an improper

invoice and delays in accrual of interest

penalties apply.

(f) Contractor EFT arrangements. If the

Contractor has identified multiple payment

receiving points (i.e., more than one

remittance address and/or EFT information

set) in the CCR database, and the Contractor

has not notified the Government of the

payment receiving point applicable to this

contract, the Government shall make

payment to the first payment receiving point

(EFT information set or remittance address as

applicable) listed in the CCR database.

(g) Liability for uncompleted or erroneous

transfers. (1) If an uncompleted or erroneous

transfer occurs because the Government

failed to use the Contractor’s EFT

information in the correct manner, the

Government remains responsible for—

(i) Making a correct payment;

(ii) Paying any prompt payment penalty

due; and

(iii) Recovering any erroneously directed

funds.

(2) If an uncompleted or erroneous transfer

occurs because the Contractor’s EFT

information was incorrect, or was revised

within 30 days of Government release of the

EFT payment transaction instruction to the

Federal Reserve System, and—

(i) If the funds are no longer under the

control of the payment office, the

Government is deemed to have made

payment and the Contractor is responsible for

recovery of any erroneously directed funds;

or

(ii) If the funds remain under the control

of the payment office, the Government shall

not make payment, and the provisions of

paragraph (e) shall apply.

(h) EFT and prompt payment. A payment

shall be deemed to have been made in a

timely manner in accordance with the

prompt payment terms of this contract if, in

the EFT payment transaction instruction

released to the Federal Reserve System, the

date specified for settlement of the payment

is on or before the prompt payment due date,

provided the specified payment date is a

valid date under the rules of the Federal

Reserve System.

(i) EFT and assignment of claims. If the

Contractor assigns the proceeds of this

contract as provided for in the assignment of

claims terms of this contract, the Contractor

shall require as a condition of any such

assignment, that the assignee shall register in

the CCR database and shall be paid by EFT

in accordance with the terms of this clause.

In all respects, the requirements of this

clause shall apply to the assignee as if it were

the Contractor. EFT information that shows

the ultimate recipient of the transfer to be

other than the Contractor, in the absence of

a proper assignment of claims acceptable to

the Government, is incorrect EFT information

within the meaning of paragraph (e) of this

clause.

(j) Liability for change of EFT information

by financial agent. The Government is not

liable for errors resulting from changes to

EFT information made by the Contractor’s

financial agent.

(k) Payment information. The payment or

disbursing office shall forward to the

Contractor available payment information

that is suitable for transmission as of the date

of release of the electronic funds transfer

instruction to the Federal Reserve System.

The Government may request the Contractor

to designate a desired format and method(s)

for delivery of payment information from a

list of formats and methods the payment

office is capable of executing. However, the

Government does not guarantee that any

particular format or method of delivery is

available at any particular payment office

and retains the latitude to use the format and

delivery method most convenient to the

Government. If the Contractor has certified in

accordance with paragraph (b) of this clause

or if the Government otherwise makes

payment by check in accordance with

paragraph (a) of this clause, the Government

shall mail the payment information to the

remittance address contained in the CCR

database.

(End of clause)

52.232–34 Payment by Electronic Funds

Transfer (Non-CCR).

As prescribed in 32.1105(a)(2), insert

the following clause:

Payment by Electronic Funds Transfer (NonCCR) (Date)

(a) Method of Payment. (1) All payments by

the Government under this contract shall be

made by electronic funds transfer (EFT),

except as provided in paragraph (a)(2) or (b)

of this clause. As used in this clause, the

term EFT refers to the funds transfer and may

also include the payment information

transfer.

(2) In the event the Government is unable

to release one or more payments by EFT, the

Contractor agrees to either—

(i) Accept payment by check or some other

mutually agreeable method of payment; or

(ii) Request the Government to extend the

payment due dates until such time as the

Government makes payment by EFT (but see

paragraph (e) of this clause).

(b) Alternative Contractor Certification. If

the Contractor certifies in writing to the

designated office (see paragraph (c)(1) of this

clause) that is does not have an account with

a financial institution and does not have an

authorized payment agent, payment shall be

made by check to the remittance address

specified in this contract and the Contractor

need not provide EFT information. All

contractor certifications will expire on

January 1, 1999. For any payments to be

made after January 1, 1999, the Contractor
Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules 36527

shall provide EFT information as described

in paragraph (k) of this clause and payment

shall be made by EFT.

(c) Mandatory submission of Contractor’s

EFT information. (1) Except as provided in

paragraph (b) of this clause, the Contractor is

required, as a condition to any invoice or

contract financing payment under this

contract, to provide the Government with the

information required to make payment by

EFT (see paragraph (k) of this clause). The

Contractor shall provide this information

directly to the office designated in this

contract to receive that information

(hereafter: ‘‘designated office’’) by [Insert

date, days after award, or days before first

request as prescribed by Agency head; if not

prescribed, insert ‘‘no later than 15 days

prior to submission of the first request for

payment’’]. If not otherwise specified in this

contract, the payment office is the designated

office for receipt of the Contractor’s EFT

information. If more than one designated

office is named for the contract, the

Contractor shall provide a separate notice to

each office. In the event that the EFT

information changes, the Contractor shall be

responsible for providing the updated

information to the designated office(s).

(2) If the Contractor provides EFT

information applicable to multiple contracts,

the Contractor shall specifically state the

applicability of this EFT information in terms

acceptable to the designated office. However,

EFT information supplied to a designated

office shall be applicable only to contracts

which identify that designated office as the

office to receive EFT information for that

contract.

(d) Mechanisms for EFT Payment. The

Government may make payment by EFT

through either an Automated Clearing House

(ACH) subject to the banking laws of the

United States or the Federal Reserve Wire

Transfer System.

(e) Suspension of Payment. (1) The

Government is not required to make any

payment under this contract until after

receipt, by the designated office, of the

correct EFT payment information from the

Contractor or a certificate submitted in

accordance with paragraph (b) of this clause.

Until receipt of the correct EFT information

or certificate, any invoice or contract

financing request shall be deemed not to be

a proper invoice for the purpose of prompt

payment under this contract. The prompt

payment terms of the contract regarding

notice of an improper invoice and delays in

accrual of interest penalties apply.

(2) If the EFT information changes after

submission of correct EFT information, the

Government shall begin using the changed

EFT information no later than 30 days after

its receipt to the extent payment is made by

EFT. However, the Contractor may request

that no further payments be made until the

updated EFT information is implemented by

the payment office. If such suspension would

result in a late payment under the prompt

payment terms of this contract, the

Contractor’s request for suspension shall

extend the due date for payment by the

number of days of the suspension.

(f) Liability for uncompleted or erroneous

transfers. (1) If an uncompleted or erroneous

transfer occurs because the Government

failed to use the Contractor’s EFT

information in the correct manner, the

Government remains responsible for—

(i) Making a correct payment;

(ii) Paying any prompt payment penalty

due; and

(iii) Recovering any erroneously directed

funds.

(2) If an uncompleted or erroneous transfer

occurs because the Contractor’s EFT

information was incorrect, or was revised

within 30 days of Government release of the

EFT payment transaction instruction to the

Federal Reserve System, and—

(i) If the funds are no longer under the

control of the payment office, the

Government is deemed to have made

payment and the Contractor is responsible for

recovery of any erroneously directed funds;

or

(ii) If the funds remain under the control

of the payment office, the Government shall

not make payment and the provisions of

paragraph (e) shall apply.

(g) EFT and prompt payment. A payment

shall be deemed to have been made in a

timely manner in accordance with the

prompt payment terms of this contract if, in

the EFT payment transaction instruction

released to the Federal Reserve System, the

date specified for settlement of the payment

is on or before the prompt payment due date,

provided the specified payment date is a

valid date under the rules of the Federal

Reserve System.

(h) EFT and assignment of claims. If the

Contractor assigns the proceeds of this

contract as provided for in the assignment of

claims terms of this contract, the Contractor

shall require as a condition of any such

assignment, that the assignee shall provide

the EFT information required by paragraph

(k) of this clause to the designated office, and

shall be paid by EFT in accordance with the

terms of this clause. In all respects, the

requirements of this clause shall apply to the

assignee as if it were the Contractor. EFT

information that shows the ultimate recipient

of the transfer to be other than the Contractor,

in the absence of a proper assignment of

claims acceptable to the Government, is

incorrect EFT information within the

meaning of paragraph (e) of this clause.

(i) Liability for change of EFT information

by financial agent. The Government is not

liable for errors resulting from changes to

EFT information provided by the Contractor’s

financial agent.

(j) Payment information. The payment or

disbursing office shall forward to the

Contractor available payment information

that is suitable for transmission as of the date

of release of the electronic funds transfer

instruction to the Federal Reserve System.

The Government may request the Contractor

to designate a desired format and method(s)

for delivery of payment information from a

list of formats and methods the payment

office is capable of executing. However, the

Government does not guarantee that any

particular format or method of delivery is

available at any particular payment office

and retains the latitude to use the format and

delivery method most convenient to the

Government. If the Contractor has certified in

accordance with paragraph (b) of this clause

or if the Government otherwise makes

payment by check in accordance with

paragraph (a) of this clause, the Government

shall mail the payment information to the

remittance address in the contract.

(k) EFT Information. The Contractor shall

provide the following information to the

designated office. The Contractor may supply

this data for this or multiple contracts (see

paragraph (c) of this clause). The Contractor

shall designate a single financial agent per

contract capable of receiving and processing

the EFT using the EFT methods described in

paragraph (d) of this clause.

(1) The contract number (or other

procurement identification number).

(2) The Contractor’s name and remittance

address, as stated in the contract(s).

(3) The signature (manual or electronic, as

appropriate), title, and telephone number of

the Contractor official authorized to provide

this information.

(4) The name, address, and 9-digit Routing

Transit Number of the Contractor’s financial

agent.

(5) The Contractor’s account number and

the type of account (checking, saving, or

lockbox).

(6) The Federal Reserve Wire Transfer

System telegraphic abbreviation of the

Contractor’s financial agent.

(7) If the Contractor’s financial agent is not

directly on-line to the Federal Reserve Wire

Transfer System and, therefore, not the

receiver of the wire transfer payment, the

Contractor shall also provide the name,

address, telegraphic abbreviation, and 9-digit

Routing Transit Number of the correspondent

financial institution receiving the wire

transfer payment.

(End of clause)

52.232–X1 Designation of Office for

Government Receipt of EFT Information.

As prescribed in 32.1105(c) insert the

following clause:

Designation of Office for Government

Receipt of EFT Information (Date)

(a) As provided for in paragraph (c) of the

clause at 52.232–34, Payment by Electronic

Funds Transfer (Non-CCR), the Government

has designated the following office as the

office to receive the Contractor’s EFT

information, in lieu of the payment office of

this contract.

(b) The Contractor shall send all EFT

information, and any changes of EFT

information to the office designated in

paragraph (c) of this clause. The Contractor

shall not send EFT information to the

payment office, or any other office than that

designated in paragraph (c). The Government

need not use any EFT information sent to any

office other than that designated in paragraph

(c).

(c) Designated Office:

Name: lllllllllllllllll

Mailing Address: llllllllllll

lllllllllllllllllllll

lllllllllllllllllllll

Telephone Number: lllllllllll

Person to Contact: llllllllllll

Electronic Address: lllllllllll
36528 Federal Register / Vol. 63, No. 128 / Monday, July 6, 1998 / Proposed Rules

(End of clause)

52.232–X2 Payment by Third Party.

As prescribed in 32.1105(d), insert the

following clause:

Payment by Third Party (Date)

(a) General. The Contractor agrees to accept

payments due under this contract, through

payment by a Third Party in lieu of payment

directly from the Government, in accordance

with the terms of this clause. The Third Party

and the particular Governmentwide

commercial purchase card to be used are

identified elsewhere in this contract.

(b) Contractor payment request. In

accordance with those clauses of this

contract that authorize the Contractor to

submit invoices, contract financing requests,

other payment requests, or as provided in

other clauses providing for payment to the

Contractor, the Contractor shall make such

payment requests through a charge to the

Government account with the Third Party, at

the time and for the amount due in

accordance with the terms of this contract.

(c) Payment. The Contractor and the Third

Party shall agree that payments due under

this contract shall be made upon submittal of

payment requests to the Third Party in

accordance with the terms and conditions of

an agreement between the Contractor, the

Contractor’s financial agent (if any), and the

Third Party and its agents (if any). No

payment shall be due the Contractor until

such agreement is made. Payments made or

due by the Third Party under this clause are

not payments made by the Government and

are not subject to the Prompt Payment Act or

any implementation thereof in this contract.

(d) Documentation. Documentation of each

charge against the Government’s account

shall be provided to the Contracting Officer

upon request.

(e) Assignment of Claims. Notwithstanding

any other provision of this contract, if any

payment is made under this clause, then no

payment under this contract shall be

assigned under the provisions of the

Assignment of Claims terms of this contract

or the Assignment of Claims Act of 1940, as

amended, 31 U.S.C. 3727, 41 U.S.C. 15.

(f) Other Payment Terms. The other

payment terms of this contract shall govern

the content and submission of payment

requests. If any clause requires information

or documents in or with the payment request,

that is not provided for in the Third Party

agreement referenced in paragraph (c) of this

clause, the Contractor shall obtain

instructions from the Contracting Officer

before submitting such a payment request.

(End of clause)

53.232–X3 Multiple Payment

Arrangements.

As prescribed in 32.1105(e), insert the

following clause:

Multiple Payment Arrangements (Date)

This contract or agreement provides for

payments to the Contractor through several

alternative methods. The applicability of

specific methods of payment and the

designation of the payment office(s) are

either stated—

(a) Elsewhere in this contract or agreement;

or

(b) In individual orders placed under this

contract or agreement.

(End of clause)

52.232–X4 Submission of Electronic

Funds Transfer Information with Offer.

As prescribed in 32.1105(g), insert the

following provision:

Submission of Electronic Funds Transfer

Information With Offer (Date)

The offeror shall provide, with its offer, the

following information that is required to

make payment by electronic funds transfer

(EFT) under any contract that results from

this solicitation. This submission satisfies the

requirement to provide EFT information

under paragraphs (c)(1) and (k) of the clause

at 52.232–34, Payment By Electronic Funds

Transfer (Non-CCR).

(1) The solicitation number (or other

procurement identification number).

(2) The offeror’s name and remittance

address, as stated in the offer.

(3) The signature (manual or electronic, as

appropriate), title, and telephone number of

the offeror’s official authorized to provide

this information.

(4) The name, address, and 9-digit Routing

Transit Number of the offeror’s financial

agent.

(5) The offeror’s account number and the

type of account (checking, saving, or

lockbox).

(6) The Federal Reserve Wire Transfer

System telegraphic abbreviation of the

offeror’s financial agent.

(7) If the offeror’s financial agent is not

directly on-line to the Federal Reserve Wire

Transfer System and, therefore, not the

receiver of the wire transfer payment, the

offeror shall also provide the name, address,

telegraphic abbreviation, and 9-digit Routing

Transit Number of the correspondent

financial institution receiving the wire

transfer payment.

(End of provision)

[FR Doc. 98–17148 Filed 7–2–98; 8:45 am]

BILLING CODE 6820–EP–P