[Federal Register Volume 63, Number 128 (Monday, July 6, 1998)]
[Proposed Rules]
[Pages 36522-36528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17148]



[[Page 36521]]

_______________________________________________________________________

Part III

Department of Defense

General Services Administration

National Aeronautics and Space Administration
_______________________________________________________________________



48 CFR Parts 13, 16, 32 and 52



Federal Acquisition Regulation; Electronic Funds Transfer; Proposed 
Rule

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

[[Page 36522]]



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: 
[email protected].
    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''. ``Non-banked 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

[[Page 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

[[Page 36524]]

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 non-United 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.

[[Page 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 (Non-CCR), 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) * * *
    ______ (16) 52.232-33, Payment by Electronic Funds Transfer 
(CCR) (31 U.S.C. 3332).
    ______ (17) 52.232-34, Payment by Electronic Funds Transfer 
(Non-CCR) (31 U.S.C. 3332).
    ______ (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

[[Page 36526]]

(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 (Non-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 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

[[Page 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:------------------------------------------------------------------

Mailing Address:-------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

Telephone Number:------------------------------------------------------

Person to Contact:-----------------------------------------------------

Electronic Address:----------------------------------------------------


[[Page 36528]]

-----------------------------------------------------------------------
(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