[Federal Register Volume 64, Number 42 (Thursday, March 4, 1999)]
[Rules and Regulations]
[Pages 10538-10544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-5206]


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DEPARTMENT OF DEFENSE

GENERAL SERVICES ADMINISTRATION

NATIONAL AERONAUTICS AND SPACE ADMINISTRATION

48 CFR Parts 13, 16, 32, and 52

[FAC 97-11; FAR Case 91-118; Item IV]
RIN 9000-AG49


Federal Acquisition Regulation; Electronic Funds Transfer

AGENCIES: Department of Defense (DoD), General Services Administration 
(GSA), and National Aeronautics and Space Administration (NASA).

ACTION: Final rule.

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SUMMARY: The Civilian Agency Acquisition Council and the Defense 
Acquisition Regulations Council have agreed to adopt as final, with 
changes, the interim rule published in Federal Acquisition Circular 90-
42 on August 29, 1996. The rule amends the Federal Acquisition 
Regulation (FAR) to address the use of electronic funds transfers (EFT) 
for Federal contract payments made after January 1, 1999, and to

[[Page 10539]]

facilitate implementation of Public Law 104-134 which mandates payment 
by EFT in most situations.

EFFECTIVE DATE: May 3, 1999.

FOR FURTHER INFORMATION CONTACT: The FAR Secretariat, Room 4035, GS 
Building, Washington, DC, 20405, (202) 501-4755, for information 
pertaining to status or publication schedules. For clarification of 
content, contact Mr. Jeremy Olson, at (202) 501-0692. Please cite FAC 
97-11, FAR case 91-118.

SUPPLEMENTARY INFORMATION:

A. Background

    Subsection 31001(x)(1) of the Debt Collection Improvement Act of 
1996 (Pub. L. 104-134) amends 31 U.S.C. 3332 to require, subject to the 
authority of the Secretary of the Treasury to grant waivers, that--
    1. Beginning July 26, 1996, payments to newly eligible recipients 
must be made by EFT unless the recipient of those payments certifies 
that the recipient does not have an account with a financial 
institution or an authorized payment agent; and
    2. Beginning January 2, 1999, all Federal payments (other than 
payments under the Internal Revenue Code of 1986) shall be made by 
electronic funds transfer (EFT).
    Under this statute, the Department of the Treasury is responsible 
for issuing implementing regulations. Treasury issued an interim rule 
which was published at 61 FR 39254, July 26, 1996. The interim rule 
added Part 208 to Title 31, Code of Federal Regulations, and addressed 
the time period from July 26, 1996, through January 1, 1999 (``phase 
one''). Treasury published a final rule at 63 FR 51490, September 25, 
1998 that provides guidance at 31 CFR 208 regarding compliance with 
Pub. L. 104-134's EFT requirement and establishes the circumstances 
under which waivers are available for the time period beginning January 
2, 1999 (``phase two'').
    An interim FAR rule was published at 61 FR 45770, August 29, 1996. 
A proposed FAR rule, which differed significantly from the interim 
rule, was published at 63 FR 36522, July 6, 1998. Public comments on 
the proposed rule were received from 17 sources. All comments were 
considered in developing the final rule.
    This final rule differs from the proposed rule to--
    (1) Reflect the analysis and disposition of public comments;
    (2) Implement applicable provisions of Treasury's final rule;
    (3) Remove references to the ``phase one'' time period, which ended 
January 1, 1999;
    (4) Add a new contract clause at 52.232-38, Submission of 
Electronic Funds Transfer Information with Offer;
    (5) Address the situation when an offeror is required to submit EFT 
information prior to award; and
    (6) Make editorial changes.
    This regulatory action was not subject to Office of Management and 
Budget review under Executive Order 12866, dated September 30, 1993, 
and is not a major rule under 5 U.S.C. 804.

B. Regulatory Flexibility Act

    The changes may have a significant economic impact on a substantial 
number of small entities within the meaning of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., because the majority of small 
entities will have payment made by EFT under their contracts. An 
Initial Regulatory Flexibility Analysis (IRFA) was performed in 
conjunction with the interim rule published at 61 FR 45770, August 29, 
1996, and a revised IRFA was performed in conjunction with the proposed 
rule published at 63 FR 36522, July 6, 1998.
    A Final Regulatory Flexibility Analysis (FRFA) has been performed 
and submitted to the Chief Counsel for Advocacy of the Small Business 
Administration. A copy of the FRFA may be obtained from the FAR 
Secretariat. The FRFA is summarized as follows:

    The objective of the rule is to revise current procedures for 
the use of electronic funds transfers for Federal contract payments 
to comply with Subsection 31001(x)(1) of the Debt Collection 
Improvement Act of 1996 (Pub. L. 104-134). Subsection 31001(x)(1) of 
the Act amends 31 U.S.C. 3332 to require, subject to the authority 
of the Secretary of the Treasury to grant waivers, that all Federal 
payment shall be made by EFT beginning January 2, 1999.
    Several respondents commented on the impact of this rule on 
small businesses. One respondent remarked on the ``financial burden 
now being inflicted by the changing payment policies.'' This method 
of payment, rather than a financial burden, should be economically 
beneficial to small and large entities. Administratively, EFT 
information is noncomplex and easy to provide to the Government with 
an offer, after award, or through the Central Contractor 
Registration process. Once the information has been furnished, the 
payment process will be faster and less burdensome than the payment 
process by check since small businesses will not have to worry about 
mail delays, depositing checks, lost mail, etc. A second respondent 
raised the concern about protecting small businesses from financial 
harm by safeguarding banking information from unauthorized use. The 
final rule addresses this concern at FAR 32.1104 by requiring 
agencies to safeguard EFT information provided to the Government.
    The final rule will apply, beginning January 2, 1999, to all 
small and large businesses who enter into contracts with the Federal 
Government unless one of the conditions enumerated at FAR 32.1103 
applies. The rule requires contractors to submit identification and 
account number information which will enable the Government to make 
contract payments by EFT. Administrative or financial personnel who 
have general knowledge of the contractor's bank account or a 
financial agent, are able to prepare the information required by the 
clauses.
    The goal of the alternative selected and reflected in the final 
rule is to provide flexibility with regard to the needs of small 
entities within the constraints and objectives of Pub. L. 104-134 
and implementing Treasury Regulations.

C. Paperwork Reduction Act

    The Paperwork Reduction Act (Pub. L. 96-511) is deemed to apply 
because the final rule contains information collection requirements. 
The collection of this information has been approved by the Office of 
Management and Budget (OMB) under OMB Control Number 9000-0144. Public 
comments concerning this request were invited through a Federal 
Register notice.

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

    Government procurement.

    Dated: February 25, 1999.
Edward C. Loeb,
Director, Federal Acquisition Policy Division.

    Therefore, 48 CFR Parts 13, 16, 32, and 52 are amended as set forth 
below:
    1. The authority citation for 48 CFR Parts 13, 16, 32, and 52 
continues to read as follows:

    Authority: 40 U.S.C. 486(c); 10 U.S.C. chapter 137; and 42 
U.S.C. 2473(c).

PART 13--SIMPLIFIED ACQUISITION PROCEDURES

    2. Section 13.201 is amended in paragraph (d) by removing 
``32.1103'' and inserting ``32.1110''.
    3. Section 13.301 is amended at the end of paragraph (b) by adding 
a new sentence to read as follows:


13.301  Governmentwide commercial purchase card.

* * * * *
    (b) * * * See 32.1110(d) for instructions for use of the 
appropriate clause when payment under a written contract will be made 
through use of the card.
* * * * *
    4. Section 13.302-1 is amended by revising paragraph (e) to read as 
follows:


13.302-1  General.

* * * * *

[[Page 10540]]

    (e) In accordance with 31 U.S.C. 3332, electronic funds transfer 
(EFT) is required for payments except as provided in 32.1110. See 
Subpart 32.11 for instructions for use of the appropriate clause in 
purchase orders. When obtaining oral quotes, the contracting officer 
shall inform the quoter of the EFT clause that will be in any resulting 
purchase order.

PART 16--TYPES OF CONTRACTS

    5. Section 16.505 is amended by redesignating paragraph 
(a)(6)(viii) as (a)(6)(ix); and adding a new paragraph (a)(6)(viii) to 
read as follows:


16.505  Ordering.

    (a) * * *
    (6) * * *
    (viii) Method of payment and payment office, if not specified in 
the contract (see 32.1110(e)).
* * * * *

PART 32--CONTRACT FINANCING

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

Subpart 32.11--Electronic Funds Transfer

32.1100  Scope of subpart.
32.1101  Statutory requirements.
32.1102  Definitions.
32.1103  Applicability.
32.1104  Protection of EFT information.
32.1105  Assignment of claims.
32.1106  EFT mechanisms.
32.1107  Payment information.
32.1108  Payment by Governmentwide commercial purchase card.
32.1109  EFT information submitted by offerors.
32.1110  Solicitation provision and contract clauses.

Subpart 32.11--Electronic Funds Transfer


32.1100  Scope of subpart.

    This subpart provides policy and procedures for contract financing 
and delivery payments to contractors by electronic funds transfer 
(EFT).


32.1101  Statutory requirements.

    31 U.S.C. 3332 requires, subject to implementing regulations of the 
Secretary of the Treasury at 31 CFR part 208, that EFT be used to make 
all contract payments.


32.1102  Definitions.

    Electronic Funds Transfer (EFT) means any transfer of funds, other 
than a transaction originated by cash, check, or similar paper 
instrument, that is initiated through an electronic terminal, 
telephone, computer, or magnetic tape, for the purpose of ordering, 
instructing, or authorizing a financial institution to debit or credit 
an account. The term includes Automated Clearing House transfers, 
Fedwire transfers, and transfers made at automatic teller machines and 
point-of-sale terminals. For purposes of compliance with 31 U.S.C. 3332 
and implementing regulations at 31 CFR part 208, the term ``electronic 
funds transfer'' includes a Governmentwide commercial purchase card 
transaction.
    EFT information means information necessary for making a payment by 
EFT through specified EFT mechanisms.
    Governmentwide commercial purchase card, as used in this part, 
means a card that is similar in nature to a commercial credit card that 
is used to make financing and delivery payments for supplies and 
services. The purchase card is an EFT method and it may be used as a 
means to meet the requirement to pay by EFT, to the extent that 
purchase card limits do not preclude such payments.
    Payment information means the payment advice provided by the 
Government to the contractor that identifies what the payment is for, 
any computations or adjustments made by the Government, and any 
information required by the Prompt Payment Act.


32.1103  Applicability.

    The Government shall provide all contract payments through EFT 
except if--
    (a) The office making payment under a contract that requires 
payment by EFT, loses the ability to release payment by EFT. To the 
extent authorized by 31 CFR part 208, the payment office shall make 
necessary payments pursuant to paragraph (a)(2) of the clause at either 
52.232-33 or 52.232-34 until such time as it can make EFT payments;
    (b) The payment is to be received by or on behalf of the contractor 
outside the United States and Puerto Rico (but see 32.1106(b));
    (c) A contract is paid in other than United States currency (but 
see 32.1106(b));
    (d) Payment by EFT under a classified contract (see 4.401) could 
compromise the safeguarding of classified information or national 
security, or where arrangements for appropriate EFT payments would be 
impractical due to security considerations;
    (e) A contract is awarded by a deployed contracting officer in the 
course of military operations, including, but not limited to, 
contingency operations as defined in 10 U.S.C. 101(a)(13), or a 
contract is awarded by any contracting officer in the conduct of 
emergency operations, such as responses to natural disasters or 
national or civil emergencies, if--
    (1) EFT is not known to be possible; or
    (2) EFT payment would not support the objectives of the operation;
    (f) The agency does not expect to make more than one payment to the 
same recipient within a one-year period;
    (g) An agency's need for supplies and services is of such unusual 
and compelling urgency that the Government would be seriously injured 
unless payment is made by a method other than EFT;
    (h) There is only one source for supplies and services and the 
Government would be seriously injured unless payment is made by a 
method other than EFT; or
    (i) Otherwise authorized by Department of the Treasury Regulations 
at 31 CFR part 208.


32.1104  Protection of EFT information.

    The Government shall protect against improper disclosure of 
contractors' EFT information.


32.1105  Assignment of claims.

    The use of EFT payment methods is not a substitute for a properly 
executed assignment of claims in accordance with Subpart 32.8. EFT 
information that shows the ultimate recipient of the transfer to be 
other than the contractor, in the absence of a proper assignment of 
claims, is considered to be incorrect EFT information within the 
meaning of the ``Suspension of Payment'' paragraphs of the EFT clauses 
at 52.232-33 and 52.232-34.


32.1106  EFT mechanisms.

    (a) Domestic EFT mechanisms. The EFT clauses at 52.232-33 and 
52.232-34 are designed for use with the domestic United States banking 
system, using United States currency, and only the specified mechanisms 
(U.S. Automated Clearing House, and Fedwire Transfer System) of EFT. 
However, the head of an agency may authorize the use of any other EFT 
mechanism for domestic EFT with the concurrence of the office or agency 
responsible for making payments.
    (b) Nondomestic EFT mechanisms and other than United States 
currency. The Government shall provide payment by other than EFT for 
payments received by or on behalf of the contractor outside the United 
States and Puerto Rico or for contracts paid in other than United 
States currency. However, the head of an agency may authorize 
appropriate use of EFT with the concurrence of the office or agency 
responsible for making payments if--

[[Page 10541]]

    (1) The political, financial, and communications infrastructure in 
a foreign country supports payment by EFT; or
    (2) Payments of other than United States currency may be made 
safely.


 32.1107  Payment information.

    The payment or disbursing office shall forward to the contractor 
available payment information that is suitable for transmission as of 
the date of release of the EFT instruction to the Federal Reserve 
System.


 32.1108  Payment by Governmentwide commercial purchase card.

    A Governmentwide commercial purchase card charge authorizes the 
third party (e.g., financial institution) that issued the purchase card 
to make immediate payment to the contractor. The Government reimburses 
the third party at a later date for the third party's payment to the 
contractor.
    (a) The clause at 52.232-36, Payment by Third Party, governs when a 
contractor submits a charge against the purchase card for contract 
payment. The clause provides that the contractor shall make such 
payment requests by a charge to a Government account with the third 
party at the time the payment clause(s) of the contract authorizes the 
contractor to submit a request for payment, and for the amount due in 
accordance with the terms of the contract. To the extent that such a 
payment would otherwise be approved, the charge against the purchase 
card should not be disputed when the charge is reported to the 
Government by the third party. To the extent that such payment would 
otherwise not have been approved, an authorized individual (see 1.603-
3) shall take action to remove the charge, such as by disputing the 
charge with the third party or by requesting that the contractor credit 
the charge back to the Government under the contract.
    (b) Written contracts to be paid by purchase card should include 
the clause at 52.232-36, Payment by Third Party, as prescribed by 
32.1110(d). However, payment by a purchase card also may be made under 
a contract that does not contain the clause to the extent the 
contractor agrees to accept that method of payment.
    (c) The clause at 52.232-36, Payment by Third Party, requires that 
the contract--
    (1) Identify the third party and the particular purchase card to be 
used; and
    (2) Not include the purchase card account number. The purchase card 
account number should be provided separately to the contractor.


 32.1109  EFT information submitted by offerors.

    If offerors are required to submit EFT information prior to award, 
the successful offeror is not responsible for resubmitting this 
information after award of the contract except to make changes, or to 
place the information on invoices if required by agency procedures. 
Therefore, contracting officers shall forward EFT information provided 
by the successful offeror to the appropriate office.


 32.1110  Solicitation provision and contract clauses.

    (a) Unless payment will be made exclusively through use of the 
Governmentwide commercial purchase card or other third party payment 
arrangement (see 13.301 and paragraph (d) of this section) or an 
exception listed in 32.1103(a) through (i) applies--
    (1) The contracting officer shall insert the clause at 52.232-33, 
Payment by Electronic Funds Transfer--Central Contractor Registration, 
in all solicitations and contracts if the payment office uses the 
Central Contractor Registration (CCR) database as its source of EFT 
information. The contracting officer also shall insert this clause if 
the payment office does not currently have the ability to make payment 
by EFT, but will use the CCR database as its source of EFT information 
when it begins making payments by EFT;
    (2)(i) The contracting officer shall insert the clause at 52.232-
34, Payment by Electronic Funds Transfer--Other than Central Contractor 
Registration, in all other solicitations and contracts. The contracting 
officer also shall insert this clause if the payment office currently 
does not have the ability to make payment by EFT, but will use a source 
other than the CCR database for EFT information when it begins making 
payments by EFT.
    (ii)(A) If permitted by agency procedures, the contracting officer 
may insert in paragraph (b)(1) of the clause, a particular time after 
award, such as a fixed number of days, or event such as the submission 
of the first request for payment.
    (B) If no agency procedures are prescribed, the time period 
inserted in paragraph (b)(1) of the clause shall be ``no later than 15 
days prior to submission of the first request for payment.''
    (b) If the head of the agency has authorized, in accordance with 
32.1106, to use a nondomestic EFT mechanism, the contracting officer 
shall insert in solicitations and contracts a clause substantially the 
same as 52.232-33 or 52.232-34 that clearly addresses the nondomestic 
EFT mechanism.
    (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 52.232-35, 
Designation of Office for Government Receipt of Electronic Funds 
Transfer Information, or a clause substantially the same as 52.232-35 
that clearly informs the contractor where to send the EFT information.
    (d) If payment under a written contract will be made by a charge to 
a Government account with a third party such as a Governmentwide 
commercial purchase card, then the contracting officer shall insert the 
clause at 52.232-36, Payment by Third Party, in solicitations and 
contracts. Payment by a purchase card may also be made under a contract 
that does not contain the clause at 52.232-36, to the extent the 
contractor agrees to accept that method of payment.
    (e) If the contract or agreement provides for the use of delivery 
orders, and provides that the ordering office designate the method of 
payment for individual orders, the contracting officer shall insert, in 
the solicitation and contract or agreement, the clause at 52.232-37, 
Multiple Payment Arrangements, and, to the extent they are applicable, 
the clauses at--
    (1) 52.232-33, Payment by Electronic Funds Transfer--Central 
Contractor Registration;
    (2) 52.232-34, Payment by Electronic Funds Transfer--Other than 
Central Contractor Registration; and
    (3) 52.232-36, Payment by Third Party.
    (f) If more than one disbursing office will make payment under a 
contract or agreement, the contracting officer, or ordering office (if 
the contract provides for choices between EFT clauses on individual 
orders or classes of orders), shall include or identify the EFT clause 
appropriate for each office and shall identify the applicability by 
disbursing office and contract line item.
    (g) If the solicitation contains the clause at 52.232-34, Payment 
by Electronic Funds Transfer--Other than Central Contractor 
Registration, and an offeror is required to submit EFT information 
prior to award--
    (1) The contracting officer shall insert in the solicitation the 
provision at 52.232-38, Submission of Electronic Funds Transfer 
Information with Offer, or a provision substantially the same; and
    (2) For sealed bid solicitations, the contracting officer shall 
amend 52.232-

[[Page 10542]]

38 to ensure that a bidder's EFT information--
    (i) Is not a part of the bid to be opened at the public opening; 
and
    (ii) May not be released to members of the general public who 
request a copy of the bid.

PART 52--SOLICITATION PROVISIONS AND CONTRACT CLAUSES

    8. Section 52.212-4 is amended by revising the date and the third 
sentence in paragraph (i) of the clause to read as follows:


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

* * * * *

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

* * * * *
    (i) * * * If the Government makes payment by Electronic Funds 
Transfer (EFT), see 52.212-5(b) for the appropriate EFT clause. * * *
* * * * *
    9. Section 52.212-5 is amended by revising the date of the clause; 
in the parenthetical in paragraph (b)(21) by inserting a period after 
the ``C'' in ``U.S.C''; by redesignating (b)(22) and (b)(23) as (b)(25) 
and (b)(26); and by adding new paragraphs (b)(22) through (b)(24) to 
read as follows:


 52.212-5  Contract Terms and Conditions Required To Implement Statutes 
or Executive Orders--Commercial Items.

* * * * *

Contract Terms and Conditions Required To Implement Statutes or 
Executive Orders--Commercial Items (May 1999)

* * * * *
    (b) * * *
    ______(22) 52.232-33, Payment by Electronic Funds Transfer--
Central Contractor Registration (31 U.S.C. 3332).
    ______(23) 52.232-34, Payment by Electronic Funds Transfer--
Other than Central Contractor Registration (31 U.S.C. 3332).
    ______(24) 52.232-36, Payment by Third Party (31 U.S.C. 3332).
* * * * *
    10. Section 52.213-4 is amended by revising the date of the clause; 
by removing paragraph (a)(2)(vi); and redesignating paragraphs 
(a)(2)(vii) through (a)(2)(ix) as (a)(2)(vi) through (a)(2)(viii), 
respectively; and by adding new paragraphs (b)(1)(ix) and (b)(1)(x) to 
read as follows:


 52.213-4  Terms and Conditions--Simplified Acquisitions (Other Than 
Commercial Items).

* * * * *

Terms and Conditions--Simplified Acquisitions (Other Than Commercial 
Items) (May 1999)

* * * * *
    (b) * * *
    (1) * * *
    (ix) 52.232-33, Payment by Electronic Funds Transfer--Central 
Contractor Registration (May 1999). (Applies when the payment will be 
made by electronic funds transfer (EFT) and the payment office uses the 
Central Contractor Registration (CCR) database as its source of EFT 
information.)
    (x) 52.232-34, Payment by Electronic Funds Transfer--Other than 
Central Contractor Registration (May 1999). (Applies when the payment 
will be made by EFT and the payment office does not use the CCR 
database as its source of EFT information.)
* * * * *
    11. Sections 52.232-33 and 52.232-34, headings and text, are 
revised to read as follows:


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

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

Payment by Electronic Funds Transfer--Central Contractor Registration 
(May 1999)

    (a) Method of payment. (1) All payments by the Government under 
this contract shall be made by electronic funds transfer (EFT), 
except as provided in paragraph (a)(2) of this clause. As used in 
this clause, the term ``EFT'' refers to the funds transfer and may 
also include the payment information transfer.
    (2) In the event the Government is unable to release one or more 
payments by EFT, the Contractor agrees to either--
    (i) Accept payment by check or some other mutually agreeable 
method of payment; or
    (ii) Request the Government to extend the payment due date until 
such time as the Government can make payment by EFT (but see 
paragraph (d) of this clause).
    (b) Contractor's EFT information. The Government shall make 
payment to the Contractor using the EFT information contained in the 
Central Contractor Registration (CCR) database. In the event that 
the EFT information changes, the Contractor shall be responsible for 
providing the updated information to the CCR database.
    (c) Mechanisms for EFT payment. The Government may make payment 
by EFT through either the Automated Clearing House (ACH) network, 
subject to the rules of the National Automated Clearing House 
Association, or the Fedwire Transfer System. The rules governing 
Federal payments through the ACH are contained in 31 CFR part 210.
    (d) Suspension of payment. If the Contractor's EFT information 
in the CCR database is incorrect, then the Government need not make 
payment to the Contractor under this contract until correct EFT 
information is entered into the CCR database; and any invoice or 
contract financing request shall be deemed not to be a proper 
invoice for the purpose of prompt payment under this contract. The 
prompt payment terms of the contract regarding notice of an improper 
invoice and delays in accrual of interest penalties apply. 
    (e) Contractor EFT arrangements. If the Contractor has 
identified multiple payment receiving points (i.e., more than one 
remittance address and/or EFT information set) in the CCR database, 
and the Contractor has not notified the Government of the payment 
receiving point applicable to this contract, the Government shall 
make payment to the first payment receiving point (EFT information 
set or remittance address as applicable) listed in the CCR database.
    (f) Liability for uncompleted or erroneous transfers. (1) If an 
uncompleted or erroneous transfer occurs because the Government used 
the Contractor's EFT information incorrectly, the Government remains 
responsible for--
    (i) Making a correct payment;
    (ii) Paying any prompt payment penalty due; and
    (iii) Recovering any erroneously directed funds.
    (2) If an uncompleted or erroneous transfer occurs because the 
Contractor's EFT information was incorrect, or was revised within 30 
days of Government release of the EFT payment transaction 
instruction to the Federal Reserve System, and--
    (i) If the funds are no longer under the control of the payment 
office, the Government is deemed to have made payment and the 
Contractor is responsible for recovery of any erroneously directed 
funds; or
    (ii) If the funds remain under the control of the payment 
office, the Government shall not make payment, and the provisions of 
paragraph (d) of this clause shall apply.
    (g) EFT and prompt payment. A payment shall be deemed to have 
been made in a timely manner in accordance with the prompt payment 
terms of this contract if, in the EFT payment transaction 
instruction released to the Federal Reserve System, the date 
specified for settlement of the payment is on or before the prompt 
payment due date, provided the specified payment date is a valid 
date under the rules of the Federal Reserve System.
    (h) EFT and assignment of claims. If the Contractor assigns the 
proceeds of this contract as provided for in the assignment of 
claims terms of this contract, the Contractor shall require as a 
condition of any such assignment, that the assignee shall register 
in the CCR database and shall be paid by EFT in accordance with the 
terms of this clause. In all respects, the requirements of this 
clause shall apply to the assignee as if it were the Contractor. EFT 
information that shows the ultimate recipient of the transfer to be 
other than the Contractor, in the absence of a proper assignment of 
claims acceptable to the Government, is incorrect EFT information 
within the meaning of paragraph (d) of this clause.
    (i) Liability for change of EFT information by financial agent. 
The Government is not liable for errors resulting from changes to 
EFT information made by the Contractor's financial agent.

[[Page 10543]]

    (j) Payment information. The payment or disbursing office shall 
forward to the Contractor available payment information that is 
suitable for transmission as of the date of release of the EFT 
instruction to the Federal Reserve System. The Government may 
request the Contractor to designate a desired format and method(s) 
for delivery of payment information from a list of formats and 
methods the payment office is capable of executing. However, the 
Government does not guarantee that any particular format or method 
of delivery is available at any particular payment office and 
retains the latitude to use the format and delivery method most 
convenient to the Government. If the Government makes payment by 
check in accordance with paragraph (a) of this clause, the 
Government shall mail the payment information to the remittance 
address contained in the CCR database.

(End of Clause)


 52.232-34  Payment by Electronic Funds Transfer--Other than Central 
Contractor Registration.

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

Payment by Electronic Funds Transfer--Other Than Central Contractor 
Registration (May 1999)

    (a) Method of payment. (1) All payments by the Government under 
this contract shall be made by electronic funds transfer (EFT) 
except as provided in paragraph (a)(2) of this clause. As used in 
this clause, the term ``EFT'' refers to the funds transfer and may 
also include the payment information transfer.
    (2) In the event the Government is unable to release one or more 
payments by EFT, the Contractor agrees to either--
    (i) Accept payment by check or some other mutually agreeable 
method of payment; or
    (ii) Request the Government to extend payment due dates until 
such time as the Government makes payment by EFT (but see paragraph 
(d) of this clause).
    (b) Mandatory submission of Contractor's EFT information. (1) 
The Contractor is required to provide the Government with the 
information required to make payment by EFT (see paragraph (j) of 
this clause). The Contractor shall provide this information directly 
to the office designated in this contract to receive that 
information (hereafter: ``designated office'') by 
____________________ [the Contracting Officer shall insert date, 
days after award, days before first request, the date specified for 
receipt of offers if the provision at 52.232-38 is utilized, or 
``concurrent with first request'' as prescribed by the head of the 
agency; if not prescribed, insert ``no later than 15 days prior to 
submission of the first request for payment'']. If not otherwise 
specified in this contract, the payment office is the designated 
office for receipt of the Contractor's EFT information. If more than 
one designated office is named for the contract, the Contractor 
shall provide a separate notice to each office. In the event that 
the EFT information changes, the Contractor shall be responsible for 
providing the updated information to the designated office(s).
    (2) If the Contractor provides EFT information applicable to 
multiple contracts, the Contractor shall specifically state the 
applicability of this EFT information in terms acceptable to the 
designated office. However, EFT information supplied to a designated 
office shall be applicable only to contracts that identify that 
designated office as the office to receive EFT information for that 
contract.
    (c) Mechanisms for EFT payment. The Government may make payment 
by EFT through either the Automated Clearing House (ACH) network, 
subject to the rules of the National Automated Clearing House 
Association, or the Fedwire Transfer System. The rules governing 
Federal payments through the ACH are contained in 31 CFR part 210.
    (d) Suspension of payment. (1) The Government is not required to 
make any payment under this contract until after receipt, by the 
designated office, of the correct EFT payment information from the 
Contractor. Until receipt of the correct EFT information, any 
invoice or contract financing request shall be deemed not to be a 
proper invoice for the purpose of prompt payment under this 
contract. The prompt payment terms of the contract regarding notice 
of an improper invoice and delays in accrual of interest penalties 
apply.
    (2) If the EFT information changes after submission of correct 
EFT information, the Government shall begin using the changed EFT 
information no later than 30 days after its receipt by the 
designated office to the extent payment is made by EFT. However, the 
Contractor may request that no further payments be made until the 
updated EFT information is implemented by the payment office. If 
such suspension would result in a late payment under the prompt 
payment terms of this contract, the Contractor's request for 
suspension shall extend the due date for payment by the number of 
days of the suspension.
    (e) Liability for uncompleted or erroneous transfers. (1) If an 
uncompleted or erroneous transfer occurs because the Government used 
the Contractor's EFT information incorrectly, the Government remains 
responsible for--
    (i) Making a correct payment;
    (ii) Paying any prompt payment penalty due; and
    (iii) Recovering any erroneously directed funds.
    (2) If an uncompleted or erroneous transfer occurs because the 
Contractor's EFT information was incorrect, or was revised within 30 
days of Government release of the EFT payment transaction 
instruction to the Federal Reserve System, and--
    (i) If the funds are no longer under the control of the payment 
office, the Government is deemed to have made payment and the 
Contractor is responsible for recovery of any erroneously directed 
funds; or
    (ii) If the funds remain under the control of the payment 
office, the Government shall not make payment and the provisions of 
paragraph (d) shall apply.
    (f) EFT and prompt payment. A payment shall be deemed to have 
been made in a timely manner in accordance with the prompt payment 
terms of this contract if, in the EFT payment transaction 
instruction released to the Federal Reserve System, the date 
specified for settlement of the payment is on or before the prompt 
payment due date, provided the specified payment date is a valid 
date under the rules of the Federal Reserve System.
    (g) EFT and assignment of claims. If the Contractor assigns the 
proceeds of this contract as provided for in the assignment of 
claims terms of this contract, the Contractor shall require as a 
condition of any such assignment, that the assignee shall provide 
the EFT information required by paragraph (j) of this clause to the 
designated office, and shall be paid by EFT in accordance with the 
terms of this clause. In all respects, the requirements of this 
clause shall apply to the assignee as if it were the Contractor. EFT 
information that shows the ultimate recipient of the transfer to be 
other than the Contractor, in the absence of a proper assignment of 
claims acceptable to the Government, is incorrect EFT information 
within the meaning of paragraph (d) of this clause.
    (h) Liability for change of EFT information by financial agent. 
The Government is not liable for errors resulting from changes to 
EFT information provided by the Contractor's financial agent.
    (i) Payment information. The payment or disbursing office shall 
forward to the Contractor available payment information that is 
suitable for transmission as of the date of release of the EFT 
instruction to the Federal Reserve System. The Government may 
request the Contractor to designate a desired format and method(s) 
for delivery of payment information from a list of formats and 
methods the payment office is capable of executing. However, the 
Government does not guarantee that any particular format or method 
of delivery is available at any particular payment office and 
retains the latitude to use the format and delivery method most 
convenient to the Government. If the Government makes payment by 
check in accordance with paragraph (a) of this clause, the 
Government shall mail the payment information to the remittance 
address in the contract.
    (j) 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 (b) of this 
clause). The Contractor shall designate a single financial agent per 
contract capable of receiving and processing the EFT information 
using the EFT methods described in paragraph (c) 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).

[[Page 10544]]

    (6) If applicable, the Fedwire Transfer System telegraphic 
abbreviation of the Contractor's financial agent.
    (7) If applicable, 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 if the Contractor's financial agent is not directly 
on-line to the Fedwire Transfer System; and, therefore, not the 
receiver of the wire transfer payment.

(End of clause)
    12. Sections 52.232-35, 52.232-36, 52.232-37, and 52.232-38 are 
added to read as follows:


52.232-35 Designation of Office for Government Receipt of Electronic 
Funds Transfer Information.

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

Designation of Office for Government Receipt of Electronic Funds 
Transfer Information (May 1999)

    (a) As provided in paragraph (b) of the clause at 52.232-34, 
Payment by Electronic Funds Transfer--Other than Central Contractor 
Registration, the Government has designated the office cited in 
paragraph (c) of this clause as the office to receive the 
Contractor's electronic funds transfer (EFT) information, in lieu of 
the payment office of this contract.
    (b) The Contractor shall send all EFT information, and any 
changes to 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:
----------------------------------------------------------------------

(End of clause)


52.232-36   Payment by Third Party.

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

Payment by Third Party (May 1999)

    (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, if applicable, 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 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)


52.232-37 Multiple Payment Arrangements.

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

Multiple Payment Arrangements (May 1999)

    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)


52.232-38   Submission of Electronic Funds Transfer Information with 
Offer.

    As prescribed in 32.1110(g), insert the following provision:

Submission of Electronic Funds Transfer Information With Offer (May 
1999)

    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 (b)(1) and (j) of the clause at 
52.232-34, Payment by Electronic Funds Transfer--Other than Central 
Contractor Registration.
    (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, savings, or lockbox).
    (6) If applicable, the Fedwire Transfer System telegraphic 
abbreviation of the offeror's financial agent.
    (7) If applicable, 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 if the offeror's financial agent is not directly 
on-line to the Fedwire and, therefore, not the receiver of the wire 
transfer payment.

(End of provision)

[FR Doc. 99-5206 Filed 3-3-99; 8:45 am]
BILLING CODE 6820-EP-P