FAR 32.007—Contract financing payments.
Plain-English Summary
FAR 32.007 explains when contract financing payments are due, how payment timing is handled for different kinds of financing arrangements, what makes a financing request “proper,” and how agencies must track receipt dates. It covers the standard 30-day payment rule, agency authority to set shorter payment periods within limits, special treatment for advance payments, loans, and other nonrecurring financing arrangements, and the effect of audits or other reviews on payment timing. It also requires the designated billing office and designated payment office to date-stamp financing requests when received, which helps establish the payment clock and document processing history. In practice, this section matters because it sets the administrative framework for paying contractors under financing arrangements while preserving government review rights and preventing interest penalties from applying to delayed financing payments. Contractors need to submit requests exactly as the contract requires, and contracting officers and payment offices need clear procedures to avoid disputes over timeliness and completeness.
Key Rules
Default 30-day payment rule
Unless agency policy or paragraph (b) says otherwise, the designated payment office must pay a proper contract financing request within 30 days after the designated billing office receives it. This is the baseline timing rule for recurring financing requests.
Audit can delay payment
If an audit or other review is needed to confirm the request complies with the contract, the payment office is not required to pay by the normal due date. The government may hold payment until the review is complete.
Agency may shorten payment period
Agency heads may set a shorter payment period based on pricing or administrative needs, such as when financing terms are closely tied to agency pricing policy. The shorter period must still fit within the regulatory limits.
7-to-30-day limit
Any agency-prescribed payment period must be no less than 7 days and no more than 30 days. Agencies cannot create a faster or slower due date outside that range.
Special terms for nonrecurring financing
For advance payments, loans, or similar arrangements that do not involve repeated financing requests, payment is made according to the contract financing terms or as directed by the contracting officer. The 30-day rule does not control those arrangements.
Proper request required
A financing request must comply with the contract’s terms and conditions to be proper. If the request is defective, the contractor must correct it in the manner the contract specifies or as the contracting officer directs.
Receipt date must be recorded
Both the designated billing office and the designated payment office must annotate each financing request with the date they received it. This creates an official record for processing and due-date tracking.
No interest penalty
The government does not owe an interest penalty for delayed contract financing payments. Unlike some other payment regimes, late financing payments do not trigger interest under this section.
Responsibilities
Contractor
Submit a proper contract financing request that complies with the contract’s terms and conditions. If the request is defective, correct it in the manner required by the contract or as directed by the contracting officer.
Designated Billing Office
Record the date it receives each contract financing request. Forward or process the request according to agency procedures so the payment timeline can be tracked accurately.
Designated Payment Office
Pay proper recurring financing requests within the applicable due date, normally 30 days unless a shorter agency period or special contract terms apply. Record the date the request is received and, when necessary, delay payment until required audits or reviews are complete.
Contracting Officer
Set or direct payment timing for advance payments, loans, and other nonrecurring financing arrangements as authorized by the contract. Direct correction of defective requests when the contract or circumstances require it.
Agency Head
May establish shorter payment periods for contract financing payments based on pricing or administrative considerations, but must keep the period between 7 and 30 days.
Agency
Maintain policies and procedures that implement the payment timing rules, receipt-date annotation requirements, and review processes for financing requests.
Practical Implications
Contractors should make sure financing requests exactly match the contract requirements; a defective request can stop the payment clock until corrected.
Agencies should date-stamp requests immediately at both the billing and payment offices so there is no dispute over when the due date started.
If a financing request is selected for audit or review, payment may be delayed without violating the rule, so contractors should expect possible processing holds.
Contracting officers need to distinguish recurring financing requests from advance payments or loans, because those arrangements follow the contract terms rather than the default 30-day rule.
No interest penalty applies to late financing payments, so contractors cannot rely on Prompt Payment Act-style interest to compensate for delay under this section.
Official Regulatory Text
(a) (1) Unless otherwise prescribed in agency policies and procedures or otherwise specified in paragraph (b) of this section, the due date for making contract financing payments by the designated payment office is the 30th day after the designated billing office receives a proper contract financing request. (2) If an audit or other review of a specific financing request is required to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date. (3) Agency heads may prescribe shorter periods for payment based on contract pricing or administrative considerations. For example, a shorter period may be justified by an agency if the nature and extent of contract financing arrangements are integrated with agency contract pricing policies. (4) Agency heads must not prescribe a period shorter than 7 days or longer than 30 days. (b) For advance payments, loans, or other arrangements that do not involve recurrent submission of contract financing requests, the designated payment office will make payment in accordance with the applicable contract financing terms or as directed by the contracting officer. (c) A proper contract financing request must comply with the terms and conditions specified by the contract. The contractor must correct any defects in requests submitted in the manner specified in the contract or as directed by the contracting officer. (d) The designated billing office and designated payment office must annotate each contract financing request with the date their respective offices received the request. (e) The Government will not pay an interest penalty to the contractor as a result of delayed contract financing payments.