FAR 32.009-1—General.
Plain-English Summary
FAR 32.009-1 explains the Government’s accelerated payment policy for small businesses and for prime contractors that pay small business subcontractors. It covers who must be paid faster, the target timing for payment after receipt of a proper invoice and all other required documentation, the difference between civilian agencies and DoD authority, the requirement that prime contractors pass accelerated payments through to qualifying small business subcontractors, and the rule that this policy does not create new Prompt Payment Act rights or change late-payment interest rules. It also addresses the optional use of the Governmentwide commercial purchase card as a payment method to support faster payments, earn refunds, and reduce invoice-processing costs. In practice, this section is meant to improve cash flow for small businesses and the small business supply chain, while preserving existing legal payment protections and giving agencies a practical tool to speed payment processing.
Key Rules
Accelerated payment to small businesses
Civilian agencies and DoD must provide accelerated payments to small business contractors to the fullest extent permitted by law, with a goal of paying within 15 days after receipt of a proper invoice and all other required documentation, unless the contract establishes a specific payment date.
Pass-through to small subcontractors
If a prime contractor receives accelerated payment from the Government and subcontracts with a small business concern, the prime may receive accelerated payment only if it agrees to pay the small business subcontractor within 15 days of receiving the Government payment, to the maximum extent practicable, after receiving the subcontractor’s proper invoice and required documentation, and without charging extra consideration or fees.
DoD and civilian authority differ
The rule is grounded in different statutes for non-DoD agencies and DoD, but the practical payment goal is the same: accelerated payment to small business contractors and qualifying prime contractors with small business subcontractors.
No new Prompt Payment Act rights
Accelerated payment under this section does not create any new rights under the Prompt Payment Act. It also does not change how Prompt Payment Act late-payment interest applies if the Government pays late under the Act.
Purchase card may support payment
Agencies may use the Governmentwide commercial purchase card as a payment method to help facilitate accelerated payment, earn refunds, and reduce invoice-processing costs, subject to the rules in FAR 32.1108.
Responsibilities
Contracting Officer / Agency
Provide accelerated payments to small business contractors to the fullest extent permitted by law, aim for payment within 15 days after receipt of a proper invoice and all required documentation, and consider use of the Governmentwide commercial purchase card when it will help speed payment or reduce processing costs.
DoD
Apply the DoD-specific accelerated payment authority for small business contractors and qualifying prime contractors, using the same 15-day goal and statutory limits applicable to DoD.
Prime Contractor
If seeking accelerated payment while subcontracting with a small business concern, agree to pay the small business subcontractor within 15 days of receiving the Government’s accelerated payment, after receipt of the subcontractor’s proper invoice and required documentation, and do so without charging additional consideration or fees.
Small Business Contractor
Submit a proper invoice and all other required documentation so accelerated payment can be made; if acting as a subcontractor, provide the documentation needed for the prime contractor to pay promptly.
Small Business Subcontractor
Provide a proper invoice and required supporting documentation to the prime contractor so the prime can meet the 15-day pass-through payment commitment.
Practical Implications
This section is mainly about cash flow: small businesses should see faster payment when invoices are proper and complete, but the 15-day target is a goal, not an automatic guarantee in every case.
Contractors should make sure invoices and supporting documents are complete, because the accelerated-payment clock runs from receipt of a proper invoice and all other required documentation.
Prime contractors need to be careful before accepting accelerated payment tied to small business subcontracting, because they take on a pass-through payment commitment to the subcontractor and cannot impose extra fees for that arrangement.
Agencies should not treat accelerated payment as changing Prompt Payment Act rights; if a payment is late under the Act, interest rules still apply as usual.
Using the Governmentwide commercial purchase card can help agencies speed payment and reduce administrative cost, but it must be used consistently with the separate purchase-card rules and payment procedures.
Official Regulatory Text
(a) (1) Pursuant to 31 U.S.C. 3903(a) , agencies other than the Department of Defense (DoD) shall provide accelerated payments, to the fullest extent permitted by law, with a goal of 15 days after receipt of a proper invoice and all other required documentation, if a specific payment date is not established by contract, to— (i) Small business contractors; and (ii) Prime contractors that subcontract with a small business concern, if the prime contractor agrees to make payments to the small business subcontractor within 15 days of receiving the accelerated payment from the Government, after receipt of a proper invoice and all other required documentation from the small business subcontractor, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor. (2) Pursuant to 10 U.S.C. 3801(b) , DoD shall provide accelerated payments, to the fullest extent permitted by law, with a goal of 15 days after receipt of a proper invoice and all other required documentation, to— (i) Small business contractors; and (ii) Prime contractors that subcontract with a small business concern, if the prime contractor agrees to make payments to the small business subcontractor within 15 days of receiving the accelerated payment from the Government, after receipt of a proper invoice and all other required documentation from the small business subcontractor, to the maximum extent practicable, without any further consideration from or fees charged to the subcontractor. (b) This acceleration does not provide any new rights under the Prompt Payment Act and does not affect the application of the Prompt Payment Act late payment interest provisions. (c) Agencies may use the Governmentwide commercial purchase card as a method of payment (see 32.1108 ) to facilitate accelerated payment, to earn refunds, and to reduce invoice processing costs.