FAR 32.112—Nonpayment of subcontractors under contracts other than for commercial products and commercial services.

Subcontractor assertions of nonpayment.

FAR 32.112-1 addresses what a contracting officer may do when a subcontractor or supplier tells the Government that it has not been paid according to the payment terms of its subcontract, purchase order, or other agreement with the prime contractor. The section covers three related topics: the contracting officer’s authority to review payment compliance on construction contracts, the same authority for non-construction contracts, and the accuracy of any prime contractor certification that accompanies a payment request to the Government. For construction contracts, the focus is on whether the prime contractor has made progress payments in line with the Prompt Payment Act and final payment in line with the subcontract terms; for other contracts, the focus is on progress, final, or other payments required by the subcontract. The rule also allows the contracting officer, if noncompliance is found, to encourage prompt payment and, when the contract’s payment clauses allow it, reduce or suspend progress payments. Finally, if a payment certification is materially inaccurate, the contracting officer must start administrative or other remedial action. In practice, this section gives the Government a limited oversight tool to respond to credible nonpayment complaints and false payment certifications, while still leaving the underlying payment dispute primarily between the prime contractor and its subcontractor or supplier.

Subcontractor requests for information.

FAR 32.112-2 tells contracting officers how to respond when a subcontractor or supplier asks about payment status on a Federal contract. It applies only to contracts other than those for a commercial product or commercial service, and it requires the contracting officer to promptly tell the requester whether the prime contractor has submitted requests for progress payments or other payments to the Government and whether final payment has been made to the prime contractor. The rule exists to help subcontractors and suppliers protect themselves from payment risk by confirming whether the Government has paid the prime, which can be important when a lower-tier firm is trying to determine why it has not been paid. The section also recognizes a national security limitation: if the information is properly classified under an Executive order, the disclosure requirement does not apply. In practice, this is a narrow but important transparency rule that can help resolve payment disputes, but it does not require the Government to disclose more than the two specified facts, and it does not create a direct payment right for the subcontractor against the Government.