FAR 52.232-3—Payments under Personal Services Contracts.
Plain-English Summary
FAR 52.232-3, Payments under Personal Services Contracts, tells the parties how the Government will pay a contractor performing a personal services contract. It covers the basic payment trigger for services performed under the contract schedule, the requirement to submit proper invoices or time statements, the designated office or officer that must receive those submissions, and the timing of payment as stated in the contract and any applicable agency payment-date rules. It also addresses reimbursement of travel-related costs, specifically per diem in lieu of subsistence when the contractor is in travel status away from home or the regular place of employment, and any other transportation expenses if the schedule authorizes them. In practice, this clause is important because personal services contracts often resemble employment relationships in day-to-day performance, but payment still depends on contract terms, documentation, and authorized travel. The clause helps prevent disputes by tying payment to the schedule, proper billing support, and travel orders, while also limiting reimbursement to what is expressly authorized. It is a payment clause, not a labor-status clause, so it does not itself create or justify a personal services relationship; it simply governs how the Government pays when such a contract is properly used.
Key Rules
Pay for performed services
The Government must pay the contractor for services actually performed under the contract schedule at the rates prescribed in the contract. Payment is tied to the contract’s stated terms, not to informal understandings or work outside the schedule.
Proper invoice or time statement required
Payment is due only after the contractor submits proper invoices or time statements. The submission must go to the office or officer designated in the contract and must be made at the time specified in the contract.
Payment timing follows contract and agency rules
The clause requires payment at the time provided for in the contract, and it must be appropriately modified to reflect agency regulations on payment due dates. Agencies may therefore adjust the clause to align with their payment processing rules.
Per diem for authorized travel
The Government must pay a per diem rate in lieu of subsistence for each day the contractor is in travel status away from home or the regular place of employment, but only in accordance with the Federal Travel Regulations and only when authorized in proper travel orders.
Transportation costs only if scheduled
Any other transportation expenses are payable only if the contract schedule specifically provides for them. If the schedule is silent, the clause does not independently authorize reimbursement.
Responsibilities
Contracting Officer
Include the clause in personal services contracts as prescribed, modify payment due dates as required by agency regulations, designate the office or officer to receive invoices or time statements, and ensure travel orders and schedule language clearly authorize any reimbursable travel or transportation costs.
Contractor
Perform the services described in the schedule, submit proper invoices or time statements to the designated recipient at the required time, and claim only those per diem and transportation expenses that are authorized by the contract and supported by appropriate travel orders.
Agency
Establish and follow agency regulations affecting payment due dates, ensure contract administration procedures support timely review and payment, and maintain consistency between the contract schedule, travel authorization practices, and payment processing requirements.
Approving/Designated Official
Receive and review invoices or time statements, verify that the claimed services and travel expenses are authorized and properly documented, and process payment in accordance with the contract and applicable regulations.
Practical Implications
Contractors should expect payment to depend on documentation, not just performance; missing or late invoices or time statements can delay payment even when the work was completed.
Travel reimbursement is narrow: per diem requires travel status and proper travel orders, and transportation expenses are payable only if the schedule expressly allows them.
Because the clause is modified by agency regulations on payment due dates, contractors should not assume a single government-wide payment timeline applies in every case.
Contracting officers should make sure the schedule clearly states rates, billing instructions, and any travel/transportation entitlements to avoid disputes later.
This clause does not solve classification or personal-services-authority issues; if the underlying contract is not properly structured as a personal services contract, payment language alone will not cure that problem.
Official Regulatory Text
As prescribed in 32.111 (a)(3) , insert the following clause, appropriately modified with respect to payment due dates in accordance with agency regulations, in solicitations and contracts for personal services: Payments under Personal Services Contracts (Apr 1984) The Government shall pay the Contractor for the services performed by the Contractor, as set forth in the Schedule of this contract, at the rates prescribed, upon the submission by the Contractor of proper invoices or time statements to the office or officer designated and at the time provided for in this contract. The Government shall also pay the Contractor- (a) A per diem rate in lieu of subsistence for each day the Contractor is in a travel status away from home or regular place of employment in accordance with Federal Travel Regulations (41 CFR 101-7) as authorized in appropriate Travel Orders; and (b) Any other transportation expenses if provided for in the Schedule. (End of clause)