FAR 8.405-7—Payment.
Plain-English Summary
FAR 8.405-7 addresses how agencies may pay for orders placed under Federal Supply Schedule procedures, whether the order was issued orally or in writing. Its core purpose is to give agencies flexibility in making payments by allowing payment through any authorized means, including the Governmentwide commercial purchase card, while also pointing readers to the separate limitation in FAR 32.1108(b)(2). In practice, this section confirms that payment method is not restricted to a single process and may be matched to the agency’s ordering and payment systems, provided the method is otherwise authorized. The section is short, but it matters because payment handling affects speed, administrative burden, auditability, and compliance with governmentwide payment rules. Contractors and contracting personnel should read it as a permissive rule about payment methods, not as a waiver of other fiscal, card-use, or invoice-processing requirements.
Key Rules
Any authorized payment method
Agencies may use any payment method that is otherwise authorized to pay for oral or written orders. The rule is permissive, meaning it expands available payment options rather than requiring a particular method.
Purchase card allowed
The Governmentwide commercial purchase card may be used to make payments for these orders. This gives agencies a fast, low-administration payment option when card use is otherwise proper.
Subject to card-payment limits
The reference to FAR 32.1108(b)(2) means purchase card use is not unlimited and must comply with the separate restrictions in that provision. Agencies must check those limits before using the card for payment.
Applies to oral and written orders
The payment flexibility applies regardless of whether the order was placed orally or in writing. The form of the order does not change the agency’s ability to use an authorized payment method.
Responsibilities
Agency
Select and use an authorized payment method for oral or written orders, including the purchase card when permitted. Ensure the chosen method complies with FAR 32.1108(b)(2) and any internal fiscal or card-use controls.
Contracting Officer / Ordering Activity
Place orders using the applicable schedule procedures and coordinate payment arrangements consistent with authorized methods. Verify that the payment approach is appropriate for the order and does not conflict with other payment restrictions.
Contractor
Accept payment through the authorized method used by the agency and follow any invoicing or payment instructions tied to that method. Ensure billing practices align with the order terms and the agency’s payment process.
Practical Implications
This section gives agencies flexibility, which can speed up payment and reduce paperwork, especially for routine or low-dollar orders.
The main compliance risk is assuming the purchase card is always allowed; users must still check FAR 32.1108(b)(2) and agency policy.
Because the rule covers oral orders as well as written ones, agencies should still maintain enough documentation to support payment and audit review.
Contractors should confirm the agency’s intended payment method early so invoices, card acceptance, and internal accounting processes are set up correctly.
The section does not replace other payment requirements, so users must still follow invoice, fiscal, and internal control rules that apply elsewhere in the FAR and agency procedures.
Official Regulatory Text
Agencies may make payments for oral or written orders by any authorized means, including the Governmentwide commercial purchase card (but see 32.1108 (b)(2)).