This series of FAR summaries is meant to take a meaningful portion of the Federal Acquisition Regulations to ensure an easy-to-understand approach to maintain that readers comprehend the process of doing business with the government and that the government exercises a fair and reasonable approach to doing business with the general public.
FAR 32.9 Prompt Payment
The government can negotiate a discount price if the invoice is paid early (FAR 32.902). If agreed to, the government has two options; 1.) pay the regular negotiated-price in accordance with the negotiated payment terms, or 2.) pay the discounted price per the negotiated discount by the close of the early discount window.
Agency heads give their Contracting Officers the ability to ask about this during negotiations (FAR 32.903).
Per FAR 32.904 all standard and discount payment terms are negotiated and finalized as a part of the contract.
If I could insert the EAS sound here then I would. This next part is very important. So, let this sink in.
FAR 32.905 shows in detail what a proper invoice is. The government won’t pay on a false document. The government won’t acknowledge commercial or federal experience shown on a false document. I’ve seen fake invoices and companies make fake invoices. Don’t do it! If payment disputes come up then proper beats improper every single time! If the invoice is right then the government will give you your money but usually no earlier than seven (7) days before the negotiated due date (FAR 32.906). Late fees are automatic (FAR 32.907). The CO settles all disputes (FAR 32.909).
I’ve negotiated these discounts for the VA FSS program. They are a way to make your contract stand out. Think of the neon sale tags at the grocery store. The government may just pick you if you offer a cheaper price. The CO will always ask for a prompt payment discount. You should think about it.
If you think I can help you then email nicholas.s.robertson@outlook.com for your introductory email and free consultation.
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