52.232-27 — Prompt Payment for Construction Contracts.

FAR 52.232-27 — Prompt Payment for Construction Contracts.. This clause is part of the Federal Acquisition Regulation and may be included in government contracts as a solicitation provision or contract clause.

52.232-27 Prompt Payment for Construction Contracts. As prescribed in 32.908(b), insert the following clause: Prompt Payment for Construction Contracts (JAN 2017) Notwithstanding any other payment terms in this contract, the Government will make invoice payments under the terms and conditions specified in this clause. The Government considers payment as being made on the day a check is dated or the date of an electronic funds transfer. Definitions of pertinent terms are set forth in sections 2.101, 32.001, and 32.902 of the Federal Acquisition Regulation. All days referred to in this clause are calendar days, unless otherwise specified. (However, see paragraph (a)(3) concerning payments due on Saturdays, Sundays, and legal holidays.) (a) Invoice payments —(1) Types of invoice payments. For purposes of this clause, there are several types of invoice payments that may occur under this contract, as follows: (i) Progress payments, if provided for elsewhere in this contract, based on Contracting Officer approval of the estimated amount and value of work or services performed, including payments for reaching milestones in any project. (A) The due date for making such payments is 14 days after the designated billing office receives a proper payment request. If the designated billing office fails to annotate the payment request with the actual date of receipt at the time of receipt, the payment due date is the 14th day after the date of the Contractor's payment request, provided the designated billing office receives a proper payment request and there is no disagreement over quantity, quality, or Contractor compliance with contract requirements. (B) The due date for payment of any amounts retained by the Contracting Officer in accordance with the clause at 52.232-5, Payments Under Fixed-Price Construction Contracts, is as specified in the contract or, if not specified, 30 days after approval by the Contracting Officer for release to the Contractor. (ii) Final payments based

• The Contractor shall prepare and submit invoices to the designated billing office specified in the contract.
• A proper invoice must include the items listed in paragraphs (a)(2)(i) through (a)(2)(xi) of this clause.
• If the invoice does not comply with these requirements, the designated billing office must return it within 7 days after receipt, with the reasons why it is not a proper invoice.
• (vi) Name and address of Contractor official to whom payment is to be sent (must be the same as that in the contract or in a proper notice of assignment).
• The Contractor shall include its TIN on the invoice only if required elsewhere in this contract.
• (A) The Contractor shall include EFT banking information on the invoice only if required elsewhere in this contract.
• (B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a proper invoice, the Contractor shall have submitted correct EFT banking information in accordance with the applicable solicitation provision ( e.g., 52.232-38, Submission of Electronic Funds Transfer Information with Offer), contract clause ( e.g., 52.232-33, Payment by Electronic Funds Transfer—System for Award Management , or 52.232-34, Payment by Electronic Funds Transfer—Other Than System for Award Management), or applicable agency procedures.
• (C) EFT banking information is not required if the Government waived the requirement to pay by EFT.
• (xi) Any other information or documentation required by the contract.
• (ii) The prompt payment regulations at 5 CFR 1315.10(c) do not require the Government to pay interest penalties if payment delays are due to disagreement between the Government and the Contractor over the payment amount or other issues involving contract compliance, or on amounts temporarily withheld or retained in accordance with the terms of the contract.
• The Government and the Contractor shall resolve claims involving disputes, and any interest that may be payable in accordance with the clause at FAR 52.233-1, Disputes.
• (ii)(A) The Contractor shall support written demands for additional penalty payments with the following data.
• The Contractor shall— ( 1 ) Specifically assert that late payment interest is due under a specific invoice, and request payment of all overdue late payment interest penalty and such additional penalty as may be required; ( 2 ) Attach a copy of the invoice on which the unpaid late payment interest was due; and ( 3 ) State that payment of the principal has been received, including the date of receipt.
• (B) If there is no postmark or the postmark is illegible— (1) The designated payment office that receives the demand will annotate it with the date of receipt provided the demand is received on or before the 40th day after payment was made; or ( 2 ) If the designated payment office fails to make the required annotation, the Government will determine the demand's validity based on the date the Contractor has placed on the demand, provided such date is no later than the 40th day after payment was made.
• The Contractor shall include in each subcontract for property or services (including a material supplier) for the purpose of performing this contract the following: (1) Prompt payment for subcontractors.
• An interest penalty clause that obligates the Contractor to pay to the subcontractor an interest penalty for each payment not made in accordance with the payment clause— (i) For the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and (ii) Computed at the rate of interest established by the Secretary of the Treasury, and published in the Federal Register, for interest payments under 41 U.S.C.
• A clause requiring each subcontractor tou (i) Include a payment clause and an interest penalty clause conforming to the standards set forth in paragraphs (c)(1) and (c)(2) of this clause in each of its subcontracts; and (ii) Require each of its subcontractors to include such clauses in their subcontracts with each lower-tier subcontractor or supplier.
• The clauses required by paragraph (c) of this clause shall not be construed to impair the right of the Contractor or a subcontractor at any tier to negotiate, and to include in their subcontract, provisions that— (1) Retainage permitted.
• If a Contractor, after making a request for payment to the Government but before making a payment to a subcontractor for the subcontractor's performance covered by the payment request, discovers that all or a portion of the payment otherwise due such subcontractor is subject to withholding from the subcontractor in accordance with the subcontract agreement, then the Contractor shall— (1) Subcontractor notice.
• Pay the subcontractor as soon as practicable after the correction of the identified subcontract performance deficiency, and— (i) Make such payment within— (A) Seven days after correction of the identified subcontract performance deficiency (unless the funds therefor must be recovered from the Government because of a reduction under paragraph (e)(5)(i)) of this clause; or (B) Seven days after the Contractor recovers such funds from the Government; or (ii) Incur an obligation to pay a late payment interest penalty computed at the rate of interest established by the Secretary of the Treasury, and published in the Federal Register, for interest payments under 41 U.S.C.