What are the prompt payment rules for federal invoicing under FAR 32.9, and what do I do if the government pays late?

Details / How it works

Standard Payment Due Date

The due date is the later of:

• 30 days after the designated billing office receives a proper invoice; or
• 30 days after Government acceptance of the supplies or services (FAR 32.904(b)(1)).

Constructive acceptance is deemed to occur on the 7th day after delivery if actual acceptance hasn't happened earlier (FAR 32.904(b)(1)(ii)(B)).

Proper Invoice Requirements (FAR 32.905(b))

A proper invoice must include: contractor name/address, invoice date/number, contract/order number, description/quantity/unit price/extended price, shipping/payment terms, remit-to address, contact name/phone, and TIN where required. If the invoice is defective, the billing office must return it within 7 days after receipt, stating the reasons; the payment clock restarts when a corrected invoice is received.

Late Payment Interest (FAR 32.907)

When the Government pays after the due date on a proper invoice with documented acceptance, the payment office automatically pays an interest penalty computed under OMB prompt payment regulations (5 CFR Part 1315) using the Treasury Prompt Payment interest rate. Contractors do not need to request the interest.

5 CFR 1315.4 — Agency Standards

Agencies must maintain documentation of payment transactions (5 CFR 1315.4(a)). The payment period begins on receipt of a proper invoice. Invoices must be reviewed promptly; if improper, returned within 7 days. For commercial items, acceptance should be prompt. The regulation also specifies special due dates for certain commodities.

Numbers & thresholds

Note: Due dates are calendar days. The standard due date is 30 days after the start of the payment period if no contract term, discount, or accelerated method applies (5 CFR 1315.4(g)(1)(iv)).

Exceptions & edge cases

Defective Invoices

If the agency determines an invoice is improper, it must return the invoice to the contractor within 7 days after receipt, identifying all defects. The payment clock restarts only upon receipt of a corrected proper invoice (FAR 32.905; 5 CFR 1315.4(c)(2)).

Constructive Acceptance

Even if the Government does not formally accept supplies or services by day 7 after delivery, acceptance is deemed constructive on day 7 for interest penalty purposes, unless a longer acceptance period is specified in the contract (FAR 32.904(b)(1)(ii)(B)).

Discount Terms

If the contract includes discount terms and the contractor offers them, the due date may be earlier than the standard 30 days. Contractors must ensure invoices clearly state discount terms (5 CFR 1315.4(g)(1)(ii)).

Accelerated Payment Methods

Agencies may use accelerated payment methods (e.g., government purchase cards, electronic funds transfer) that result in payment earlier than the standard due date (5 CFR 1315.4(g)(1)(iii); 5 CFR 1315.5).

Mixed Invoices for Commodities

When an invoice includes multiple commodity types with different due dates, the agency must pay the earliest due portion promptly, and the remaining portion by its respective due date. The rule for mixed invoices is detailed in 5 CFR 1315.4(g)(4).

No Interest on Late Interest

Interest penalties are not compounded; no interest accrues on unpaid late payment interest.

Commercial Item Acquisitions

FAR Part 12 policies take precedence over other parts when they conflict, but prompt payment rules under Subpart 32.9 still apply to commercial item contracts unless specifically exempted.