agency involved may require by regulation or contract."

(2) OMB Circular A-125 provides that the following data must be included in an invoice for it to constitute a proper invoice:

(i) Name of the business concern and invoice date.

(ii) Contract number, or other authorization for delivery of property or services.

(iii) Description, price, and quantity of property and services actually delivered or rendered.

(iv) Shipping and payment terms.

(v) Name (where practicable), title, phone number, and complete mailing address of responsible official to whom payment is to be sent.

(vi) Other substantiating documentation or information as required by the contract.

(b) Invoice requirements clause. The contracting officer should insert the clause set forth at 352.242-78, Invoice Submission, in nonexempt solicitations and contracts (see 342.7203). The clause may be modified to provide for agency needs.

(b) Programmatic review of invoices will be completed by the project officer and forwarded to the contracting officer within five calendar days of their receipt.

(c) The above employees must inform the contracting officer, prior to award, of any extraordinary inspection/review requirements that may not allow for their effort to be completed within the five days period so that these requirements may be included in the contract.

(d) The contracting officer shall ensure that the contract file contains adequate documentation to substantiate the basis for extraordinary inspection/review requirements.

(e) Receiving reports for property must include:

(1) Contract or other authorization number.

(2) Name of contractor.

(3) Product or service description. (4) Quantities received and accepted, if applicable.

(5) Date(s) property or services were accepted.

(6) Signature, printed name, title, phone number, and mailing address of the designated receiving official. 342.7205-4 Processing invoices.

(a) Submission of invoices.

(1) The "Invoice Submission" article of the contract shall instruct the contractor where all invoices will be submitted.

(2) Normally, the invoice will be submitted directly to the fiscal office. Immediately upon receipt, the payment officer shall date stamp and review the invoice to determine whether it is proper. If the invoice contains an apparent error, defect, or impropriety, written notification shall be given to the contractor as early as possible but in no event later than 15 calendar days of the receipt of the invoice (3 days for meat or meat food products and 5 days for perishable agricultural commodities).

(3) If the invoice is considered proper, the payment officer shall place it in a system where periodic follow-up action can be taken and forward a copy to the contracting officer if his/her approval is required before payment can be made so that the contracting officer can return the approved invoice in sufficient time for payment to be made by the payment due date. In the latter case, close coordination is essential between the paying office and the approving official.

(4) Fiscal and contracting officers may agree to allow for invoices requiring contracting officer approval to be submitted by the fiscal office directly to the project officer for review and subsequent submission to the contracting officer for approval. If a receiving report or invoice requiring contracting officer approval is not received in the fiscal office when due, the payment of

ficer will request immediate submission from the responsible office.

(5) OPDIVS, STAFFDIVS and regional offices may elect to require contractors to submit invoices directly to the contracting officer for processing. However, when this option is used, the OPDIV, STAFFDIV, or regional office shall develop procedures to assure prompt approval and payment of invoices and shall maintain standards against which timely payment of invoices can be evaluated. These procedures and standards shall be developed in conjunction with the fiscal office and a copy shall be submitted through acquisition channels to the Director, Office of Procurement and Logistics Policy (OPLP), OPAL-OS. The Director, OPLP, will submit a copy of the procedures and standards to the Director, Division of Cash Management Policy and Procedures (DCMPP), OS.

(b) Receipt and processing invoices by the contracting officer.

(1) Immediately upon receipt, the contracting officer shall date stamp each invoice and review it to determine if the submission is in accordance with the terms of the contract. This date will establish the payment due date or defective invoice notification date when the contracting office is identified as the designated payment office.

(2) When the contract identifies the contracting office as the designated payment (approval) office and a submission is deficient, the contracting officer shall give the contractor written notice of the apparent error, defect, or impropriety within 15 calendar days of the receipt of the invoice (3 days for meat or meat food products and 5 days for perishable agricultural commodities). A copy of the notice will be submitted to the fiscal office. However, payment of an invoice should not be delayed because a minor amount is in question. Generally, a minor amount is considered to be less than 10% of the invoiced amount. The contractor should be informed of the problems in writing and, if appropriate, the amount deleted from the invoice and payment made. The contract file should be documented as to the action taken.

(3) The contracting officer, with assistance from the project officer, must insure that payments are commensurate with technical progress under the contract.

(4) With respect to contracts where the work is budgeted by phase or task, payment to the contractor shall be limited to the amount specified for each phase or task. Approval of invoices is thus controlled by these incremental limitations. Special care should be exercised to assure payments are not made prematurely, e.g., when authorizations to proceed to subsequent tasks are contingent upon approval of the prior task. It is, therefore, mandatory that those contracts susceptible to phasing require billing and financial reporting by tasks or phases.

(5) The Fixed-Fee clause prescribed at FAR 52.216-8 provides that after payment of 85% of the fixed-fee the contracting officer may withhold further payment of fee, within specified limits, only if he/she considers withholding necessary to protect the interests of the Government. Fees shall not be withheld unless the contracting officer makes a determination that such action is in the best interest of the Government and informs the contractor in writing of the reasons for withholding within the time periods set forth in (b)(2) above. A copy of the notification shall be submitted to the fiscal office.

(6) The Allowable Cost and Payment clause prescribed at FAR 52.216-7 requires the contracting officer to make payment in amounts determined to be allowable. The contracting officer shall notify a contractor in writing, within the time periods set forth in (b)(2) above, of any determination to withhold costs. Notification shall be made orally and confirmed in writing if it cannot be made timely. A copy of the notification shall be submitted to the fiscal office. The contracting officer shall follow the procedures in FAR 42.801 if, during the course of contract performance, costs are withheld because they are determined to be unallowable (see FAR 31.001). The notice of intent to disallow costs shall contain the appropriate elements set forth in FAR 42.801(c).

(7) When a contract requires payment to be made within 30 days after receipt of a proper invoice, the contracting officer shall submit the approved invoice to the fiscal office no later than sixteen (16) calendar days from receipt of a proper invoice by the designated payment office. However, when a contract provides for a payment due date other than 30 days after receipt of a proper invoice, and if contracting officer approval of the invoice is required before payment can be made, the contracting officer shall reach agreement with the fiscal office prior to award, as to when the invoice must be received in the designated payment office.

(8) When an invoice offers a financially advantageous discount, the contracting officer shall submit the approved invoice to the fiscal office in sufficient time to insure payment within the discount period. The fiscal office is responsible for determining if a discount is financially advantageous to take in accordance with Federal Cash Management Guidelines.

(c) Alternative procedures for invoice processing. In the event an OPDIV, STAFFDIV, or regional office is consistently unable to meet the prior review and approval requirements, it may submit an alternative plan to the Assistant Secretary for Management and Budget for approval that provides for:

(1) Submission of SF-1166, Voucher and Schedule of Payments, to the Treasury Department to allow for payment to be made when due or within the discount period;

(2) Review by the project officer and approval by the contracting officer of the invoice within 15 days after payment;

(3) Any necessary adjustments in the subsequent voucher payments; and (4) Payment of completion and final vouchers only after approval by the contracting officer.

The plan must explain why the OPDIV, STAFFDIV, or regional office is unable to meet the review and approval period. All approved alternative payment plans will be subject to periodic review and reevaluation.

[49 FR 14024, Apr. 9, 1984, as amended by 50 FR 23135, May 31, 1985; 50 FR 38004, Sept. 19, 1985]

342.7205-5 Interest penalty payments.

(a) An interest penalty will be determined and paid automatically by the fiscal office when all of the following conditions are met:

(1) There is a contract or purchase order with a business concern which contains the Interest on Overdue Payments clause set forth in 352.242-72.

(2) Federal acceptance of property or services has occurred and there is no disagreement over quantity, quality, or other contract provisions.

(3) A proper invoice has been received (except where no invoice is required, e.g., some periodic lease payments) or the activity fails to give notice that the invoice is not proper within 15 days of receipt of an invoice (3 days for meat or meat food products, and 5 days for perishable agricultural commodities).

(4) Payment is made to the business concern more than 15 days after the due date (3 days for meat or meat food products, and 5 days for perishable agricultural commodities).

(b) An interest penalty for contracts containing the Interest on Overdue Payments clause set forth at 352.24272 will also be paid if an activity takes a discount after the discount period has expired, and fails to correct the underpayment within 15 days of the expiration of the discount period (3 days for meat and meat food products, and 5 days for perishable agricultural commodities).

(c) Interest penalties are not required when payment is delayed because of a disagreement between a Federal agency and a business concern over the amount of the payment or other issues concerning compliance with the terms of a contract; nor are they required when payments are made solely for financing purposes, or for a period when amounts are withheld temporarily in accordance with the contract. Claims concerning disputes, and any interest that may be payable with respect to the period while the dispute is being settled, will be resolved in accordance with the

(a) The Department of the Treasury has initiated a program to make contract payments by wire transfer through the Treasury Financial Communications System (TFCS). During its initial phases, payments will be made by both check and wire transfer. The determination of the method of payment will be directed by the Department of Treasury through establishment of a vendor payment amount threshold above which TFCS payments will be required.

(b) Procedures for processing payments through the TFCS may be found in Chapter 2500, Part 4, Volume 1, of the Treasury Fiscal Requirements Manual.

(c) To accommodate payments by either of the payment methods discussed in paragraph (a) of this section, it is necessary that the check payment address and appropriate bank account information be obtained from Government contractors. The contract clause discussed at 342.7206-2 is designed to elicit the necessary information.

342.7206-2 Method of payment.

(a) The contracting officer shall insert the clause set forth at 352.24279, Method of Payment, in each solicitation and contract to give the Government the option to pay by check or wire transfer and require contractors to furnish the address where check payments should be sent and the appropriate bank account information needed to accomplish wire transfers.

(b) The office making payment shall be identified in the Method of Payment clause as the office designated to receive payment information. Payment information on assigned contracts will be obtained from the assignee by the office making payment if the contractor is unable to obtain it from the assignee.

342.7206-3 Coordination with paying offices.

The office designated to receive payment information shall establish pro

ment Property to Contractors 345.370 Providing Government property (in general).

(a) A contractor may be provided Government property or allowed to acquire such property at Government expense upon determination that:

(1) No practicable or economical alternative exists; e.g., acquisition from other sources, utilization of subcontractors, rental of property, or modification of program project requirements, etc.;

(2) The Government receives adequate consideration for providing the property; or

(3) Furnishing Government property is likely to result in substantially lower cost to the Government for the items produced or services rendered when all costs involved (e.g., transportation, installation, modification, maintenance, etc.) are compared with the cost to the Government of the contractor's use of privately-owned property.

(b) The determination that it is necessary to provide a contractor or subcontractor with property will be made by the contracting officer with the advice of the agency property official.

(c) If the program office is aware, prior to the submission of the request for contract, that it will be necessary to provide prospective contractors with property, a written justification must accompany the request for contract to the contracting activity.

Subpart 345.4-Contractor Use and Rental of Government Property 345.405 Contracts with foreign governments or international organizations. Upon the request of a foreign government or international organization, or a contractor certifying that it is acting on behalf of a foreign government or international organization, the contracting officer, with advice from the agency property official cognizant of Government property located in the United States, its possessions, or Puerto Rico, may give written

approval for its use without charge on contracts or subcontracts thereunder if:

(a) The foreign government or international organization would be authorized to place the contract with the activity concerned under the Foreign Assistance Act of 1961, as amended, or such use is authorized by an agreement with the foreign government;

(b) The foreign government's placement of the contract directly with the contractor is consistent with the best interests of the United States;

(c) It appears that the foreign government will place the contract with the contractor whether or not use is authorized, and no competitive pricing advantage will accrue to the contractor by virtue of its use;

(d) The contractor agrees that no charge for the use of the property will be included in the price charged the foreign government under the contract; and

(e) The use will not interfere with foreseeable requirements of the United States.