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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.6

FAR 32.606 Debt collection.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section explains how the government collects debts owed by contractors. If a contractor doesn't pay within 30 days or arrange a payment plan, the payment office will start withholding money. Debts delinquent over 180 days are transferred to the Treasury for collection.

Applies to: Government contractors who owe money to the government

What it requires

  • Liquidate the debt within 30 days of the due date or request installment payments or deferment of collection
  • Contracting officer must periodically follow up with the payment office to confirm debt collection and crediting

Key terms: debt · liquidated · withholding · delinquent · Assignment of Claims Act

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(a) If the contractor has not liquidated the debt within 30 days of the date due or requested installment payments or deferment of collection, the payment office shall initiate withholding of principal, interest, penalties, and administrative charges. In the event the contract is assigned under the Assignment of Claims Act of 1940 (31 U.S.C. 3727 and 41 U.S.C. 6305), the rights of the assignee will be scrupulously respected and withholding of payments shall be consistent with those rights. For additional information on assignment of claims, see Subpart 32.8.

(b) As provided for in the Debt Collection Improvement Act of 1996 (31 U.S.C. 3711(g)(1)), payment offices are required to transfer any debt that is delinquent more than 180 days to the Department of Treasury for collection.

(c) The contracting officer shall periodically follow up with the payment office to determine whether the debt has been collected and credited to the correct appropriation(s).

← 32.605 Final decisions. · 32.607 Installment payments and deferment of collection. →

Rule changes for FAR Part 32

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 32.606 Debt collection · SpendQuery