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

FAR 32.607 Installment payments and deferment of 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 a contractor can request installment payments or deferment of a debt owed to the Government. The contracting officer does not decide these requests; a separate office designated in agency procedures approves or denies them. If approved, the agreement must include a payment schedule, may allow the Government to review the contractor's finances and require earlier payments, and must include interest on the debt.

Applies to: Contractors who owe a debt to the Government under a contract and request installment payments or deferment of collection.

What it requires

  • Submit a proposal for debt deferment or installment payments if seeking relief.
  • If an agreement is made, it must include a specific schedule or plan for payment.
  • Interest on contract debt must be made an element of any installment or deferment agreement, unless already applicable under the contract terms.

Key terms: installment payments · deferment of collection · contracting officer · office designated in agency procedures · Disputes clause

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

The text

(a) The contracting officer shall not approve or deny a contractor's request for installment payments or deferment of collections. The office designated in agency procedures is responsible for approving or denying requests for installment payments or deferment of collections.

(b) If a contractor has not appealed the debt or filed an action under the Disputes clause of the contract and the contractor has submitted a proposal for debt deferment or installment payments—

(1) The office designated in agency procedures may arrange for deferment/installment payments if the contractor is unable to pay at once in full or the contractor's operations under national defense contracts would be seriously impaired. The arrangement shall include appropriate covenants and securities and should be limited to the shortest practicable maturity; and

(2) The deferment/installment agreement shall include a specific schedule or plan for payment. It should permit the Government to make periodic financial reviews of the contractor and to require payments earlier than required by the agreement if the Government considers the contractor's ability to pay improved. It should also provide for required stated or measurable payments on the occurrence of specific events or contingencies that improve the contractor's ability to pay.

(c) If not already applicable under the contract terms, interest on contract debt shall be made an element of any agreement entered into for installment payments or deferment of collection.

Sections that refer to it

← 32.606 Debt collection. · 32.607-1 Installment payments. →

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 32.607 Installment payments and deferment of collection · SpendQuery