FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.6
FAR 32.608-2 Interest credits.
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 when a contractor is entitled to an interest credit on money the Government collected or withheld, such as when the debt is later reduced, an appeal finds an overcollection, or the Government unduly delayed payments on the same contract. It also sets out how those interest credits are calculated, including the rate and the time period used.
Applies to: Government collections of contract debt and interest credits owed to contractors
What it requires
- Apply an equitable interest credit when the debt is reduced, an appeal shows an overcollection, collection procedures overcollect, or the Government unduly delayed payments on the same contract without paying an interest penalty
- Compute interest credits using the rate under 52.232-17 on the reduced debt from the date of collection until monies are remitted to the contractor
- Do not credit interest that, added to other refunds or releases, exceeds the total amount collected or withheld for the debt
Key terms: equitable interest credit · Disputes Clause · overcollection · deferment of collection · interest clause
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
(a) An equitable interest credit shall be applied under the following circumstances:
(1) When the amount of debt initially determined is subsequently reduced; e.g., through a successful appeal.
(2) When any amount collected by the Government is in excess of the amount found to be due on appeal under the Disputes Clause of the contract.
(3) When the collection procedures followed in a given case result in an overcollection of the debt due.
(4) When the responsible official determines that the Government has unduly delayed payments to the contractor on the same contract at some time during the period to which the interest charge applied, provided an interest penalty was not paid for such late payment.
(b) Any appropriate interest credits shall be computed under the following procedures:
(1) Interest at the rate under 52.232-17 shall be charged on the reduced debt from the date of collection by the Government until the date the monies are remitted to the contractor.
(2) Interest may not be reduced for any time between the due date under the demand and the period covered by a deferment of collection, unless the contract includes an interest clause; e.g., the clause prescribed in 32.611.
(3) Interest shall not be credited in an amount that, when added to other amounts refunded or released to the contractor, exceeds the total amount that has been collected, or withheld for the purpose of collecting the debt. This limitation shall be further reduced by the amount of any limitation applicable under paragraph (b)(2) of this subsection.
← 32.608-1 Interest charges. · 32.609 Delays in receipt of notices or demands. →
Rule changes for FAR Part 32
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · final rule 2025-08-27 · effective 2025-10-01
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2025-08-07 · effective 2025-08-07
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · proposed 2024-11-29 · comments due 2025-01-28
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.