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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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38 sections with “interest penalty”

  • FAR 32.608-2 Interest credits.
    (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 Governm…
  • FAR 32.907 Interest penalties.
    (a) Late payment. The designated payment office will pay an interest penalty automatically, without request from the contractor, when all of the following conditions, if applicable, have been met: (1) The designated billing office received…
  • FAR 32.904 Determining payment due dates.
    … the effective date of the contract settlement. (B) For the sole purpose of computing an interest penalty that might be due the contractor— (1) Government acceptance is deemed to occur constructively on the 7th day after the contractor de…
  • FAR 42.709-5 Computing interest.
    For 42.709-2(a)(1)(ii), compute interest on any paid portion of the disallowed cost as follows: (a) Consider the overpayment to have occurred, and interest to have begun accumulating, from the midpoint of the contractor's fiscal year. Use …
  • FAR 52.232-25 Prompt payment.
    …r invoice. The Government will take into account untimely notification when computing any interest penalty owed the Contractor. (i) Name and address of the Contractor. (ii) Invoice date and invoice number. (The Contractor should date invo…
  • FAR 52.232-26 Prompt Payment for Fixed-Price Architect-Engineer Contracts.
    …7 days after receipt, with the reasons why it is not a proper invoice. When computing any interest penalty owed the Contractor, the Government will take into account if the Government notifies the Contractor of an improper invoice in an unt…
  • FAR 52.232-27 Prompt Payment for Construction Contracts.
    …7 days after receipt, with the reasons why it is not a proper invoice. When computing any interest penalty owed the Contractor, the Government will take into account if the Government notifies the Contractor of an improper invoice in an unt…
  • FAR 15.407-1 Defective certified cost or pricing data.
    …n to the price adjustment, the Government is entitled to recovery of any overpayment plus interest on the overpayments. The Government is also entitled to penalty amounts on certain of these overpayments. Overpayment occurs only when paymen…
  • FAR 31.205-41 Taxes.
    …en by the contractor at the direction or with the concurrence of the contracting officer. Interest or penalties incurred by the contractor for non-payment of any tax at the direction of the contracting officer or by reason of the failure of…
  • FAR 32.604 Demand for payment.
    …e date identified in the demand for payment. (3) The basis for and amount of any accrued interest or penalty. (4)(i) For debts resulting from specific contract terms (e.g., debts resulting from incentive clause provisions, Quarterly Limit…
  • FAR 52.216-7 Allowable Cost and Payment.
    …ost for performing this contract. (2) Contract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act. Interim payments made prior to the final payment under the contract are contract financing paym…
  • FAR 52.229-4 Federal, State, and Local Taxes (State and Local Adjustments).
    …supplies covered by this contract, or any tax assessed on the Contractor's possession of, interest in, or use of property, title to which is in the Government. Local taxes includes taxes imposed by a possession or territory of the United S…
  • FAR 52.229-6 Taxes—Foreign Fixed-Price Contracts.
    …supplies covered by this contract, or any tax assessed on the Contractor's possession of, interest in, or use of property, title to which is in the U.S. Government. (c)(1) Unless otherwise provided in this contract, the contract price incl…
  • FAR 32.906 Making payments.
    …re closed, may make payment on the following working day without incurring a late payment interest penalty. (4) When it is determined that the designated billing office erroneously rejected a proper invoice and upon resubmission of the inv…
  • FAR 52.212-3 Offeror Representations and Certifications—Commercial Products and Commercial Services.
    …mited to, one or more of the following: Ownership or interlocking management, identity of interests among family members, shared facilities and equipment, and the common use of employees. Inverted domestic corporation means a foreign incor…
  • FAR 52.222-41 Service Contract Labor Standards.
    …classification. Failure to pay the unlisted employees the compensation agreed upon by the interested parties and/or finally determined by the Wage and Hour Division retroactive to the date such class of employees commenced contract work sha…
  • FAR 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts.
    …in an amount that the Contracting Officer considers necessary to protect the Government's interests. The Contracting Officer may require a withhold of 5 percent of the amounts due under paragraph (a) of this clause, but the total amount wit…
  • FAR 31.205-47 Costs related to legal and other proceedings.
    …tract concerning a teaming arrangement, a joint venture, or similar arrangement of shared interest; or (ii) Dual sourcing, coproduction, or similar programs, are unallowable, except when— (A) Incurred as a result of compliance with specif…
  • FAR 32.001 Definitions.
    …nts are contract financing payments for prompt payment purposes (i.e., not subject to the interest penalty provisions of the Prompt Payment Act in accordance with subpart 32.9). A commercial interim payment is given to the contractor after …
  • FAR 32.007 Contract financing payments.
    …e date their respective offices received the request. (e) The Government will not pay an interest penalty to the contractor as a result of delayed contract financing payments.
  • FAR 32.202-2 Types of payments for commercial product and commercial service purchases.
    …nts are contract financing payments for prompt payment purposes (i.e., not subject to the interest penalty provisions of the Prompt Payment Act in accordance with subpart 32.9). These payments are not subject to subpart 32.4, Advance Paymen…
  • FAR 32.905 Payment documentation and process.
    … the designated billing office must adjust the due date for the purpose of determining an interest penalty, if any. (c) Authorization to pay. All invoice payments, with the exception of interim payments on cost-reimbursement contracts for …
  • FAR 52.232-16 Progress Payments.
    … due date. Progress payments are considered contract financing and are not subject to the interest penalty provisions of the Prompt Payment Act. (m) Progress payments under indefinite—delivery contracts. The Contractor shall account for an…
  • FAR 52.232-29 Terms for Financing of Purchases of Commercial Products and Commercial Services.
    …yment. A payment under this clause is a contract financing payment and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office will pay approved payment requests within 30 days of submittal of…
  • FAR 52.232-32 Performance-Based Payments.
    …financing payment under the Prompt Payment clause of this contract and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office will pay approved requests on the _____ [Contracting Officer inse…
  • FAR 32.1001 Policy.
    …nce-based payments are contract financing payments and, therefore, are not subject to the interest-penalty provisions of prompt payment (see Subpart 32.9). These payments shall be made in accordance with agency policy. (e) Performance-base…
  • FAR 33.202 Disputes.
    … the Disputes statute. In addition, the Disputes statute provides for— (a) the payment of interest on contractor claims; (b) certification of contractor claims; and (c) a civil penalty for contractor claims that are fraudulent or based on a…
  • FAR 42.709-2 General.
    …ubject to this section for which an indirect cost proposal has been submitted; plus (ii) Interest on the paid portion, if any, of the disallowance. (2) If the indirect cost was determined to be unallowable for that contractor before propo…
  • FAR 52.214-27 Price Reduction for Defective Certified Cost or Pricing Data—Modifications—Sealed Bidding.
    …be liable to and shall pay the United States at the time such overpayment is repaid— (1) Interest compounded daily, as required by 26 U.S.C. 6622, on the amount of such overpayment to be computed from the date(s) of overpayment to the Cont…
  • FAR 52.215-10 Price Reduction for Defective Certified Cost or Pricing Data.
    …be liable to and shall pay the United States at the time such overpayment is repaid— (1) Interest compounded daily, as required by 26 U.S.C. 6622, on the amount of such overpayment to be computed from the date(s) of overpayment to the Cont…
  • FAR 52.215-11 Price Reduction for Defective Certified Cost or Pricing Data—Modifications.
    …be liable to and shall pay the United States at the time such overpayment is repaid— (1) Interest compounded daily, as required by 26 U.S.C. 6622, on the amount of such overpayment to be computed from the date(s) of overpayment to the Cont…
  • FAR 52.222-15 Certification of Eligibility.
    …this contract, the Contractor certifies that neither it nor any person or firm who has an interest in the Contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of 40 U.S.C. 3144(b)(2) or 29 CFR 5.12(a…
  • FAR 52.232-33 Payment by Electronic Funds Transfer—System for Award Management.
    …nt terms of the contract regarding notice of an improper invoice and delays in accrual of interest penalties apply. (e) Liability for uncompleted or erroneous transfers. (1) If an uncompleted or erroneous transfer occurs because the Govern…
  • FAR 52.232-34 Payment by Electronic Funds Transfer—Other than System for Award Management.
    …nt terms of the contract regarding notice of an improper invoice and delays in accrual of interest penalties apply. (2) If the EFT information changes after submission of correct EFT information, the Government shall begin using the change…
  • FAR 52.242-3 Penalties for Unallowable Costs.
    …l to— (1) The amount of the disallowed cost allocated to this contract; plus (2) Simple interest, to be computed— (i) On the amount the Contractor was paid (whether as a progress or billing payment) in excess of the amount to which the C…
  • DFARS 237.7204 Format and clauses for educational service agreements.
    …tudents, should both the student and the Contractor decide it to be in the student's best interests to assist in the institution's teaching program, the Contractor may provide nominal compensation for part-time service. Base the compensatio…
  • DFARS 252.203-7001 Prohibition on Persons Convicted of Fraud or Other Defense-Contract-Related Felonies.
    …) The reasons for the requested waiver; and (4) An explanation of why a waiver is in the interest of national security. (g) Subcontracts. The Contractor agrees to include the substance of this clause, appropriately modified to reflect the…
  • DFARS 252.242-7005 Contractor business systems.
    …this clause. (8) The payment withholding authorized in this clause is not subject to the interest-penalty provisions of the Prompt Payment Act. (f) Correction of weaknesses. (1) The Contractor shall notify the Contracting Officer, in writ…

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.