FAR 52.232-25 — Prompt Payment
Establishes the government's obligation to pay valid invoices within 30 days (or other applicable timeframe) and the contractor's right to interest on late payments under the Prompt Payment Act.
When This Clause Applies
Included in nearly all FAR-based supply and service contracts above the micro-purchase threshold. Some excepted categories use FAR 52.232-26 (services) or 52.232-27 (construction).
What This Means for Contractors
Contractors are entitled to automatic interest on late government payments (rate set by Treasury, currently ~5%). Invoices must be 'proper' — containing all required elements — to start the 30-day clock. Discrepant invoices restart the clock when corrected.
Common Pitfalls
- 1Submitting invoices missing required elements (PO number, line items, PO unit prices)
- 2Not invoicing through the required electronic system (IPP for civilian, WAWF/PIEE for DoD)
- 3Failing to claim accrued interest on late payments
- 4Disputing late payment claims after the deadline to file a claim under the Disputes clause
Related Topics
Related Clauses
Payments under Time-and-Materials and Labor-Hour Contracts
Governs payment of labor hours at fixed hourly rates and reimbursement of materials at actual cost under T&M and labor-hour contracts.
Disputes
Implements the Contract Disputes Act — contractors must submit claims in writing to the contracting officer, who issues a final decision that can be appealed to the Boards of Contract Appeals or the U.S. Court of Federal Claims.
Continue Your Research
NAICS 518210 — Data Processing, Hosting, and Related Services
Find federal contracts under NAICS 518210. Common agencies, set-asides, contract values.
NAICS 541330 — Engineering Services
Find federal contracts under NAICS 541330. Common agencies, set-asides, contract values.
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