FAR 52.232-25 — Prompt Payment
What It Is
FAR 52.232-25 implements the Prompt Payment Act for most fixed-price contracts. It establishes when the government must pay a proper invoice — generally 30 days after the designated billing office receives a proper invoice (or after acceptance, if later), with a 7-day rule for certain perishables and accelerated rules elsewhere — and it requires the government to pay an interest penalty automatically if it pays late. The clause also defines what makes an invoice 'proper' (the elements that must be present, such as the contract number, an itemized description, and remittance information); an improper invoice can be returned, which resets the clock. It complements the EFT payment clause (FAR 52.232-33), which controls how the money actually moves.
When It Applies
- Most fixed-price supply and service contracts, including commercial buys (incorporated via FAR 52.212-5).
- Every time the contractor submits an invoice for payment against the contract.
- Together with FAR 52.232-33 (Payment by EFT—SAM), which determines the banking details payment is routed to.
Key Provisions
| Provision | What It Means |
|---|---|
| 30-day due date | Payment is generally due 30 days after the billing office receives a proper invoice (or after government acceptance, whichever is later), with special faster timelines for some items. |
| Proper invoice | Defines the elements an invoice must contain to be 'proper'; missing elements let the government return it and restart the payment clock. |
| Automatic interest penalty | If the government pays late, it owes an interest penalty at the Treasury-set rate without the contractor having to request it. |
| Acceptance can govern timing | When acceptance occurs after invoice receipt, the due date can run from acceptance — so delivery/acceptance timing affects when you get paid. |
What It Means for an SDVOSB
Cash flow makes or breaks small primes, so the Prompt Payment clause is one of the most practically important clauses you perform under. The single biggest lever in your control is submitting a proper invoice — get the required elements right the first time, because a returned invoice resets the 30-day clock and delays payment. Know that the due date can run from acceptance, and that the government owes you automatic interest if it pays late. Pair this with accurate SAM banking details under FAR 52.232-33 so payment is not held up by a routing problem.
Common Pitfalls
- Submitting an improper invoice (missing required elements) that the government returns, restarting the 30-day clock.
- Assuming the clock always runs from invoice receipt when acceptance occurring later can govern the due date.
- Not claiming or tracking the automatic late-payment interest the government owes when it pays past the due date.
Frequently Asked
How fast does the government have to pay an SDVOSB's invoice?
Under FAR 52.232-25, the government must generally pay a proper invoice within 30 days of the designated billing office receiving it, or within 30 days of acceptance if acceptance is later (with shorter timelines for certain items like perishables). If it pays late, the Prompt Payment Act requires it to pay an interest penalty automatically. The key contractor-side variable is submitting a 'proper' invoice with all required elements so the clock actually starts.
What makes an invoice 'proper' under the Prompt Payment clause?
FAR 52.232-25 lists the elements a proper invoice must contain — typically the contractor name and address, the contract and order number, an itemized description of the supplies or services and amounts, the payment terms, and remittance and point-of-contact information. If any required element is missing, the government may return the invoice as improper, which delays payment because the 30-day clock restarts when a corrected proper invoice is received.
Primary Sources
Plain-English reference, not legal advice. Which clauses apply, and in which version, is set by the specific solicitation, and the FAR is periodically amended — always read the actual clause text in your solicitation and confirm its application with your contracting officer before relying on this.
Change log (1)
- LaunchedPublished the federal contract clauses reference covering the standard FAR Part 52 clauses an SDVOSB encounters in a set-aside contract — the SDVOSB set-aside clause (52.219-27), limitations on subcontracting (52.219-14), utilization of small business concerns (52.219-8), the reps-and-certs provisions (52.204-8 / 52.212-3), the commercial terms clauses (52.212-4 / 52.212-5), Changes (52.243-1), Termination for Convenience and Default (52.249-2 / 52.249-8), Prompt Payment and EFT payment (52.232-25 / 52.232-33), Service Contract Labor Standards (52.222-41), and basic cybersecurity safeguarding (52.204-21) — each with a key-provisions table, common pitfalls, an SDVOSB-specific angle, FAQPage, Legislation, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, forms reference, contract types, regulation explainers, how-to guides, FAQ, and the limitations-on-subcontracting and price-to-win calculators.