Subcontractor Nonpayment on Federal Work: FAR 32.112 Guide
Subcontractors and suppliers on federal construction projects often face intense cash strain when a prime contractor withholds money. While trade subcontractors do not have direct privity of contract with the federal government, federal acquisition regulations establish clear avenues to address nonpayment. Through specific statutory procedures, subcontractors can verify whether the prime has received progress disbursements and report nonpayment directly to the contracting officer.
Requesting Information Under FAR 32.112-2
When payments stall, subcontractors often wonder whether the government has actually released project funds to the prime contractor. Under FAR 32.112-2, trade contractors have a formal path to find out. Enacted in accordance with section 806(a)(1) of Public Law 102-190, as amended by sections 2091 and 8105 of Public Law 103-355 (10 U.S.C. 4601 note prec.), this provision entitles subcontractors and suppliers to direct payment transparency.
Upon receiving an inquiry from a subcontractor or supplier on a federal contract other than for a commercial product or commercial service, the contracting officer shall promptly disclose two specific facts:
- Whether the prime contractor has submitted requests for progress payments or other payments to the Federal Government under the contract.
- Whether final payment under the contract has been made by the Federal Government to the prime contractor.
The only exception provided in the regulation relates to classified matters. In accordance with 5 U.S.C. 552(b)(1), this disclosure rule does not apply to matters that an Executive order specifically authorizes to be kept classified in the interest of national defense or foreign policy.
Asserting Nonpayment Under FAR 32.112-1
If payment has not been received in accordance with your agreed subcontract terms, trade contractors can take the next step by contacting the contracting officer directly. Under FAR 32.112-1, which implements Section 806(a)(4) of Public Law 102-190 as amended by Sections 2091 and 8105 of Public Law 103-355 (10 U.S.C. 4601 note prec.), an unpaid subcontractor or supplier can submit an assertion of nonpayment.
This process applies when a subcontractor or supplier asserts that the prime contractor has failed to pay in accordance with the payment terms established in the subcontract, purchase order, or other binding agreement. Proper recordkeeping and documenting written terms before project kickoffâsuch as outlining payment timing within your bid exclusions and clarificationsâprovide crucial support when establishing whether the prime has violated your agreement.
What the Contracting Officer May Determine
Once a subcontractor submits an assertion of nonpayment, the contracting officer has the authority to make several formal determinations under FAR 32.112-1:
- Construction Progress Payments: For a construction contract, the contracting officer may determine whether the contractor has made progress payments to the subcontractor or supplier in compliance with Chapter 39 of Title 31, United States Code (Prompt Payment Act).
- Construction Final Payments: For a construction contract, the contracting officer may examine whether final payment was delivered to the subcontractor or supplier in compliance with the terms of the subcontract, purchase order, or other agreement.
- Non-Construction Agreements: For contracts other than construction, the contracting officer may evaluate whether progress, final, or other payments comply with the purchase order or subcontract terms.
- Contractor Payment Certifications: For any contract, the contracting officer may determine whether the prime contractor's certification of payment accompanying its payment request to the Government is accurate.
Contracting Officer Remedies and Actions
Depending on the nature of the prime contractor's failure, the contracting officer has distinct authorities ranging from discretionary remedies to mandatory administrative action.
If the contracting officer determines that the prime contractor has failed to comply with payment obligations under a construction or non-construction subcontract, the contracting officer may take either of two discretionary actions:
- Encourage the contractor to make timely payment to the subcontractor or supplier.
- Reduce or suspend progress payments to the prime contractor, if authorized by the applicable contract payment clauses.
Understanding these withholding mechanisms helps subcontractors understand the broader framework governing federal project disbursements, similar to how agencies and general contractors handle standard withholding practices such as retainage during construction.
In contrast to discretionary encouragement or payment reductions, the rule establishes a mandatory requirement when false statements are involved. If the contracting officer determines that the prime contractor's payment certification accompanying its government invoice is inaccurate in any material respect, the contracting officer shall initiate administrative or other remedial action.
Quick Reference: Assertions vs. Information Requests
Subcontractors navigating federal payment disputes can use this quick-reference summary to choose the right path:
- FAR 32.112-2 (Information Requests): Subcontractors ask if the prime submitted payment requests or received final payment. The contracting officer is mandated to promptly advise the subcontractor (unless classified under Executive order).
- FAR 32.112-1 (Nonpayment Assertions): Subcontractors report that they have not been paid under their subcontract or purchase order. The contracting officer may evaluate Prompt Payment Act compliance or subcontract terms, may urge payment or withhold progress funds, and must take remedial action if the prime submitted a materially inaccurate certification.
Sources
- Acquisition.GOV: FAR 32.112-1 Subcontractor assertions of nonpayment
- Acquisition.GOV: FAR 32.112-2 Subcontractor requests for information
Published October 30, 2026. No affiliate links on this page. Facts come from the sources linked above; check them for updates.