Total excess funding remains in the amount of $10,118.31 on a completed order. Funds need to be de-obligated under this order. Contract award is $742,608.72, total amount paid by DFAS to date is $732,490.41 which included a prompt pay discount of $118.31.
Contractor stated that prompt pay discounts are not to impact funding of a contract or task order. Prompt pay discounts are taken by the payment offices from a separate source of money not directly tied to any specific contract.
Question: Are prompt payment discount savings subject to de-obligation under an order for closeout?
I research the FMR (Volume 10 Chapter 7) and OMB's (Title 5 CFR 1317.7) and multiple sections of the FAR. These sources do not provide a definitive answer for all prompt payment discounts. The FMR Volume 10 Chapter 7 Paragraph H address voluntary discounts after a contract is completed and paid.
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"In rare instances, the contractor may offer a voluntary discount after a contract is completed, including final payment. These discounts are distinguished from early payment and volume discounts in that voluntary discounts are discretionary with the contractor and do not reduce the amount obligated against the paying appropriation. Do not treat discounts received after payment as rebates. Such discounts should be deposited in the Miscellaneous Receipts Account of the United States Treasury."
Since the requestor was not specific about when the discount was offered, a link is provided to a similar question that was answered by AAP in 2011. It provides thorough detail on the process to deal with the remaining funds due to discounts.