48 C.F.R. PART 232—CONTRACT FINANCING
Title 48 - Federal Acquisition Regulations System
Authority: 41 U.S.C. 421 and 48 CFR chapter 1.
Source: 56 FR 36409, July 31, 1991, unless otherwise noted.
Incremental funding means the partial funding of a contract or an exercised option, with additional funds anticipated to be provided at a later time. [71 FR 18673, Apr. 12, 2006] Departments and agencies in accordance with department/agency procedures, shall prepare and submit to the Under Secretary of Defense (Acquisition, Technology, and Logistics), through the Director of Defense Procurement and Acquisition Policy, annual reports (Report Control Symbol DD-AT&L(A) 1891) containing the information required by FAR 32.006–5. [63 FR 11535, Mar. 9, 1998, as amended at 65 FR 39705, June 27, 2000; 68 FR 7440, Feb. 14, 2003] (a) DoD policy is to make contract financing payments as quickly as possible. Generally, the contracting officer shall insert the standard due dates of 7 days for progress payments, and 14 days for performance-based payments and interim payments on cost-type contracts, in the appropriate paragraphs of the respective payment clauses. For interim payments on cost-reimbursement contracts for services, see 232.906(a)(i). (b) The contracting officer should coordinate contract financing payment terms with offices that will be involved in the payment process to ensure that specified terms can be met. Where justified, the contracting officer may insert a due date greater than, but not less than, the standard. In determining payment terms, consider— (i) Geographical separation; (ii) Workload; (iii) Contractor ability to submit a proper request; and (iv) Other factors that could affect timing of payment. [70 FR 75412, Dec. 20, 2005] (a) The Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics) (OUSD(AT&L)DPAP) is responsible for ensuring uniform administration of DoD contract financing, including DoD contract financing policies and important related procedures. Agency discretion under FAR part 32 is at the DoD level and is not delegated to the departments and agencies. Proposals by the departments and agencies, to exercise agency discretion, shall be submitted to OUSD(AT&L)DPAP. (b) Departments and agencies are responsible for their day-to-day contract financing operations. Refer specific cases involving financing policy or important procedural issues to OUSD(AT&L)DPAP for consideration through the department/agency Contract Finance Committee members (also see Subpart 204.1 for deviation request and approval procedures). (c) See PGI 232.070(c) for information on department/agency contract financing offices. [63 FR 11535, Mar. 9, 1998, as amended at 65 FR 39705, June 27, 2000; 68 FR 7440, Feb. 14, 2003; 70 FR 75412, Dec. 20, 2005] Use the policies and procedures in this section in determining the financial capability of current or prospective contractors. [63 FR 11535, Mar. 9, 1998] The contracting officer shall perform a financial review when the contracting officer does not otherwise have sufficient information to make a positive determination of financial responsibility. In addition, the contracting officer shall consider performing a financial review— (a) Prior to award of a contract, when— (1) The contractor is on a list requiring preaward clearance or other special clearance before award; (2) The contractor is listed on the Consolidated List of Contractors Indebted to the Government (Hold-Up List), or is otherwise known to be indebted to the Government; (3) The contractor may receive Government assets such as contract financing payments or Government property; (4) The contractor is experiencing performance difficulties on other work; or (5) The contractor is a new company or a new supplier of the item. (b) At periodic intervals after award of a contract, when— (1) Any of the conditions in paragraphs (a)(2) through (a)(5) of this subsection are applicable; or (2) There is any other reason to question the contractor's ability to finance performance and completion of the contract. [63 FR 11535, Mar. 9, 1998] (a) The contracting officer shall obtain the type and depth of financial and other information that is required to establish a contractor's financial capability or disclose a contractor's financial condition. While the contracting officer should not request information that is not necessary for protection for the Government's interests, the contracting officer must insist upon obtaining the information that is necessary. The unwillingness or inability of a contractor to present reasonably requested information in a timely manner, especially information that a prudent business person would be expected to have and to use in the professional management of a business, may be a material fact in the determination of the contractor's responsibility and prospects for contract completion. (b) The contracting officer shall obtain the following information to the extent required to protect the Government's interest. In addition, if the contracting officer concludes that information not listed in paragraphs (b)(1) through (b)(10) of this subsection is required to comply with 232.072–1, that information should be requested. The information must be for the person(s) who are legally liable for contract performance. If the contractor is not a corporation, the contracting officer shall obtain the required information for each individual/joint venturer/partner: (1) Balance sheet and income statement— (i) For the current fiscal year (interim); (ii) For the most recent fiscal year and, preferably, for the 2 preceding fiscal years. These should be certified by an independent public accountant or by an appropriate officer of the firm; and (iii) Forecasted for each fiscal year for the remainder of the period of contract performance. (2) Summary history of the contractor and its principal managers, disclosing any previous insolvencies—corporate or personal, and describing its products or services. (3) Statement of all affiliations disclosing— (i) Material financial interests of the contractor; (ii) Material financial interests in the contractor; (iii) Material affiliations of owners, officers, directors, major stockholders; and (iv) The major stockholders if the contractor is not a widely-traded, publicly-held corporation. (4) Statement of all forms of compensation to each officer, manager, partner, joint venturer, or proprietor, as appropriate— (i) Planned for the current year; (ii) Paid during the past 2 years; and (iii) Deferred to future periods. (5) Business base and forecast that— (i) Shows, by significant markets, existing contracts and outstanding offers, including those under negotiation; and (ii) Is reconcilable to indirect cost rate projections. (6) Cash forecast for the duration of the contract (see 232.072–3). (7) Financing arrangement information that discloses— (i) Availability of cash to finance contract performance; (ii) Contractor's exposure to financial crisis from creditor's demands; (iii) Degree to which credit security provisions could conflict with Government title terms under contract financing; (iv) Clearly stated confirmations of credit with no unacceptable qualifications; (v) Unambiguous written agreement by a creditor if credit arrangements include deferred trade payments or creditor subordinations/repayment suspensions. (8) Statement of all state, local, and Federal tax accounts, including special mandatory contributions, e.g., environmental superfund. (9) Description and explanation of the financial effect of issues such as— (i) Leases, deferred purchase arrangements, or patent or royalty arrangements; (ii) Insurance, when relevant to the contract; (iii) Contemplated capital expenditures, changes in equity, or contractor debt load; (iv) Pending claims either by or against the contractor; (v) Contingent liabilities such as guarantees, litigation, environmental, or product liabilities; (vi) Validity of accounts receivable and actual value of inventory, as assets; and (vii) Status and aging of accounts payable. (10) Significant ratios such as— (i) Inventory to annual sales; (ii) Inventory to current assets; (iii) Liquid assets to current assets; (iv) Liquid assets to current liabilities; (v) Current assets to current liabilities; and (vi) Net worth to net debt. [63 FR 11535, Mar. 9, 1998] (a) A contractor must be able to sustain a sufficient cash flow to perform the contract. When there is doubt regarding the sufficiency of a contractor's cash flow, the contracting officer should require the contractor to submit a cash flow forecast covering the duration of the contract. (b) A contractor's inability of refusal to prepare and provide cash flow forecasts or to reconcile actual cash flow with previous forecasts is a strong indicator of serious managerial deficiencies or potential contract cost or performance problems. (c) Single or one-time cash flow forecasts are of limited forecasting power. As such, they should be limited to preaward survey situations. Reliability of cash flow forecasts can be established only by comparing a series of previous actual cash flows with the corresponding forecasts and examining the causes of any differences. (d) Cash flow forecasts must— (1) Show the origin and use of all material amounts of cash within the entire business unit responsible for contract performance, period by period, for the length of the contract (or until the risk of a cash crisis ends); and (2) Provide an audit trail to the data and assumptions used to prepare it. (e) Cash flow forecasts can be no more reliable than the assumptions on which they are based. Most important of these assumptions are— (1) Estimated amounts and timing of purchases and payments for materials, parts, components, subassemblies, and services; (2) Estimated amounts and timing of payments of purchase or production of capital assets, test facilities, and tooling; (3) Amounts and timing of fixed cash charges such as debt installments, interest, rentals, taxes, and indirect costs; (4) Estimated amounts and timing of payments for projected labor, both direct and indirect; (5) Reasonableness of projected manufacturing and production schedules; (6) Estimated amounts and timing of billings to customers (including progress payments), and customer payments; (7) Estimated amounts and timing of cash receipts from lenders or other credit sources, and liquidation of loans; and (8) Estimated amount and timing of cash receipt from other sources. (f) The contracting officer should review the assumptions underlying the cash flow forecasts. In determining whether the assumptions are reasonable and realistic, the contracting officer should consult with— (1) The contractor; (2) Government personnel in the areas of finance, engineering, production, cost, and price analysis; or (3) Prospective supply, subcontract, and loan or credit sources. [63 FR 11536, Mar. 9, 1998] Source: 63 FR 11536, Mar. 9, 1998, unless otherwise noted.
(e)(2) Progress payments based on percentage or stage of completion are authorized only for contracts for construction (as defined in FAR 36.102), shipbuilding, and ship conversion, alteration, or repair. However, percentage or state of completion methods of measuring contractor performance may be used for performance-based payments in accordance with FAR Subpart 32.10. (a) The contracting officer may establish provisional delivery payments to pay contractors for the costs of supplies and services delivered to and accepted by the Government under the following contract actions if undefinitized: (1) Letter contracts contemplating a fixed-price contract. (2) Orders under basic ordering agreements. (3) Spares provisioning documents annexed to contracts. (4) Unpriced equitable adjustments on fixed-price contracts. (5) Orders under indefinite-delivery contracts. (b) Provisional delivery payments shall be— (1) Used sparingly; (2) Priced conservatively; and (3) Reduced by liquidating previous progress payments in accordance with the Progress Payments clause. (c) Provisional delivery payments shall not— (1) Include profit; (2) Exceed funds obligated for the undefinitized contract action; or (3) Influence the definitized contract price. (b) Use the clause at FAR 52.232–7, Payments under Time-and-Materials and Labor-Hour Contracts, with 252.232–7006, Alternate A, in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated. (i) Alternate A permits the administrative contracting officer (ACO) to withhold 5 percent of the amounts due until a reserve is set aside in an amount the ACO considers to be necessary, but not to exceed $50,000, to protect the Government's interests. (ii) Normally, there should be no need to withhold payment for a contractor with a record of timely submittal of the release discharging the Government from all liabilities, obligations, and claims. (iii) If the ACO determines that it is necessary to withhold payment to protect the Government's interests, the ACO shall unilaterally issue a modification requiring the contractor to withhold 5 percent of amounts due, up to a maximum of $50,000. The ACO shall ensure that the modification specifies the percentage and total amount of the withhold. [68 FR 69632, Dec. 15, 2003] Source: 63 FR 11537, Mar. 9, 1998, unless otherwise noted.
(a)(2) When determining whether an offeror's financial condition is adequate security, see 232.072–2 and 232.072–3 for guidance. It should be noted that an offeror's financial condition may be sufficient to make the contractor responsible for award purposes, but may not be adequate security for commercial contract financing. (f) Prompt payment for commercial purchase payments. The contracting officer shall incorporate the following standard prompt payment terms for commercial item contract financing: (i) Commercial advance payments: The contractor entitlement date specified in the contract, or 30 days after receipt by the designated billing office of a proper request for payment, whichever is later. (ii) Commercial interim payments: The contractor entitlement date specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later. The prompt payment standards for commercial delivery payments shall be the same as specified in FAR Subpart 32.9 for invoice payments for the item delivered. (g) Installment payment financing for commercial items. Installment payment financing shall not be used for DoD contracts, unless market research has established that this form of contract financing is both appropriate and customary in the commercial marketplace. When installment payment financing is used, the contracting officer shall use the ceiling percentage of contract price that is customary in the particular marketplace (not to exceed the maximum rate established in FAR 52.232–30). [63 FR 11537, Mar. 9, 1998, as amended at 70 FR 75413, Dec. 20, 2005] (a) The use of guaranteed loans as a contract financing mechanism requires the availability of certain congressional authority. The DoD has not requested such authority in recent years, and none is now available. (a)(9) The requirements of FAR subpart 32.4 do not apply to advertisements in high school and college publications for military recruitment efforts under 10 U.S.C. 503 when the contract cost does not exceed $2,500. [56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005] Follow the procedures at PGI 232.409–1 for preparation of the documents required by FAR 32.409–1(e) and (f). [70 FR 75413, Dec. 20, 2005] If an advance payment procedure is used without a special bank account, follow the procedures at PGI 232.410. [70 FR 75413, Dec. 20, 2005] (a) Use the clause at 252.232–7000, Advance Payment Pool, in any contract that will be subject to the terms of an advance payment pool agreement with a nonprofit organization or educational institution. Normally, use the clause in all cost reimbursement type contracts with the organization or institution. (b) Use the clause at 252.232–7001, Disposition of Payments, in contracts when payments under the contract are to be made by a disbursing office not designated in the advance payment pool agreement. (c) Use the clause at 252.232–7005, Reimbursement of Subcontractor Advance Payments-DoD Pilot Mentor-Protege Program, when advance payments will be provided by the contractor to a subcontractor pursuant to an approved mentor-protege agreement (See subpart 219.71). [56 FR 36409, July 31, 1991, as amended at 56 FR 67217, Dec. 30, 1991] (a) An advance payment pool agreement— (1) Is a means of financing the performance of more than one contract held by a single contractor; (2) Is especially convenient for the financing of cost-type contracts with nonprofit educational or research institutions for experimental or research and development work when several contracts require financing by advance payments. When appropriate, pooled advance payments may also be used to finance other types of contracts held by a single contractor; and (3) May be established— (i) Without regard to the number of appropriations involved; (ii) To finance contracts for one or more department(s) or contracting activity(ies); or (iii) In addition to any other advance payment pool agreement at a single contractor location when it is more convenient or otherwise preferable to have more than one agreement. (a) The customary progress payment rates for DoD contracts, including contracts that contain foreign military sales (FMS) requirements, are 80 percent for large business concerns, 90 percent for small business concerns, and 95 percent for small disadvantaged business concerns. [66 FR 49865, Oct. 1, 2001] Follow the procedures at PGI 232.501–2 for approval of unusual progress payments. [70 FR 75413, Dec. 20, 2005] (b) The contracting officer may approve progress payments when the contract price exceeds the funds obligated under the contract, provided the contract limits the Government's liability to the lesser of— (i) The applicable rate (i.e., the lower of the progress payment rate, the liquidation rate, or the loss-ratio adjusted rate); or (ii) 100 percent of the funds obligated. [56 FR 36409, July 31, 1991, as amended at 65 FR 39722, June 27, 2000; 70 FR 75413, Dec. 20, 2005] (b)(1) If the contractor is a small disadvantaged business, progress payments may be provided when the contract will involve $50,000 or more. (a) Use the clause at 252.232–7002, Progress Payments for Foreign Military Sales Acquisitions, in solicitations and contracts that— (i) Contain FMS requirements; and (ii) Provide for progress payments. (b) Use the clause at 252.232–7004, DoD Progress Payment Rates, instead of Alternate I of the clause at FAR 52.232–16, if the contractor is a small business or small disadvantaged business concern. [56 FR 36409, July 31, 1991, as amended at 56 FR 67217, Dec. 30, 1991; 64 FR 8731, Feb. 23, 1999; 65 FR 39722, June 27, 2000; 66 FR 49865, Oct. 1, 2001] (b) Contractor noncompliance. See also 242.7503. (g) Loss contracts. Use the following loss ratio adjustment procedures for making adjustments required by FAR 32.503–6(f) and (g)— (i) Except as provided in paragraph (g)(ii) of this subsection, the contracting officer must prepare a supplementary analysis of the contractor's request for progress payments and calculate the loss ratio adjustment using the procedures in FAR 32.503–6(g). (ii) The contracting officer may request the contractor to prepare the supplementary analysis as an attachment to the progress payment request when the contracting officer determines that the contractor's methods of estimating the “Costs to Complete” are reliable, accurate, and not susceptible to improper influences. (iii) To maintain an audit trail and permit verification of calculations, do not make the loss ratio adjustments by altering or replacing data on the contractor's original request for progress payment (SF 1443, Contractor's Request for Progress Payment, or computer generated equivalent). [56 FR 36409, July 31, 1991, as amended at 60 FR 29499, June 5, 1995; 65 FR 39722, June 27, 2000] (d) An administrative contracting officer (ACO) determination that the contractor's material management and accounting system conforms to the standard at 252.242–7004(e)(7) constitutes the contracting officer approval requirement of FAR 32.503–15(d). Prior to granting blanket approval of cost transfers between contracts, the ACO should determine that— (i) The contractor retains records of the transfer activity that took place in the prior month; (ii) The contractor prepares, at least monthly, a summary of the transfer activity that took place in the prior month; and (iii) The summary report includes as a minimum, the total number and dollar value of transfers. [56 FR 36409, July 31, 1991, as amended at 57 FR 42632, Sept. 15, 1992; 70 FR 75413, Dec. 20, 2005] (b) Disbursing officers are those officials designated to make payments under a contract or to receive payments of amounts due under a contract. The disbursing officer is responsible for determining the amount and collecting contract debts whenever overpayments or erroneous payments have been made. The disbursing officer also has primary responsibility when the amounts due and dates for payment are contained in the contract, and a copy of the contract has been furnished to the disbursing officer with notice to collect as amounts become due. [56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005] When transferring a case to the contract financing office, follow the procedures at PGI 232.606. [70 FR 75413, Dec. 20, 2005] When issuing a demand for payment of a contract debt, follow the procedures at PGI 232.610. [70 FR 75413, Dec. 20, 2005] Only the department/agency contract financing offices (see 232.070(c)) are authorized to compromise debts covered by this subpart. [56 FR 36409, July 31, 1991, as amended at 70 FR 75413, Dec. 20, 2005] (a) The Director of Defense Procurement and Acquisition Policy, Office of the Under Secretary of Defense (Acquisition, Technology, and Logistics), may exempt the contracts in FAR 32.617(a)(2) through (5) and other contracts, in exceptional circumstances, from the administrative interest charges required by this subpart. (7) Other exceptions are— (A) Contracts for instructions of military or ROTC personnel at civilian schools, colleges, and universities; (B) Basic agreements with telephone companies for communications services and facilities, and purchases under such agreements; and (C) Transportation contracts with common carriers for common carrier services. [70 FR 75413, Dec. 20, 2005] Follow the procedures at PGI 232.670 for transferring responsibility for debt collection. [70 FR 75413, Dec. 20, 2005] Follow the procedures at PGI 232.671 for bankruptcy reporting. [70 FR 75413, Dec. 20, 2005] Source: 58 FR 46092, Sept. 1, 1993, unless otherwise noted.
Fixed-price contracts shall be fully funded except as permitted by 232.703–1. (1) A fixed-price contract may be incrementally funded only if— (i) The contract (excluding any options) or any exercised option— (A) Is for severable services; (B) Does not exceed one year in length; and (C) Is incrementally funded using funds available (unexpired) as of the date the funds are obligated; or (ii) The contract uses funds available from multiple (two or more) fiscal years and— (A) The contract is funded with research and development appropriations; or (B) Congress has otherwise authorized incremental funding. (2) An incrementally funded fixed-price contract shall be fully funded as soon as funds are available. [71 FR 18673, Apr. 12, 2006] (b) The contracting officer may enter into a contract, exercise an option, or place an order under a contract for severable services for a period that begins in one fiscal year and ends in the next fiscal year if the period of the contract awarded, option exercised, or order placed does not exceed 1 year (10 U.S.C. 2410a). [64 FR 28110, May 25, 1999] Annual military construction appropriations acts restrict the use of funds appropriated by the acts for payments under cost-plus-fixed-fee contracts (see 216.306(c)). [61 FR 7744, Feb. 29, 1996] (a) Upon receipt of the contractor's notice under paragraph (c) of the clause at 252.232–7007, Limitation of Government's Obligation, the contracting officer shall promptly provide written notice to the contractor that the Government is— (1) Allotting additional funds for continued performance and increasing the Government's limitation of obligation in a specified amount; (2) Terminating the contract; or (3) Considering whether to allot additional funds; and (i) The contractor is entitled by the contract terms to stop work when the Government's limitation of obligation is reached; and (ii) Any costs expended beyond the Government's limitation of obligation are at the contractor's risk. (b) Upon learning that the contract will receive no further funds, the contracting officer shall promptly give the contractor written notice of the Government's decision and terminate for the convenience of the Government. (c) The contracting officer shall ensure that, in accordance with paragraph (b) of the clause at 252.232–7007, Limitation of Government's Obligation, sufficient funds are allotted to the contract to cover the total amount payable to the contractor in the event of termination for the convenience of the Government. Use the clause at 252.232–7007, Limitation of Government's Obligation, in solicitations and resultant incrementally funded fixed-price contracts. The contracting officer may revise the contractor's notification period, in paragraph (c) of the clause, from “ninety” to “thirty” or “sixty” days, as appropriate. (b) Only contracts for personal services may prohibit the assignment of claims. (d) Pursuant to Section 3737(e) of the Revised Statutes (41 U.S.C. 15), and in accordance with Presidential delegation dated October 3, 1995, Secretary of Defense delegation dated February 5, 1996, and Under Secretary of Defense (Acquisition, Technology, and Logistics) delegation dated February 23, 1996, the Director of Defense Procurement determined on May 10, 1996, that a need exists for DoD to agree not to reduce or set off any money due or to become due under the contract when the proceeds under the contract have been assigned in accordance with the Assignment of Claims provision of the contract. This determination was published in the [56 FR 36409, July 31, 1991, as amended at 61 FR 50454, Sept. 26, 1996; 65 FR 39706, June 27, 2000] (b) The assignee shall forward— (i) To the administrative contracting officer (ACO), a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The ACO shall acknowledge receipt by signing and dating all copies of the notice of assignment and shall— (A) File the true copy of the instrument of assignment and the original of the notice in the contract file; (B) Forward two copies of the notice to the disbursing officer of the payment office cited in the contract; (C) Return a copy of the notice to the assignee; and (D) Advise the contracting officer of the assignment. (ii) To the surety or sureties, if any, a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The surety shall return three acknowledged copies of the notice to the assignee, who shall forward two copies to the disbursing officer designated in the contract. (iii) To the disbursing officer of the payment office cited in the contract, a true copy of the instrument of assignment and an original and one copy of the notice of assignment. The disbursing officer shall acknowledge and return to the assignee the copy of the notice and shall file the true copy of the instrument and original notice. (a)(1) Use the clause at 252.232–7008, Assignment of Claims (Overseas), instead of the clause at FAR 52.232–23, Assignment of Claims, in solicitations and contracts when contract performance will be in a foreign country. (2) Use Alternate I with the clause at FAR 52.232–23, Assignment of Claims, unless otherwise authorized under 232.803(d). [62 FR 34126, June 24, 1997] DoD policy is to assist small disadvantaged business concerns by paying them as quickly as possible after invoices are received and before normal payment due dates established in the contract (see 232.906(a)). [70 FR 75413, Dec. 20, 2005] (d) In most cases, Government acceptance or approval can occur within the 7-day constructive acceptance period specified in the FAR Prompt Payment clauses. Government payment of construction progress payments can, in most cases, be made within the 14-day period allowed by the Prompt Payment for Construction Contracts clause. While the contracting officer may specify a longer period because the period specified in the contract is not reasonable or practical, such change should be coordinated with the Government offices responsible for acceptance or approval and for payment. Reasons for specifying a longer period include but are not limited to: the nature of the work or supplies or services, inspection or testing requirements, shipping and acceptance terms, and resources available at the acceptance activity. A constructive acceptance period of less than the cited 7 or 14 days is not authorized. [70 FR 75413, Dec. 20, 2005] (a)(i) Generally, the contracting officer shall insert the standard due date of 14 days for interim payments on cost-reimbursement contracts for services in the clause at FAR 52.232–25, Prompt Payment, when using the clause with its Alternate I. (ii) The restrictions of FAR 32.906 prohibiting early payment do not apply to invoice payments made to small disadvantaged business concerns. However, contractors shall not be entitled to interest penalties if the Government fails to make early payment. [70 FR 75413, Dec. 20, 2005] Source: 63 FR 11537, Mar. 9, 1998, unless otherwise noted.
(d) The contracting officer shall use the following standard prompt payment terms for performance-based payments: The contractor entitlement date, if any, specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later. (c) Instructions for multiple appropriations. If the contract contains foreign military sales requirements, the contracting officer shall provide instructions for distribution of the contract financing payments to each country's account. Source: 65 FR 46626, July 31, 2000, unless otherwise noted.
Use the clause at 252.232–7009, Mandatory Payment by Governmentwide Commercial Purchase Card, in solicitations, contracts, and agreements when— (1) Placement of orders or calls valued at or below the micropurchase threshold is anticipated; and (2) Payment by Governmentwide commercial purchase card is required for orders or calls valued at or below the micropurchase threshold under the contract or agreement. Source: 68 FR 8455, Feb. 21, 2003, unless otherwise noted.
This subpart prescribes policies and procedures for submitting and processing payment requests in electronic form to comply with 10 U.S.C. 2227. Electronic form and payment request, as used in this subpart, are defined in the clause at 252.232–7003, Electronic Submission of Payment Requests. (a) Contractors shall submit payment requests in electronic form, except for— (1) Purchases paid for with a Governmentwide commercial purchase card; (2) Awards made to foreign vendors for work performed outside the United States; (3) Classified contracts or purchases (see FAR 4.401) when electronic submission and processing of payment requests could compromise the safeguarding of classified information or national security; (4) Contracts awarded by deployed contracting officers in the course of military operations, including, but not limited to, contingency operations as defined in 10 U.S.C. 101(a)(13) or humanitarian or peacekeeping operations as defined in 10 U.S.C. 2302(7), or contracts awarded by contracting officers in the conduct of emergency operations, such as responses to natural disasters or national or civil emergencies; (5) Purchases to support unusual or compelling needs of the type described in FAR 6.302–2; and (6) Cases where— (i) The contractor is unable to submit, or DOD is unable to receive, a payment request in electronic form; and (ii) The contracting officer, the payment office, the contract administration office, and the contractor mutually agree to an alternative method. (b) DoD officials receiving payment requests in electronic form shall process the payment requests in electronic form. Any supporting documentation necessary for payment, such as receiving reports, contracts, contract modifications, and required certifications, also shall be processed in electronic form. Scanned documents are acceptable forms for processing supporting documentation. [68 FR 8455, Feb. 21, 2003, as amended at 68 FR 69630, Dec. 15, 2003] (a) The accepted electronic forms for transmission are— (1) Wide Area WorkFlow-Receipt and Acceptance (see Web site—https://wawf.eb.mil); (2) Web Invoicing System (see Web site—https://ecweb.dfas.mil); and (3) American National Standards Institute (ANSI) X.12 electronic data interchange (EDI) formats (see Web site—http://www.X12.org for information on EDI formats; see Web site—http://www.dod.mil/dfas/ for EDI implementation guides). (b) If the payment office and the contract administration office concur, the contracting officer may authorize a contractor to submit a payment request using an electronic form other than those listed in paragraph (a) of this section. [62 FR 1059, Jan. 8, 1997, as amended at 69 FR 1926, Jan. 13, 2004; 71 FR 27644, May 12, 2006] Except as provided in 232.7002(a), use the clause at 252.232–7003, Electronic Submission of Payment Requests, in solicitations and contracts. Source: 70 FR 52032, Sept. 1, 2005, unless otherwise noted.
This subpart prescribes policies and procedures concerning the effect of levies pursuant to 26 U.S.C. 6331(h) on contract payments. The Internal Revenue Service (IRS) is authorized to levy up to 100 percent of all payments made under a DoD contract, up to the amount of the tax debt. (a) The contracting officer shall require the contractor to— (1) Promptly notify the contracting officer when a levy that will jeopardize contract performance is imposed on a DoD contract; and (2) Advise the contracting officer whether the inability to perform may adversely affect national security. (b) The contracting officer shall promptly notify the Director, Defense Procurement and Acquisition Policy (DPAP), when the contractor's inability to perform will adversely affect national security or will result in significant additional costs to the Government. Follow the procedures at PGI 232.7101(b) for reviewing the contractor's rationale and submitting the required notification. (c) The Director, DPAP, will promptly review the contractor's rationale and will notify the IRS, the contracting officer, and/or the payment office in accordance with the procedures at PGI 232.7101(c). The contracting officer shall then notify the contractor in accordance with paragraph (c) of the clause at 252.232–7010. Use the clause at 252.232–7010, Levies on Contract Payments, in all solicitations and contracts.
Title 48: Federal Acquisition Regulations System
PART 232—CONTRACT FINANCING
Section Contents
232.001 Definitions.
232.006 Reduction or suspension of contract payments upon finding of fraud.
232.006-5 Reporting.
232.007 Contract financing payments.
232.070 Responsibilities.
232.071 [Reserved]
232.072 Financial responsibility of contractors.
232.072-1 Required financial reviews.
232.072-2 Appropriate information.
232.072-3 Cash flow forecasts.
232.102 Description of contract financing methods.
232.102-70 Provisional delivery payments.
232.111 Contract clauses for non-commercial purchases.
232.202-4 Security for Government financing.
232.206 Solicitation provisions and contract clauses.
232.302 Authority.
232.404 Exclusions.
232.409 Contracting officer action.
232.409-1 Recommendation for approval.
232.410 Findings, determination, and authorization.
232.412 Contract clause.
232.412-70 Additional clauses.
232.470 Advance payment pool.
232.501 General.
232.501-1 Customary progress payment rates.
232.501-2 Unusual progress payments.
232.501-3 Contract price.
232.502 Preaward matters.
232.502-1 Use of customary progress payments.
232.502-4-70 Additional clauses.
232.503 Postaward matters.
232.503-6 Suspension or reduction of payments.
232.503-15 Application of Government title terms.
232.605 Responsibilities and cooperation among Government officials.
232.606 Debt determination and collection.
232.610 Demand for payment of contract debt.
232.616 Compromise actions.
232.617 Contract clause.
232.670 Transfer of responsibility for debt collection.
232.671 Bankruptcy reporting.
232.702 Policy.
232.703 Contract funding requirements.
232.703-1 General.
232.703-3 Contracts crossing fiscal years.
232.703-70 Military construction appropriations act restriction.
232.704 Limitation of cost or funds.
232.704-70 Incrementally funded fixed-price contracts.
232.705 Contract clauses.
232.705-70 Clause for limitation of Government's obligation.
232.803 Policies.
232.805 Procedure.
232.806 Contract clause.
232.903 Responsibilities.
232.904 Determining payment due dates.
232.906 Making payments.
232.1001 Policy.
232.1004 Procedure.
232.1110 Solicitation provision and contract clauses.
232.7000 Scope of subpart.
232.7001 Definitions.
232.7002 Policy.
232.7003 Procedures.
232.7004 Contract clause.
232.7100 Scope of subpart.
232.7101 Policy and procedures.
232.7102 Contract clause.
232.001 Definitions.
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232.006 Reduction or suspension of contract payments upon finding of fraud.
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232.006-5 Reporting.
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232.007 Contract financing payments.
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232.070 Responsibilities.
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232.071 [Reserved]
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232.072 Financial responsibility of contractors.
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232.072-1 Required financial reviews.
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232.072-2 Appropriate information.
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232.072-3 Cash flow forecasts.
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Subpart 232.1—Non-Commercial Item Purchase Financing
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232.102 Description of contract financing methods.
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232.102-70 Provisional delivery payments.
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232.111 Contract clauses for non-commercial purchases.
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Subpart 232.2—Commercial Item Purchase Financing
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232.202-4 Security for Government financing.
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232.206 Solicitation provisions and contract clauses.
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Subpart 232.3—Loan Guarantees for Defense Production
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232.302 Authority.
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Subpart 232.4—Advance Payments for Non-Commercial Items
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232.404 Exclusions.
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232.409 Contracting officer action.
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232.409-1 Recommendation for approval.
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232.410 Findings, determination, and authorization.
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232.412 Contract clause.
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232.412-70 Additional clauses.
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232.470 Advance payment pool.
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Subpart 232.5—Progress Payments Based on Costs
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232.501 General.
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232.501-1 Customary progress payment rates.
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232.501-2 Unusual progress payments.
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232.501-3 Contract price.
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232.502 Preaward matters.
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232.502-1 Use of customary progress payments.
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232.502-4-70 Additional clauses.
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232.503 Postaward matters.
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232.503-6 Suspension or reduction of payments.
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232.503-15 Application of Government title terms.
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Subpart 232.6—Contract Debts
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232.605 Responsibilities and cooperation among Government officials.
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232.606 Debt determination and collection.
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232.610 Demand for payment of contract debt.
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232.616 Compromise actions.
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232.617 Contract clause.
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232.670 Transfer of responsibility for debt collection.
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232.671 Bankruptcy reporting.
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Subpart 232.7—Contract Funding
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232.702 Policy.
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232.703 Contract funding requirements.
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232.703-1 General.
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232.703-3 Contracts crossing fiscal years.
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232.703-70 Military construction appropriations act restriction.
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232.704 Limitation of cost or funds.
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232.704-70 Incrementally funded fixed-price contracts.
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232.705 Contract clauses.
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232.705-70 Clause for limitation of Government's obligation.
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Subpart 232.8—Assignment of Claims
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232.803 Policies.
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232.805 Procedure.
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232.806 Contract clause.
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Subpart 232.9—Prompt Payment
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232.903 Responsibilities.
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232.904 Determining payment due dates.
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232.906 Making payments.
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Subpart 232.10—Performance-Based Payments
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232.1001 Policy.
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232.1004 Procedure.
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Subpart 232.11—Electronic Funds Transfer
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232.1110 Solicitation provision and contract clauses.
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Subpart 232.70—Electronic Submission and Processing of Payment Requests
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232.7000 Scope of subpart.
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232.7001 Definitions.
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232.7002 Policy.
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232.7003 Procedures.
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232.7004 Contract clause.
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Subpart 232.71—Levies on Contract Payments
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232.7100 Scope of subpart.
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232.7101 Policy and procedures.
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232.7102 Contract clause.
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