48 C.F.R. PART 332—CONTRACT FINANCING
Title 48 - Federal Acquisition Regulations System
Authority: 5 U.S.C. 301; 40 U.S.C. 486(c).
Source: 66 FR 4247, Jan. 17, 2001, unless otherwise noted.
(e) The determination that the making of an advance payment is in the public interest (see FAR 32.402(c)(1)(iii)(A)) shall be made by the respective chief of the contracting office (CCO)(not delegable). All contracts for research work with educational institutions located in the United States shall provide for financing by use of advance payments, in reasonable amounts, unless otherwise prohibited by law. (d) The HCA (not delegable) is authorized to make the determinations in FAR 32.407(d) and as follows. In addition to the interest-free advance payments for the types of contracts listed in FAR 32.407(d), advance payments without interest may be approved for nonprofit contracts which are without fee with educational institutions and other nonprofit organizations, whether public or private, which are for the performance of work involving health services, educational programs, or social service programs, including, but not limited to, programs such as: (1) Community health representative services for an Indian Tribe or Band; (2) Narcotic addict rehabilitative services; (3) Comprehensive health care service program for Model Neighborhood programs; (4) Planning and development of health maintenance organizations; (5) Dissemination of information derived from educational research; (6) Surveys or demonstrations in the field of education; (7) Producing or distributing educational media for handicapped persons including captioned films for the hearing impaired; (8) Operation of language or area centers; (9) Conduct of biomedical research and support services; (10) Research surveys or demonstrations involving the training and placement of health manpower and health professionals, and dissemination of related information; and (11) Surveys or demonstrations in the field of social service. The information in FAR 32.409–1 (or FAR 32.409–2) shall be transmitted to the HCA in the form of a briefing memorandum. (a)(3) The approval of an unusual progress payment shall be made by the head of the contracting activity (HCA)(not delegable). An incrementally funded contract is a contract in which the total work effort is to be performed over multiple time periods and funds are allotted to cover discernible phases or increments of performance. (a) Incremental funding may be applied to cost-reimbursement type contracts for the acquisition of research and development and other types of nonpersonal, nonseverable services. It shall not be applied to contracts for construction services, architect-engineer services, or severable services. Incremental funding allows nonseverable cost-reimbursement contracts, awarded for more than one year, to be funded from succeeding fiscal years. (b) It is departmental policy that contracts for projects of multiple year duration be fully funded, whenever possible, to cover the entire project. However, incrementally funded contracts may be used when: (1) A project, which is part of an approved program, is anticipated to be of multiple year duration, but funds are not currently available to cover the entire project; (2) The project represents a valid need for the fiscal year in which the contract is awarded and of the succeeding fiscal years of the project's duration, during which additional funds may be obligated by increasing the allotment to the contract; (3) The project is so significant to the approved program that there is reasonable assurance that it will command a high priority for proposed appropriations to cover the entire multiple year duration; and (4) The statement of work is specific and is defined by separate phases or increments so that, at the completion of each, progress can be effectively measured. (b) The following general guidelines are applicable to incrementally funded contracts: (1) The estimated total cost of the project (all planned phases or increments) is to be taken into consideration when determining the requirements which must be met before entering into the contract; i.e., justification for noncompetitive acquisition, approval or award, etc. (2) The RFP and resultant contract are to include a statement of work which describes the total project covering the proposed multiple year period of performance and indicating timetables consistent with planned phases or increments and corresponding allotments of funds. (3) Offerors will be expected to respond to RFPs with technical and cost proposals for the entire project indicating distinct break-outs of the planned phases or increments, and the multiple year period of performance. (4) Negotiations will be conducted based upon the total project, including all planned phases or increments, and the multiple year period of performance. (5) Sufficient funds must be obligated under the basic contract to cover no less than the first year of performance, unless the contracting officer determines it is advantageous to the Government to fund the contract for a lesser period. In that event, the contracting officer shall ensure that the obligated funds are sufficient to cover a complete phase or increment of performance representing a material and measurable part of the total project, and the contract period shall be reduced accordingly. (6) Because of the magnitude of the scope of work and multiple year period of performance under an incrementally funded contract, there is a critical need for careful program planning. Program planning must provide for appropriate surveillance of the contractor's performance and adequate controls to ensure that projected funding will not impinge on the program office's ability to support, within anticipated appropriations, other equally important contract or grant programs. (7) An incrementally funded contract must contain precise requirements for progress reports to enable the project officer to effectively monitor the contract. The project officer should be required to prepare periodic performance evaluation reports to facilitate the program office's ultimate decision to allot additional funds under the contract. For detailed instruction regarding administrative actions in connection with anticipated cost overruns, see subpart 342.71 (c)(1) When using the Limitation of Funds clause (FAR 52.232–22) in the solicitation and resultant incrementally funded contract, the contracting officer shall insert the following legend between the clause title and the clause text:
(This clause supersedes the Limitation of Cost clause found in the General Provisions of this contract.) (2) The contracting officer shall also include a clause reading substantially as that shown in 352.232–74 in the Special Provisions of the resultant incrementally funded contract. (3) The request for proposals must inform prospective offerors of the Department's intention to enter into an incrementally funded contract. Therefore, the contracting officer shall include the provision at 352.232–75 in the request for proposals whenever the use of incremental funding is contemplated. Fiscal office means the office responsible for: determining whether interest penalties are due a contractor and, if so, the amount; determining whether an invoice offers a financially advantageous discount; maintaining records for and submission of prompt payment reports to the Deputy Assistant Secretary, Finance (DASF), ASAM, OS; and processing payments to the Treasury Department to allow for payment to a contractor when due. The fiscal office may fulfill the roles of the “designated billing office” and the “designated payment office.”
Title 48: Federal Acquisition Regulations System
PART 332—CONTRACT FINANCING
Section Contents
332.402 General.
332.403 Applicability.
332.407 Interest.
332.409 Contracting officer action.
332.409-1 Recommendation for approval.
332.501 General.
332.501-2 Unusual progress payments.
332.702 Policy.
332.703 Contract funding requirements.
332.703-1 General.
332.704 Limitation of cost or funds.
332.705 Contract clauses.
332.705-2 Clauses for limitation of costs or funds.
332.902 Definitions.
Subpart 332.4—Advance Payments for Non-Commercial Items
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332.402 General.
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332.403 Applicability.
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332.407 Interest.
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332.409 Contracting officer action.
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332.409-1 Recommendation for approval.
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Subpart 332.5—Progress Payments Based on Cost
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332.501 General.
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332.501-2 Unusual progress payments.
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Subpart 332.7—Contract Funding
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332.702 Policy.
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332.703 Contract funding requirements.
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332.703-1 General.
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332.704 Limitation of cost or funds.
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332.705 Contract clauses.
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332.705-2 Clauses for limitation of costs or funds.
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Subpart 332.9—Prompt Payment
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332.902 Definitions.
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