What FAR Part 32 - Contract Financing (Progress Payments, Performance-Based Payments, Prompt Payment Act) requires
Federal Acquisition Regulation (FAR) Part 32 governs federal contract financing including progress payments, performance-based payments, advance payments, commercial item financing, and the Prompt Payment Act: Subpart 32.1 (General) requires contracting officers to provide financing only as needed and monitor contractor use and financial status; Subpart 32.2 (Commercial Product and Commercial Service Purchase Financing) limits commercial advance payments to 15% of contract price before performance and requires adequate security under 32.202-4; Subpart 32.4 (Advance Payments for Non-Commercial Items) requires determination by head of contracting activity; Subpart 32.5 (Progress Payments Based on Costs) allows progress payments at standard rates (currently 80% for non-small business, 85% for small business) computed on incurred costs less progress payments to subcontractors; Subpart 32.10 (Performance-Based Payments) is the preferred method for non-commercial fixed-price contracts where payments are tied to performance events or milestones; Subpart 32.11 (Electronic Funds Transfer) mandates EFT for contractor payments under 31 USC 3332; Subpart 32.9 implements the Prompt Payment Act (31 USC chapter 39) requiring payment within 30 days of proper invoice receipt (7 days for fast-pay) with interest penalty on late payments under 5 CFR Part 1315.
Pillar: Public Sector & Government Procurement · Authority: Federal Acquisition Regulatory Council (DOD, GSA, NASA) issuing the Federal Acquisition Regulation under 41 USC 1303 and 48 CFR Chapter 1; Prompt Payment Act at 31 USC chapter 39; Office of Management and Budget prompt payment regulations at 5 CFR Part 1315 · Version: 1.0.0 · Last updated:
Primary source: https://www.acquisition.gov/far/part-32
SHA-256 integrity: 7ddce7a5c5956710bbea86188c49162a7e04119d06b972ee15400df73239e764
Primary Citations — 6 traced to source
- FAR Part 32 Section 32.104(a) (Providing contract financing): 'Agencies shall provide contract financing in a form acceptable to the Government when it is in the Government's interest to do so. The various forms of contract financing in this part are listed in the order in which they should be considered for use.'
- FAR Part 32 Section 32.106 (Order of preference): financing methods in order of preference are (a) private financing without Government guarantee; (b) customary contract financing under 32.113; (c) loan guarantees; (d) unusual contract financing; (e) advance payments - contracting officers should not provide more advanced forms of financing than necessary.
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