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DFARS 232



Part 232—Contract Financing

TABLE OF CONTENTS

(Revised February 26, 2016)

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.

SUBPART 232.1--NON-COMMERCIAL ITEM PURCHASE FINANCING

232.102 Description of contract financing methods.

232.102-70 Provisional delivery payments.

SUBPART 232.2--COMMERCIAL ITEM PURCHASE FINANCING

232.202-4 Security for Government financing.

232.206 Solicitation provisions and contract clauses.

SUBPART 232.3--LOAN GUARANTEES FOR DEFENSE PRODUCTION

232.302 Authority.

SUBPART 232.4--ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

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.

SUBPART 232.5--PROGRESS PAYMENTS BASED ON COSTS

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.

232.502-4 Contract clauses.

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.

SUBPART 232.6--CONTRACT DEBTS

232.602 Responsibilities.

232.603 Debt determination.

232.604 Demand for payment.

232.610 Compromising debts.

232.611 Contract clause.

232.670 Transfer of responsibility for debt collection.

232.671 Bankruptcy reporting.

SUBPART 232.7--CONTRACT FUNDING

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.

SUBPART 232.8--ASSIGNMENT OF CLAIMS

232.803 Policies.

232.805 Procedure.

232.806 Contract clause.

SUBPART 232.9--PROMPT PAYMENT

232.901 Applicability.

232.903 Responsibilities.

232.904 Determining payment due dates.

232.905 Payment documentation and process.

232.906 Making payments.

232.908 Contract clauses.

SUBPART 232.10--PERFORMANCE-BASED PAYMENTS

232.1001 Policy.

232.1003-70 Criteria for use.

232.1004 Procedures.

232.1005-70 Contract clauses.

SUBPART 232.11--ELECTRONIC FUNDS TRANSFER

232.1110 Solicitation provision and contract clauses.

SUBPART 232.70--ELECTRONIC SUBMISSION AND PROCESSING OF

232.7000 Scope of subpart.

232.7001 Definitions.

232.7002 Policy.

232.7003 Procedures.

232.7004 Contract clause.

SUBPART 232.71—LEVIES ON CONTRACT PAYMENTS

232.7100 Scope of subpart.

232.7101 Policy and procedures.

232.7102 Contract clause.

SUBPART 232.72—PAYMENT IN LOCAL CURRENCY (AFGHANISTAN)

232.7200 Scope of subpart.

232.7201 Policy and procedures.

232.7202 Solicitation provision.

(Revised April 26, 2007)

232.001 Definitions.

“Incremental funding” means the partial funding of a contract or an exercised option, with additional funds anticipated to be provided at a later time.

232.006 Reduction or suspension of contract payments upon finding of fraud.

232.006-5 Reporting.

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.

232.007 Contract financing payments.

(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—

232.070 Responsibilities.

232.071 Reserved.

232.072 Financial responsibility of contractors.

Use the policies and procedures in this section in determining the financial capability of current or prospective contractors.

232.072-1 Required financial reviews.

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

232.072-2 Appropriate information.

232.072-3 Cash flow forecasts.

SUBPART 232.1--NON-COMMERCIAL ITEM PURCHASE FINANCING

(Revised January 24, 2008)

232.102 Description of contract financing methods.

232.102-70 Provisional delivery payments.

SUBPART 232.2--COMMERCIAL ITEM PURCHASE FINANCING

(Revised December 20, 2005)

232.202-4 Security for Government financing.

232.206 Solicitation provisions and contract clauses.

SUBPART 232.3--LOAN GUARANTEES FOR DEFENSE PRODUCTION

232.302 Authority.

SUBPART 232.4--ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

(Revised October 1, 2010)

232.404 Exclusions.

232.409 Contracting officer action.

232.409-1 Recommendation for approval.

Follow the procedures at PGI 232.409-1 for preparation of the documents required by FAR 32.409-1(e) and (f).

232.410 Findings, determination, and authorization.

If an advance payment procedure is used without a special bank account, follow the procedures at PGI 232.410.

232.412 Contract clause.

232.412-70 Additional clauses.

232.470 Advance payment pool.

SUBPART 232.5--PROGRESS PAYMENTS BASED ON COSTS

(Revised October 14, 2014)

232.501 General.

232.501-1 Customary progress payment rates.

232.501-2 Unusual progress payments.

Follow the procedures at PGI 232.501-2 for approval of unusual progress payments.

232.501-3 Contract price.

232.502 Preaward matters.

232.502-4 Contract clauses.

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.

SUBPART 232.6--CONTRACT DEBTS

(Revised September 30, 2015)

232.602 Responsibilities.

232.603 Debt determination.

When transferring a case to the contract financing office, follow the procedures at PGI 232.603.

232.604 Demand for payment.

When issuing a demand for payment of a contract debt, follow the procedures at PGI 232.604.

232.610 Compromising debts.

Only the department/agency contract financing offices (see PGI 232.070(c)) are authorized to compromise debts covered by this subpart.

232.611 Contract clause.

232.670 Transfer of responsibility for debt collection.

Follow the procedures at PGI 232.670 for transferring responsibility for debt collection.

232.671 Bankruptcy reporting.

Follow the procedures at PGI 232.671 for bankruptcy reporting.

SUBPART 232.7--CONTRACT FUNDING

(Revised April 12, 2006)

232.702 Policy.

Fixed-price contracts shall be fully funded except as permitted by 232.703-1.

232.703 Contract funding requirements.

232.703-1 General.

232.703-3 Contracts crossing fiscal years.

232.703-70 Military construction appropriations act restriction.

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)).

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.

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.

SUBPART 232.8--ASSIGNMENT OF CLAIMS

(Revised September 20, 2011)

232.803 Policies.

232.805 Procedure.

232.806 Contract clause.

SUBPART 232.9—PROMPT PAYMENT

(Revised February 26, 2016)

232.901 Applicability.

(i) There is-

232.903 Responsibilities.

DoD policy is to assist small business concerns by paying them as quickly as possible after invoices and all proper documentation, including acceptance, are received and before normal payment due dates established in the contract (see 232.906(a)).

See DoD Class Deviation 2014-O0015-Update to Accelerated Payments to Small Businesses, dated April 15, 2014. This deviation is effective until modification of all DoD entitlement and payment systems to accommodate accelerated payments is completed, or until superseded or rescinded.

232.904 Determining payment due dates.

232.905 Payment documentation and process.

232.906 Making payments.

232.908 Contract clauses.

Use the clause at 252.232-7011, Payments in Support of Emergencies and Contingency Operations, in solicitations and contracts , including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items, in acquisitions that meet the applicability criteria at 232.901(1). Use of this clause is in addition to use of either the approved Payment clause prescribed in FAR 32.908 or the clause at FAR 52.212-4, Contract Terms and Conditions—Commercial Items.

SUBPART 232.10--PERFORMANCE-BASED PAYMENTS

(Revised April 21, 2014)

232.1001 Policy.

232.1003-70 Criteria for use.

The contracting officer will consider the adequacy of an offeror’s or contractor’s accounting system prior to agreeing to use performance-based payments.

232.1004 Procedures.

http://www.acq.osd.mil/dpap/cpic/cp/Performance_based_payments.html.

232.1005-70 Contract clauses.

The contracting officer shall include the following clauses with appropriate fill-ins in solicitations and contracts that include performance-based payments:

SUBPART 232.11--ELECTRONIC FUNDS TRANSFER

(Revised June 25, 2013)

232.1110 Solicitation provision and contract clauses.

Use the clause at 252.232-7009, Mandatory Payment by Governmentwide Commercial Purchase Card, in solicitations, contracts, and agreements, including solicitations, contracts, and agreements using FAR part 12 procedures for the acquisition of commercial items, when—

SUBPART 232.70—ELECTRONIC SUBMISSION AND PROCESSING OF PAYMENT REQUESTS AND RECEIVING REPORTS

(Revised July 31, 2014)

232.7000 Scope of subpart.

This subpart prescribes policies and procedures for submitting and processing payment requests in electronic form to comply with 10 U.S.C. 2227.

232.7001 Definitions.

“Electronic form” and “payment request,” as used in this subpart, are defined in the clause at 252.232-7003, Electronic Submission of Payment Requests.

232.7002 Policy.

(a)(1) Contractors shall submit payment requests and receiving reports in electronic form, except for—

(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 for processing supporting documentation other than receiving reports and other forms of acceptance.

(c) When payment requests and receiving reports will not be submitted in electronic form—

232.7003 Procedures.

(a) The accepted electronic form for submission of payment requests and receiving reports is Wide Area WorkFlow (see website – https://wawf.eb.mil/).

(b) For payment of commercial transportation services provided under a Government rate tender or a contract for transportation services, the use of a DoD-approved electronic third party payment system or other exempted vendor payment/invoicing system (e.g., PowerTrack, Transportation Financial Management System, and Cargo and Billing System) is permitted.

232.7004 Contract clauses.

SUBPART 232.71—LEVIES ON CONTRACT PAYMENTS

(Revised June 25, 2013)

232.7100 Scope of subpart.

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.

232.7101 Policy and procedures.

232.7102 Contract clause.

Use the clause at 252.232-7010, Levies on Contract Payments, in all solicitations and contracts, including solicitations and contracts using FAR part 12 procedures for the acquisition of commercial items.

SUBPART 232.72—PAYMENT IN LOCAL CURRENCY (AFGHANISTAN)

(Added September 30, 2014)

232.7200 Scope of subpart.

This subpart prescribes policies and procedures concerning the payment of contracts for performance in Afghanistan.

232.7201 Policy and procedures.

Payment currency used for contracts performed in Afghanistan shall be dependent on the nationality of the vendor pursuant to the authority of USCENTCOM Fragmentary Orders (FRAGOs) 09-1567 and 10-143. If the contract is awarded to a host nation vendor (Afghan), the contractor will be paid in Afghani (local currency) via electronic funds transfer to a local (Afghan) banking institution. Contracts shall not be awarded to host nation vendors who do not bank locally. If awarded to other than a host nation vendor, the contract will be awarded in U.S. dollars.

232.7202 Solicitation provision.

Use the provision at 252.232-7014, Notification of Payment in Local Currency (Afghanistan), in all solicitations, including solicitations using FAR part 12 procedures for the acquisition of commercial items, for performance in Afghanistan.

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