32.003
Simplified acquisition procedures financing
Contract financing is generally not permitted for simplified acquisitions under FAR Part 13 unless specifically allowed by agency regulations.
Overview
FAR 32.003 establishes that, as a general rule, contract financing is not allowed for purchases made using simplified acquisition procedures under FAR Part 13, unless an agency's own regulations specifically allow it. This means that for most small purchases—typically those below the simplified acquisition threshold—contractors should not expect to receive advance payments, progress payments, or other forms of government financing. The intent is to streamline small purchases and reduce administrative burden, but contractors must be aware that they will need to finance performance themselves unless an exception applies.
Key Rules
- No Contract Financing for Simplified Acquisitions
- Contract financing (such as advance or progress payments) is generally prohibited for purchases under FAR Part 13.
- Agency Exceptions
- Agencies may issue their own regulations to permit financing for simplified acquisitions, but this is not the default.
Responsibilities
- Contracting Officers: Must not provide contract financing for simplified acquisitions unless agency regulations allow it.
- Contractors: Should not expect or request contract financing for purchases under Part 13 unless notified otherwise.
- Agencies: May establish exceptions through their own regulations, but must ensure compliance with FAR.
Practical Implications
- This rule exists to keep small purchases simple and reduce administrative costs.
- Contractors must plan to self-finance performance for simplified acquisitions.
- Failure to comply could result in improper payments or contract administration issues.