32.107
Need for contract financing not a deterrent
A contractor’s need for contract financing cannot be used against them in award decisions if they are otherwise responsible, nor can they be denied financing for not requesting it before award.
Overview
FAR 32.107 establishes that a contractor’s need for contract financing should not be considered a negative factor when awarding government contracts, provided the contractor meets the responsibility standards outlined in FAR 9.104. The regulation also clarifies that contractors should not be denied contract financing simply because they did not request it prior to contract award. This ensures that access to contract financing is not used as a barrier to competition or contract award for otherwise responsible contractors.
Key Rules
- Need for Contract Financing Not a Handicap
- Contracting officers must not consider a contractor’s need for financing as a negative responsibility factor or evaluation criterion if the contractor is otherwise responsible under FAR 9.104.
- Post-Award Financing Requests Permitted
- Contractors are not disqualified from receiving contract financing if they did not indicate a need for it before contract award.
Responsibilities
- Contracting Officers: Must evaluate contractor responsibility per FAR 9.104 and not penalize contractors for needing financing; must not disqualify post-award financing requests solely based on timing.
- Contractors: Must meet responsibility standards but are not required to disclose financing needs before award.
- Agencies: Should ensure fair competition and avoid using financing needs as a barrier to award.
Practical Implications
- This section prevents unfair exclusion of contractors who need financing, supporting broader competition and access to government contracts.
- Contractors can seek financing after award without penalty, reducing administrative pressure to declare financing needs prematurely.
- Common pitfalls include mistakenly using financing needs as a negative evaluation factor or denying post-award financing requests based solely on timing.