32.1000
Scope of subpart
FAR 32.1000 establishes that performance-based payments are only applicable to noncommercial purchase contracts, outlining the relevant policies and procedures.
Overview
- FAR 32.1000 defines the scope of Subpart 32.10, which establishes the policies and procedures for using performance-based payments in noncommercial purchase contracts, as referenced in subpart 32.1. This section clarifies that the subpart applies specifically to noncommercial acquisitions and outlines the regulatory framework for structuring and administering performance-based payment arrangements in these contracts.
Key Rules
- Performance-Based Payments Policy
- Sets the foundation for using performance-based payments as a financing method for noncommercial contracts.
- Applicability to Noncommercial Purchases
- Limits the use of these procedures to noncommercial items, excluding commercial item acquisitions.
Responsibilities
- Contracting Officers: Must follow the policies and procedures in this subpart when structuring performance-based payments for noncommercial contracts.
- Contractors: Should understand that performance-based payments are available only for noncommercial purchases and must comply with the terms set forth in the contract.
- Agencies: Ensure oversight and proper application of performance-based payment procedures in eligible contracts.
Practical Implications
- This section exists to clarify when and how performance-based payments can be used in government contracts, specifically for noncommercial items. It impacts daily contracting by providing an alternative to traditional progress payments, potentially improving cash flow for contractors. Common pitfalls include misapplying these procedures to commercial contracts or failing to structure payment milestones appropriately.