32.203
Determining contract financing terms
Contracting officers must either specify or allow offerors to propose financing terms for commercial acquisitions, ideally aligning with customary commercial practices.
Overview
FAR 32.203 outlines how contracting officers should determine contract financing terms for commercial product and service acquisitions. When the criteria in FAR 32.202-1(b) are satisfied, the contracting officer has the discretion to either specify the financing terms directly in the solicitation or allow offerors to propose their own customary financing terms. If the contracting officer has adequate information about standard commercial financing practices for the item or service, those terms may be included in the solicitation to streamline the process and align with market norms.
Key Rules
- Financing Terms Determination
- Contracting officers can specify financing terms or allow offerors to propose their own, depending on available information and market practices.
- Use of Customary Commercial Terms
- If sufficient data on customary commercial financing exists, those terms should be reflected in the solicitation.
Responsibilities
- Contracting Officers: Must assess whether to specify financing terms or permit offeror proposals, and ensure terms align with commercial practices when possible.
- Contractors: Should be prepared to propose customary financing terms if not specified, or comply with those set in the solicitation.
- Agencies: Should support contracting officers in gathering market data on commercial financing practices.
Practical Implications
- This section ensures that government contract financing aligns with commercial standards, promoting efficiency and fairness.
- Contractors benefit from clarity or flexibility, depending on the approach taken.
- Common pitfalls include failing to research customary terms or not clearly communicating financing requirements in the solicitation.