32.207
Administration and payment of commercial financing payments
Contracting officers must rigorously review, approve, and monitor commercial financing payments to ensure proper payment and adequate security throughout contract performance.
Overview
FAR 32.207 outlines the responsibilities and procedures for administering and paying commercial financing payments under government contracts. It assigns the contracting officer the primary role in reviewing, approving, and transmitting contract financing requests, as well as ensuring ongoing adequacy of security for such payments. The section also requires that each financing approval specifies the payment amount, relevant contract details, and the accounts to be charged. Additionally, if the contractor’s financial condition serves as the Government’s security, the contracting officer must monitor the contractor’s financial health throughout contract performance.
Key Rules
- Contracting Officer Responsibility
- The contracting officer administering the contract must review and approve all commercial financing requests.
- Approval and Transmission
- Unless otherwise specified, the contracting officer receives, approves, and forwards financing requests to the payment office, detailing payment amount, contract information, and account(s) to be charged.
- Security Management
- The contracting officer must ensure that security for financing remains adequate and, if the contractor’s financial condition is the security, must monitor that condition during contract performance.
Responsibilities
- Contracting Officers: Review, approve, and transmit financing requests; specify payment details; ensure security adequacy; monitor contractor’s financial condition if applicable.
- Contractors: Submit complete and accurate financing requests; maintain financial condition if it serves as security.
- Agencies: Oversee contracting officer compliance and may set additional regulations or agreements regarding payment processing.
Practical Implications
- Ensures proper oversight and accountability in the administration of commercial financing payments.
- Helps prevent improper payments and mitigates financial risk to the Government.
- Contractors must be prepared for ongoing financial scrutiny if their financial condition is used as security.