32.300
Scope of subpart
FAR 32.300 outlines the framework for federal agencies to guarantee loans for contractors performing national defense work, ensuring access to necessary financing.
Overview
- FAR 32.300 establishes the scope for Subpart 32.3, which covers the policies and procedures for designated federal agencies to guarantee loans made by private financial institutions to contractors performing work related to national defense. The intent is to facilitate financing for contractors engaged in defense production by reducing the financial risk to lenders, thereby supporting timely and effective contract performance.
Key Rules
- Loan Guarantees for Defense Production
- Designated agencies may guarantee loans from private lenders to contractors working on national defense contracts.
- Applicability
- Applies specifically to contracts and contractors involved in national defense activities, as referenced in FAR 30.102.
Responsibilities
- Contracting Officers: Must be aware of the availability of loan guarantees and ensure contractors are informed when appropriate.
- Contractors: Should understand the potential for loan guarantees to support contract performance and financing needs.
- Agencies: Responsible for implementing and overseeing the loan guarantee process in accordance with prescribed policies and procedures.
Practical Implications
- This section exists to ensure contractors have access to necessary financing for defense-related contracts, reducing the risk of performance delays due to lack of capital.
- It impacts daily contracting by providing a mechanism for financial support, especially for small or financially constrained contractors.
- Common issues include misunderstanding eligibility or the process for securing a loan guarantee, which can delay contract performance.