32.401
Statutory authority
Advance payments in non-commercial contracts are only allowed when specifically authorized by statute or executive order.
Overview
FAR 32.401 outlines the statutory authority under which federal agencies may authorize advance payments in both negotiated and sealed bid contracts. This section specifies that such payments are only permissible if they are consistent with certain statutes: 41 U.S.C. chapter 45, 10 U.S.C. chapter 277, or Public Law 85-804 (as implemented by Executive Order 10789). The regulation directs contracting professionals to ensure that any advance payment arrangements are grounded in these legal authorities, and references FAR subpart 50.1 for additional applications of Pub.L. 85-804. This section is foundational for understanding when and how advance payments can be considered in non-commercial acquisitions.
Key Rules
- Statutory Basis for Advance Payments
- Advance payments may only be authorized if they are supported by one of the specified statutes or executive orders.
- Applicability to Contract Types
- Applies to both negotiated and sealed bid contracts, but not to commercial item acquisitions.
- Reference to Additional Guidance
- For further use of Pub.L. 85-804, refer to FAR subpart 50.1.
Responsibilities
- Contracting Officers: Must verify statutory authority before authorizing advance payments and ensure compliance with referenced statutes and executive orders.
- Contractors: Should understand that advance payments are not automatic and must be supported by statutory authority.
- Agencies: Must ensure oversight and proper documentation when advance payments are authorized.
Practical Implications
- This section exists to ensure that advance payments are only made when legally permissible, protecting government funds and ensuring compliance.
- It impacts daily contracting by requiring careful legal review before advance payments are approved.
- Common pitfalls include failing to document the statutory basis for advance payments or misapplying the authority to commercial acquisitions.