32.500 Scope of subpart
Source: FAR 32.500 on acquisition.gov
FAR 32.500 clarifies that progress payments based on costs are only available for certain contract types, excluding cost-reimbursement and specific construction or shipbuilding contracts.
Overview
- FAR 32.500 defines the scope of Subpart 32.5, which establishes the rules for contract financing through progress payments based on costs. It clarifies when these policies and procedures apply and specifically identifies contract types that are excluded from this subpart.
Key Rules
- Progress Payments Based on Costs
- This subpart covers the use of progress payments as a form of contract financing, where payments are made to contractors based on incurred costs.
- Exclusions
- The subpart does not apply to cost-reimbursement contracts (except for certain subcontractor payments addressed in FAR 32.110) or to contracts for construction, shipbuilding, or ship conversion/repair that use progress payments based on completion percentage or stage.
Responsibilities
- Contracting Officers: Must determine if a contract is eligible for progress payments based on costs under this subpart and ensure exclusions are properly applied.
- Contractors: Should verify whether their contract type qualifies for progress payments under these rules.
- Agencies: Oversee proper application of progress payment policies and ensure compliance with exclusions.
Practical Implications
- This section helps contracting professionals quickly determine if Subpart 32.5 applies to their contract, preventing misapplication of progress payment rules. It is essential for avoiding compliance errors and ensuring the correct financing method is used for each contract type.
This subpart prescribes policies, procedures, forms, solicitation provisions, and contract clauses for providing contract financing through progress payments based on costs. This subpart does not apply to-
(a) Payments under cost-reimbursement contracts, but see 32.110 for progress payments made to subcontractors under cost-reimbursement prime contracts; or
(b) Contracts for construction or for shipbuilding or ship conversion, alteration, or repair, when the contracts provide for progress payments based on a percentage or stage of completion.