32.501
General
Customary progress payments are the standard and must be followed unless unusual payments are specifically authorized for exceptional cases.
Overview
FAR 32.501 outlines the general framework for progress payments in government contracts, distinguishing between customary and unusual progress payments. Customary progress payments follow established rates, cost bases, and payment frequencies as specified in the Progress Payments clause, and use standard liquidation methods. Unusual progress payments, which deviate from these norms, are only permitted in exceptional circumstances and require special authorization as detailed in FAR 32.501-2. This section sets the stage for the more detailed requirements and procedures found in subsequent subsections, ensuring that contractors and contracting officers understand the baseline rules for progress payments based on costs.
Key Rules
- Customary Progress Payments
- Must adhere to standard rates, cost bases, and payment schedules as outlined in the Progress Payments clause and related subsections.
- Unusual Progress Payments
- May only be used in exceptional cases and require specific authorization per FAR 32.501-2.
Responsibilities
- Contracting Officers: Ensure progress payments conform to customary practices unless an unusual payment is justified and properly authorized.
- Contractors: Comply with the terms of the Progress Payments clause and provide necessary documentation for payment.
- Agencies: Oversee and authorize any deviations from customary progress payment practices.
Practical Implications
- This section establishes the default approach for progress payments, promoting consistency and reducing risk in contract financing.
- Contractors should expect to follow standard progress payment procedures unless a compelling case for unusual payments is made and approved.
- Failure to adhere to these rules can result in payment delays or compliance issues.