Preaward matters
FAR 32.502 ensures all progress payment arrangements and requirements are addressed before contract award to facilitate smooth contract execution and compliance.
Overview
FAR 32.502 addresses preaward considerations related to progress payments based on costs in government contracts. It outlines the key actions and decisions that contracting officers and contractors must address before contract award, such as determining the use of customary progress payments, obtaining necessary finance office clearances, including appropriate solicitation provisions, and ensuring the correct contract clauses are incorporated. While primarily focused on preaward activities, the section allows for certain actions, like adding a Progress Payments clause, to be taken postaward if justified. This section serves as a roadmap for ensuring all financial and contractual prerequisites for progress payments are met before contract execution.
Key Rules
- Use of Customary Progress Payments
- Evaluate and determine the appropriateness of progress payments before award.
- Contract Finance Office Clearance
- Obtain required clearances from the contract finance office prior to including progress payment provisions.
- Solicitation Provisions
- Ensure solicitations contain the necessary provisions related to progress payments.
- Contract Clauses
- Incorporate the correct progress payment clauses into the contract before award.
Responsibilities
- Contracting Officers: Must assess the need for progress payments, secure finance office clearance, and ensure proper provisions and clauses are included in solicitations and contracts.
- Contractors: Should review solicitation and contract terms for progress payment provisions and be prepared to comply with related requirements.
- Agencies: Oversee compliance with preaward financial procedures and ensure proper documentation and approvals are in place.
Practical Implications
- This section ensures that all financial arrangements for progress payments are properly vetted and documented before contract award, reducing the risk of disputes or payment delays.
- It impacts daily contracting by requiring thorough preaward planning and coordination between contracting, finance, and legal teams.
- Common pitfalls include failing to obtain necessary clearances or omitting required clauses, which can complicate contract administration postaward.