32.502-1
Use of customary progress payments
Only include progress payments in bids if the solicitation specifically allows them, or risk having your bid rejected as nonresponsive.
Overview
FAR 32.502-1 addresses when and how contracting officers may include progress payments in government contracts. It allows the use of a Progress Payments clause in solicitations and contracts, provided it aligns with the rules in this subpart. Importantly, if a solicitation does not mention progress payments, any bid that is conditioned on receiving progress payments must be rejected as nonresponsive. This ensures clarity and fairness in the bidding process and prevents bidders from imposing conditions not contemplated by the government.
Key Rules
- Use of Progress Payments Clause
- Contracting officers may include a Progress Payments clause in solicitations and contracts if it complies with the relevant subpart.
- Nonresponsive Bids
- Bids that are conditioned on progress payments, when the solicitation does not provide for them, must be rejected as nonresponsive.
Responsibilities
- Contracting Officers: Must ensure progress payments are only included when authorized and must reject noncompliant bids.
- Contractors: Must not condition bids on progress payments unless the solicitation allows it.
- Agencies: Must oversee compliance with solicitation requirements regarding progress payments.
Practical Implications
- This rule ensures all bidders compete on equal terms and prevents misunderstandings about payment terms.
- Contractors should carefully review solicitations to determine if progress payments are permitted before submitting bids.
- Common pitfalls include assuming progress payments are available when they are not, leading to bid rejection.