Approval of progress payment requests
ACOs can rely on a contractor’s certified accounting system for progress payments unless there is a specific reason to doubt its reliability or expect a contract loss.
Overview
FAR 32.503-4 outlines the procedures for approving contractor progress payment requests. It allows the Administrative Contracting Officer (ACO) to rely on the contractor’s established accounting system and certification when approving progress payments, provided the contractor’s reliability and system adequacy have been confirmed. Routine audits of progress payment requests are discouraged unless there is a specific reason to question the contractor’s certification or suspect a potential contract loss. If there is doubt about a portion of a payment request, only the questionable amount should be withheld, while undisputed amounts should be paid promptly.
Key Rules
- Reliance on Contractor Systems
- ACOs may approve progress payments based on the contractor’s accounting system and certification if these have been deemed reliable and adequate.
- Audit Requests
- Audits or reviews of progress payment requests should not be routine but may be required if there are doubts about the contractor’s certification or concerns about contract losses.
- Partial Withholding
- Only the disputed portion of a progress payment request should be withheld pending review or audit; the remainder should be paid without delay.
Responsibilities
- Contracting Officers: Must assess the reliability of the contractor’s accounting system and certification, determine when audits are necessary, and ensure timely payment of undisputed amounts.
- Contractors: Must maintain reliable accounting systems and provide accurate certifications with progress payment requests.
- Agencies: Should oversee the process to ensure compliance and proper use of audits.
Practical Implications
This section ensures efficient processing of progress payments while safeguarding government interests. It minimizes unnecessary audits, encourages reliance on established systems, and prevents undue payment delays. Contractors benefit from prompt payment of undisputed amounts, but must maintain robust accounting practices to avoid scrutiny or payment withholds.