52.232-29
Terms for Financing of Purchases of Commercial Products and Commercial Services
FAR 52.232-29 sets strict requirements for requesting and receiving contract financing payments for commercial products and services, emphasizing proper documentation, security, and repayment obligations.
Overview
FAR 52.232-29 establishes the terms and conditions for contract financing payments for purchases of commercial products and commercial services. This clause outlines when contractors are entitled to financing payments, the requirements for security, procedures in the event of contract termination, and the process for submitting payment requests. It also clarifies the Government’s rights and remedies, the frequency and timing of payments, and resolves conflicts between offeror-proposed terms and the clause itself.
Key Rules
- Entitlement to Financing Payments
- Contractors may request financing payments if due under the contract, deliverables are on track, and Government security is not impaired.
- Termination for Cause
- If terminated for cause, contractors must repay unliquidated financing payments, and the Government is only liable as specified in FAR 52.212-4.
- Security for Financing
- Contractors must provide adequate security; failure to do so suspends payments and may require repayment of unliquidated amounts.
- Reservation of Rights
- Government actions do not waive contractual rights or remedies, which are cumulative and not exclusive.
- Request Content and Frequency
- Requests must include specific information and may be submitted no more than monthly.
- Payment Timing
- Approved requests are paid within 30 days but are not subject to Prompt Payment Act interest penalties.
- Conflict of Terms
- This clause prevails over any conflicting offeror-proposed financing terms.
Responsibilities
- Contracting Officers: Ensure contractor compliance, determine adequacy of security, and process payment requests.
- Contractors: Submit proper, timely requests with required information, maintain adequate security, and repay unliquidated payments if required.
- Agencies: Oversee compliance and enforce repayment or security requirements as needed.
Practical Implications
- Provides a clear framework for contract financing on commercial contracts, protecting both parties’ interests.
- Ensures contractors understand documentation and security requirements for financing payments.
- Common pitfalls include incomplete payment requests, inadequate security, or misunderstanding repayment obligations upon termination.