52.232-29 Terms for Financing of Purchases of Commercial Products and Commercial Services
Source: FAR 52.232-29 on acquisition.gov
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.
As prescribed in 32.206(b)(2), insert the following clause:
Terms for Financing of Purchases of Commercial Products and Commercial Services (Nov 2021)
(a) Contractor entitlement to financing payments. The Contractor may request, and the Government shall pay, a contract financing payment as specified elsewhere in this contract when: the payment requested is properly due in accordance with this contract; the supplies deliverable or services due under the contract will be delivered or performed in accordance with the contract; and there has been no impairment or diminution of the Government’s security under this contract.
(b) Special terms regarding termination for cause. If this contract is terminated for cause, the Contractor shall, on demand, repay to the Government the amount of unliquidated contract financing payments. The Government shall be liable for no payment except as provided by the Termination for Cause paragraph of the clause at Federal Acquisition Regulation (FAR) 52.212-4, Contract Terms and Conditions—Commercial Products and Commercial Services.
(c) Security for Government financing. In the event the Contractor fails to provide adequate security, as required in this contract, no financing payment shall be made under this contract. Upon receipt of adequate security, financing payments shall be made, including all previous payments to which the Contractor is entitled, in accordance with the terms of the provisions for contract financing. If at any time the Contracting Officer determines that the security provided by the Contractor is insufficient, the Contractor shall promptly provide such additional security as the Contracting Officer determines necessary. In the event the Contractor fails to provide such additional security, the Contracting Officer may collect or liquidate such security that has been provided and suspend further payments to the Contractor; and the Contractor shall repay to the Government the amount of unliquidated financing payments as the Contracting Officer at his sole discretion deems repayable.
(d) Reservation of rights.
(1) No payment or other action by the Government under this clause shall-
(i) Excuse the Contractor from performance of obligations under this contract; or
(ii) Constitute a waiver of any of the rights or remedies of the parties under the contract.
(2) The Government’s rights and remedies under this clause-
(i) Shall not be exclusive, but rather shall be in addition to any other rights and remedies provided by law or this contract; and
(ii) Shall not be affected by delayed, partial, or omitted exercise of any right, remedy, power, or privilege, nor shall such exercise or any single exercise preclude or impair any further exercise under this clause or the exercise of any other right, power, or privilege of the Government.
(e) Content of Contractor's request for financing payment. The Contractor’s request for financing payment shall contain the following:
(1) The name and address of the Contractor;
(2) The date of the request for financing payment;
(3) The contract number and/or other identifier of the contract or order under which the request is made; and
(4) An appropriately itemized and totaled statement of the financing payments requested and such other information as is necessary for computation of the payment, prepared in accordance with the direction of the Contracting Officer.
(f) Limitation on frequency of financing payments. Contractor financing payments shall be provided no more frequently than monthly.
(g) Dates for payment. A payment under this clause is a contract financing payment and not subject to the interest penalty provisions of the Prompt Payment Act. The designated payment office will pay approved payment requests within 30 days of submittal of a proper request for payment.
(h) Conflict between terms of offeror and clause. In the event of any conflict between the terms proposed by the offeror in response to an invitation to propose financing terms (FAR 52.232-31) and the terms in this clause, the terms of this clause shall govern.
(End of clause)