0704-0321 Supporting Statement 2025-05-06

SUPPORTING STATEMENT – PART A

Defense Federal Acquisition Regulation Supplement (DFARS) Part 232, Contract Financing, and the Clause at 252.232-7002, Progress Payments for Foreign Military Sales Acquisition

OMB Control Number 0704-0321

Summary of Changes from Previously Approved Collection

• Overall decrease in burden based on the most recent data available in the Federal Procurement Data System (FPDS).

• Increase in the cost per response due to use of 2024 labor rates.

1. Need for the Information Collection

This supporting statement covers the following requirements for the collection of information relating to Defense Federal Acquisition Regulation Supplement (DFARS) 232.502-4-70(a) and the related clause at 252.232-7002, Progress Payments for Foreign Military Sales Acquisitions. The Arms Export Control Act requires, in the absence of a special Presidential Finding, that the U.S. Government purchase military equipment for foreign governments using foreign funds and without any charge to U.S. appropriated funds. To comply with this requirement, the Government needs to know how much to charge each country as progress payments are made for foreign military sales (FMS) purchases. The Government can only obtain this information from the contractor preparing the progress payment request. The clause at 252.232-7002 requires a contractor whose contract includes FMS requirements to submit a progress payment request with a supporting schedule that clearly distinguishes the contract’s FMS requirements from U.S. contract requirements.

a. DFARS 252.232-7002(a) requires contractors to submit a separate progress payment request for FMS and U.S. line items in the contract.

b. DFARS 252.232-7002(b) requires contractors to submit a supporting schedule showing the amount of each request distributed to each country's requirements.

c. DFARS 252.232-7002(c) requires contractors to identify in each progress payment request the contract requirements to which it applies (i.e., FMS or U.S.).

d. DFARS 252.232-7002(d) requires contractors to calculate each request on the basis of the prices, costs (including costs to complete), subcontractor progress payments, and progress payment liquidations of the contract requirements to which it applies.

e. DFARS 252.232-7002(e) requires contractors to distribute costs among contract line items and countries in a manner acceptable to the Administrative Contracting Officer.

2. Use of the Information

The customary progress payment rates for DoD contracts, as prescribed in DFARS part 232, are 80 percent for large business concerns and 90 percent for small business concerns. The information generated by the progress payment submission requirements of DFARS part 232 is used by contracting officers to maintain an audit trail and permit verification of calculations. The Government also uses this information to determine how much to disburse to the contractor. Absent this information, the Government would be unable to pay the FMS portion of the progress payment request, thereby breaching its contractual duties, with subsequent damages payable to the contractor; the Disbursing Officer would commit a statutory violation in wrongfully disbursing U.S. funds contrary to the Congressional instructions for payments for FMS work; or the U.S. Government would violate its fiduciary duty to the foreign country whose funds are improperly disbursed for some other country’s purchases.

3. Use of Information Technology

Information technology is used 100% of the time. A procedure has been implemented that allows contractors to submit, and DoD to process, progress payments electronically. This method of collection was adopted to reduce input errors and increase cash flow.

4. Non-duplication

As a matter of policy, DoD reviews the Federal Acquisition Regulation (FAR) to determine if adequate language already exists. The language in DFARS 252.232-7002 applies solely to DoD and is not considered duplicative of the language in the FAR. Similar information is not readily available.

5. Burden on Small Business

The burden applied to small businesses is the minimum consistent with applicable laws, Executive orders, regulations, and prudent business practices.

6. Less Frequent Collection

The information will be collected no more than once per month, but may be collected less frequently depending on the frequency of the contractor’s submission of progress payment requests. The monthly limitation is imposed by FAR 52.232-16, Progress Payments, which is a required clause in contracts under which the Government will provide progress payments based on costs.

7. Paperwork Reduction Act Guidelines

Collection of this information is consistent with the guidelines at 5 CFR 1320.5(d)(2).

8. Consultation and Public Comments

a. Public Notice

i. A 60-day notice for the collection was published in the Federal Register on December 20, 2024, at 89 FR 104111. No comments were received during the 60-day comment period.

ii. A 30-day notice for the collection was published in the Federal Register on May 5, 2025, at 90 FR 18969.

b. Consultation

DoD consulted with contracting professionals familiar with these requirements with regard to estimated response times and wage rates for the public and Government burden.

9. Gifts or Payment

No payment or gift will be provided to respondents, other than remuneration of contractors under their contracts.

10. Confidentiality

This information is disclosed only to the extent consistent with prudent business practices and current regulatory, statutory, and Freedom of Information Act requirements. No assurance of confidentiality is provided to respondents. A Privacy Act Statement is not required for this collection because DoD is not requesting individuals to furnish personal information for a system of records. A System of Record Notice (SORN) is not required for this collection because records are not retrievable by personally identifiable information (PII). A Privacy Impact Assessment (PIA) is not required for this collection because PII is not being collected electronically.

11. Sensitive Questions

No sensitive questions are involved.

12. Respondent Burden and its Labor Costs

a. Estimation of Respondent Burden

Estimates are based on information available in FPDS for fiscal year (FY) 2022 through FY 2024. Respondents are those who choose to sell goods and services through FMS arrangements and obtain progress payments financing.

The average number of respondents and contract awards for this submission is based on FPDS data for fiscal year (FY) 2022 through FY 2024, which is 106.7 (rounded to 107) unique contractors representing 171.3 contract actions on an annual basis. These 171.3 contract actions would each require 12 monthly reports during the year, which equals 2,056 responses. The total annual responses were calculated by taking the average number of contract actions valued at greater than $25,000 with FMS funding and progress payment financing for the period FY 2022 through FY 2024 (equals 171.3 actions) and multiplying by 12 submissions per contract (equals 2,056 responses).

Recordkeeping hours consist of the estimated time necessary to maintain the information internally, considering most companies already have accounting practices for tracking incurred costs.

Estimation of Respondent Burden Hours: DFARS 252.232-7002
Number of respondents (rounded)	107
Number of responses per respondent (rounded)	19.2
Number of total annual responses	2,056
Hours per response	0.5
Annual respondent burden hours (Total annual responses hours per response)	1,028
Recordkeeping hours per response	1.0
Recordkeeping hours total	2,056
Total hours of recordkeeping and response	1.5
Annual burden rate per recordkeeping and response	3,084

b. Labor Cost of Respondent Burden

The hourly labor rate for responses is based on the General Schedule (GS) rate for a GS-11, step 5 for 2024 plus 36.25% Civilian Position Full Fringe Benefit Cost Factor per OMB Memorandum M-08-13 ($39.40 X 136.25% = $53.68 rounded to $54 per hour). The hourly labor rate for recordkeeping is based on the rate for a GS-7, step 5 salary for 2024 plus 36.25% Civilian Position Full Fringe Benefit Cost Factor for 2012 per OMB Memorandum M-08-13 ($26.62 X 136.25% = $36.27 rounded to $36 per hour).

Labor Cost of Respondent Burden: DFARS 252.232-7002
Number of total annual responses and recordkeeping	2,056
Hours per response	0.5
Hours per recordkeeping	1.0
Cost per hour for responses (hourly wage)	$54
Cost per hour for recordkeeping	$36
Labor burden per response (hourly wage)	$27
Labor burden per record	$36
Annual Labor Burden for responses	$55,512
Annual Labor Burden for recordkeeping	$74,016
Total	$129,528

13. Respondent Costs Other Than Burden Hour Costs

We estimate that there are no nonrecurring expenses (e.g., capital and start-up). The clause at DFARS 252.232-7002 is authorized for use when the clause at FAR 52.232-16, Progress Payments, is used as a method of contract financing and the contract includes FMS requirements. Paragraph (f) states, “The Contractor shall maintain an accounting system and controls adequate for the proper administration of this clause”. Our assessment is that this system and related controls are normally in place prior to obtaining a contract for FMS supplies and services, since they are required for the contractor to receive progress payments for U.S. supplies and services. Therefore, there is no additional nonrecurring charge needed to establish or revise accounting systems already in place.

14. Cost to the Federal Government

a. Labor Cost to the Federal Government

The time estimates are based on the time required for the Government to receive, review, and analyze the information submitted by the contractor.

Labor Cost to the Federal Government: DFARS 252.232-7002
Number of total annual responses	2,056
Hours per response	1.0
Cost per hour (hourly wage)	$54
Cost per response	$54
Total Cost	$111,024

b. Operational and Maintenance Costs

There are no operational or maintenance costs for the Government that are associated with this information collection.

c. Total Cost to the Federal Government

Total labor burden	$111,024
Total operational and maintenance costs	$0
Total cost to the Federal Government	$111,024

15. Reasons for Change in Burden

The estimate of public burden hours is decreased based on the most recent data available in FPDS. In addition, current wage rates from OPM for GS-employee equivalents were used. The following table reflects the change in burden:

0704-0321
Change in Burden	2021 Estimate	2024 Estimate	Difference
Number of respondents	149	107	-42
Responses per respondent	20	19.2	-1
Total annual responses	2,928	2,056	-872
Hours per response	1.5	1.5	-
Total hours	4,392	3,084	-1,308
Total annual cost to public	$163,953	$129,528	-$34,425

16. Publication of Results

The results of this information collection will not be published.

17. Non-Display of OMB Expiration Date

DoD does not seek approval to omit the display of the expiration date for OMB approval of the information collection.

18. Exceptions to “Certification for Paperwork Reduction Submissions”

There are no exceptions to the certification accompanying this Paperwork Reduction Act submission.

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