Certain Federal Acquisition Regulation Part 32 Requirements - FAR Sections Affected: 32.408(b), 52.232-1 through 52.232-7, 52.232-10, 52.232-12, 52.232-20, 52.232-22, 52.232-27, 52.232-33, 52.232-34

FAR 32.408, Application for advance payments. In accordance with FAR 32.408(b), contractors requesting advance payments must submit their request in writing to the contracting officer and provide the following information: ● A reference to the contract if the request concerns an existing contract, or a reference to the solicitation if the request concerns a proposed contract. ● A cash flow forecast showing estimated disbursements and receipts for the period of contract performance. ● The proposed total amount of advance payments. ● The name and address of the financial institution at which the contractor expects to establish a special account as depository for the advance payments. ● A description of the contractor's efforts to obtain unguaranteed private financing or a V-loan under eligible contracts. FAR 52.232-1 through 52.232-4, 52.232-6, 52.232-7, and 52.232-10 - Payments. This clause requires the contractor's request for progress payments to include substantiation. FAR 52.232-12, Advance Payments. For authority behind this clause, see the authority for advance payments cited in the narrative above for FAR 32.408. If advance payments are authorized, this clause requires contractors to submit the following: ● Per paragraph (g) - The financial institution agreement, in the form prescribed by the administering office, establishing the special account, and clearly setting forth the special character of the account and the responsibilities of the financial institution under the account. ● Per paragraph (i)(3) – Notification of a lien in favor of the Government to a third person receiving any items or materials on which the Government has a lien, and a receipt from that third person acknowledging the existence of the lien. Contractors are also required to provide a copy of each receipt to the contracting officer. ● Per paragraph (m) – (1) Monthly, signed or certified balance sheets and profit and loss statements together with a report on the operation of the special account in the form prescribed by the administering office; and (2) If requested, other information concerning the operation of the contractor's business. (This same requirement is at paragraph (j) of the clause with its Alternate V.) FAR 52.232-20 and 52.232-22 - Limitation of Costs or Funds. FAR clause 52.232-20, Limitation of Cost, requires the contractor to notify the contracting officer in writing whenever it has reason to believe that - ● The costs the contractors expect to incur under the contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost of the contracts; or ● The total cost for the performance of the contract will be greater or substantially less than estimated. FAR clause 52.232-22, Limitation of Funds, requires the contractor to notify the contracting officer in writing whenever it has reason to believe that the costs it expects to incur under the contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of (1) the total amount so far allotted to the contract by the Government or, (2) if this is a cost-sharing contract, the amount then allotted to the contract by the Government plus the contractor's corresponding share. FAR 52.232-27, Prompt Payment for Construction Contracts. The authority for this FAR clause is the OMB prompt payment regulations at 5 CFR Part 1315, which in turn implements the Prompt Payment statute. FAR 52.232-33, Payment by Electronic Funds Transfer—System for Award Management. FAR clause 52.232-33 requires contractors to provide updated EFT information in the System for Award Management (SAM) if their information changes. FAR 52.232-34, Payment by Electronic Funds Transfer—Other than System for Award Management. This clause requires contractors to provide information to enable the Government to make payments under the contract by EFT.

The latest form for Certain Federal Acquisition Regulation Part 32 Requirements - FAR Sections Affected: 32.408(b), 52.232-1 through 52.232-7, 52.232-10, 52.232-12, 52.232-20, 52.232-22, 52.232-27, 52.232-33, 52.232-34 expires 2028-07-31 and can be found here.

Advance Payments

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