Part 32 Contract Financing Flashcards
What is Contact Financing payments?
monies disbursed to the contractor prior to acceptance of supplies and services
What are invoice payments?
monies disbursed upon contractor delivery and after government acceptance of supplies and services. This is NOT a type of contract financing.
FAR 32.102 description of contract financing methods shows what?
allows several methods of financing
Most common financing methods?
Progress payments and performance based payments
FAR 32.104 providing contract financing and certain conditions must be met to utlize financing methods?
Must have a PoP of at least 6 months for LB, 4 months for SB, prior to first delivery.
Contrat price must exceed $3M for large businesses and SAT for small businesses.
Commercial item purchases financing?
only what is customary in the commercial marketplace
What are progress payments?
payments based on the costs incurred by the contractor as work progress.
Customary Progress Payment Rates for DoD?
Financing must not exceed 80% for LB and 90 for SB and 95 for SDB.
Performance-Based payments?
Preferred Government financing method that is based on accomplishment of defined events (milestones) and financing must not exceed 90% of contract price
When can you reduce or suspended progress payments?
Contractor noncompliance Unsatisfactory financial condition execessive inventory Deliquency in payment of costs of performance fair value of undelivered work contracts operating at a loss
When will you use prompt payment?
Applies to Invoice payments
What does FAR 32.904(b) say about prompt payment?
requires the gov payment within 30 days of acceptance of an item or submission of proper invoice, whichever is later.
What happens if the government fails to pay within 30 days?
contractor is entitled to interest.
