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  • Question

    Can a contractor offer its subcontractors commercial interim payments when procuring commercial items? If so, is FAR 32.202-1 applicable and is contracting officer approval needed? If not, what other options does a contractor have in regards to financing commercial items? If a subcontractor requires payment prior to product delivery, can the contractor bill the Government after receiving/paying the invoice?


    Answer

    Yes, FAR 32.202-1 regarding Government financing for commercial items is applicable in this case assuming the conditions at 32.202-1(b) are met. Of course it is the Government contracting officer's determination as to whether such an arrangement (i.e., paying invoices prior to product delivery) is standard commercial practice for those items AND if it's in the Government's interest to do so.

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