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    I work for DCMA as an ACO and have been assigned the above contract. The KTR is now requesting progress payments for the contract. Is there any timeline or deadline that the request can be made? I have looked in the FAR under progress payments and contract financing and am unable to find anything.


    Answer

    :  This response is based on the information provided.  We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.

     

    The FAR addresses the adding progress payments as follows:

    "FAR 32.005  Consideration for contract financing.

          (a)  Requirement. When a contract financing clause is included at the inception of a contract, there shall be no separate consideration for the contract financing clause. The value of the contract financing to the contractor is expected to be reflected in either (1)a bid or negotiated price that will be lower than such price would have been in the absence of the contract financing, or (2) contract terms and conditions, other than price, that are more beneficial to the Government than they would have been in the absence of the contract financing. Adequate new consideration is required for changes to, or the addition of, contract financing after award.

          (b)  Amount of new consideration. The contractor may provide new consideration by monetary or nonmonetary means, provided the value is adequate. The fair and reasonable consideration should approximate the amount by which the price would have been less had the contract financing terms been contained in the initial contract. In the absence of definite information on this point, the contracting officer should apply the following criteria in evaluating whether the proposed new consideration is adequate:

               (1)  The value to the contractor of the anticipated amount and duration of the contract financing at the imputed financial costs of the equivalent working capital.

               (2)  The estimated profit rate to be earned through contract performance."

     

    Neither the DFARS or AFARS adds implemental or supplemental information.

    Based on background information this appears to be within the simplified acquisition threshold and contracted using FAR part 13 procedures.  We note the contract has been extended 20 months.  Part of the determination to add progress payments and the consideration due for adding them is weighing who was responsible for the extensions.

    If the government was the primary cause of the extension then we suggest accepting that as consideration or partial consideration.  If the contractor was the primary cause of the extension then we suggest a reduction in overall price related to the time value of money.  The quality of work performed to date also factors in to your decision.

    If the government had made no payments to date we would strongly suggest progress payments as the contractor has been performing with no cash flow almost two and-a-half years

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