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  • Question

    Can or should we have progress pay on a contract that has both FFP and Cost type CLINS? How do we manage this?


    Answer

    Progress payments are only applicable to the FFP clins.  Progress payments are a form of contract financing and are liquidated upon delivery of the final supply/service. We take it into consideration for our profit objective on the weighted guidelines when the price is negotiated. 

    FAR Part 32
    provides the guidance for application of progress payments.  Under a cost type contract, the principles of which I believe translate to the cost clins in a mixed contract, the vehicle provides for payment of allowable incurred costs, there is no liquidation and there is different profit consideration when negotiating final price.  As a hybrid contract, it will need to implement two sets of clauses - one for invoicing on the cots type clins and one for progress payments on the fixed price clins. 

    Refer to
    FAR Part 32 and seek guidance from the Administrative Contracting Office for proper set up within the contract vehicle.
     
     

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