**PART 1832**

# CONTRACT FINANCING

**TABLE OF CONTENTS**

1832.006-2 Definition.

1832.007 Contract financing payments.

**SUBPART [1832.1](#OLE_LINK1) NON-COMMERICAL ITEM PURCHASE FINANCING**

1832.111 Contractor clauses for non-commercial purchases.

1832.111-70 NASA contract clause.

**SUBPART [1832.2](#OLE_LINK2) COMMERCIAL ITEM PURCHASE FINANCING**

1832.202-1 Policy.

1832.206 Solicitation provisions and contract clauses.

**SUBPART [1832.4](#OLE_LINK4) ADVANCE** **PAYMENTS FOR NON-COMMERCIAL
ITEMS**

1832.402 General.

1832.406 Letters of credit.

1832.407 Interest.

1832.409 Contracting officer action.

1832.409-1 Recommendation for approval.

1832.409-170 NASA procedure for approval.

1832.410 Findings, determination, and authorization.

1832.412 Contract clause.

1832.412-70 NASA contract clauses.

**SUBPART [1832.5](#OLE_LINK5) PROGRESS** **PAYMENTS** **BASED** **ON
COSTS**

1832.501 General.

1832.501-1 Customary progress payment rates.

1832.501-2 Unusual progress payments.

1832.502 Preaward matters.

1832.502-2 Contract finance office clearance.

1832.502-4 Contract clauses.

1832.502-470 NASA contract clause.

1832.503 Postaward matters.

1832.503-5 Administration of progress payments.

1832.504 Subcontracts.

**SUBPART [1832.7](#OLE_LINK7) CONTRACT** **FUNDING**

1832.702 Policy.

1832.702-70 NASA policy.

1832.704 Limitation of cost or funds.

1832.704-70 Incrementally funded fixed-price contracts.

1832.705 Contract clauses.

1832.705-2 Clauses for limitation of cost or funds.

1832.705-270 NASA clauses for limitation of cost or funds.

**SUBPART [1832.9](#OLE_LINK9) PROMPT PAYMENT**

1832.908 Contract clauses.

**SUBPART [1832.10](#OLE_LINK10) PERFORMANCE-BASED PAYMENTS**

1832.1001 Policy.

1832.1004 Procedure.

1832.1005 Contract clauses.

1832.1009 Title.

## 

## **SUBPART [1832.11](#subpart-1832.11--electronic-funds-transfer) ELECTRONIC FUNDS TRANSFER**

1832.1110 Solicitation provision and contract clauses.

**PART 1832**

# CONTRACT FINANCING

**1832.006-2 Definition.**

The Director, Acquisition Integrity Program is the Agency remedy
coordination official.

**1832.007 Contract financing payments.**

(a)(1) Except as authorized in 1832.908, it is NASA's policy to make
contract financing payments on the 30^th^ day after the designated
billing office has received a proper request. However, the due date for
making contract financing payments for a specific contract may be
earlier than the 30th day, but not earlier than 7 days, after the
designated billing office has received a proper request, provided that:

**(i)** The contractor provides consideration whose value is determined
to be greater than the cost to the United States Treasury of interest on
funds paid prior to the 30th day, calculated using the [**Current Value
of Funds Rate**](http://www.fms.treas.gov/fedreg/fundrate.html)
published annually in the Federal Register (subject to quarterly
revision);

**(ii)** The contracting officer approves the payment date change, with
the concurrence of the installation Financial Management Officer; and

**(iii)** The contract file includes documentation regarding the value
of the consideration and the analysis determining that value.

**Subpart** []{#OLE_LINK1 .anchor}**1832.1**\--**Non-Commercial Item
Purchase Financing**

**1832.111**  **Contract** **clauses for non-commercial purchases.**

**1832.111-70 NASA** **contract** **clause.**

The contracting officer shall insert the clause at
[**1852.232-79**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.232-79),
Payment for On-Site Preparatory Costs, in solicitations and contracts
for construction on a fixed-price basis when progress payments are
contemplated and pro rata payment of on-site preparatory costs to the
contractor is appropriate.

**Subpart** []{#OLE_LINK2 .anchor}**1832.2\--Commercial Item Purchase
Financing**

**1832.202-1 Policy.**

(b)(6) Advance payment limitations do not apply to expendable launch
vehicle (ELV) service contracts.

**1832.206 Solicitation provisions and contract clauses.**

(g)(2) The installment payment rate shall be that which is common in the
commercial marketplace for the purchased item. If there is no commonly
used rate, the contracting officer shall determine

the appropriate rate. In no case shall the rate exceed that established
in the clause at **[FAR
52.232-30](http://www.arnet.gov/far/current/html/52_232.html#1107766).**

**Subpart** []{#OLE_LINK4 .anchor}**1832.4\--Advance Payments for
Non-Commercial Items**

**1832.402 General.**

(e)(1) The Director of the Headquarters Office of Procurement Contract
Management Division (Code HK) is the approval authority for all advance
payments except the following:

**(A)** The procurement officer is the approval authority for non-fee
bearing contracts with domestic entities when the cumulative contract
value is \$25,000,000 or less, and for all increases to such contracts
over \$25,000,000 previously approved by the Headquarters Office of
Procurement as long as the advance payment amount outstanding at any
time is not increased.

**(B)** The contracting officer is the approval authority for the
following actions. In these cases, a findings and determination (see
[**FAR
32.410**](http://www.arnet.gov/far/current/html/Subpart_32_4.html#998347))
is not required.

***(a)*** Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) Phase I contracts. A class deviation has been
signed authorizing use of advance payments on these contracts. The
contracting officer shall annotate the contract file that the deviation
is on file at the NASA Headquarters Office of Procurement (Code HK).

***(b)*** Expendable launch vehicle (ELV) service contracts. 42 U.S.C.
2459c authorizes advance payments for these contracts. The contracting
officer shall document the contract file with the rationale for
approving the use of advance payments.

(e)(2) All advance payment authorization requests, except those
authorized by 1832.402(e)(1)(B), shall be coordinated with the
installation Deputy Chief Financial Officer.

**1832.406 Letters of credit.**

(b)(1) Each installation is considered a contracting agency for the
purposes of this requirement.

**1832.407 Interest.**

(d)(1) Advance payments without interest are authorized.

**1832.409 Contracting officer action.**

1.  **Recommendation for approval.**

**1832.409-170 NASA procedure for approval.**

In addition to the items listed in [**FAR
32.409-1**](http://www.arnet.gov/far/current/html/Subpart_32_4.html#998305),
requests for Headquarters approval of advance payments (see
1832.402(e)(1)) shall include the following information:

\(a\) Name of the cognizant NASA Headquarters program or staff office;

\(b\) Name and phone number of the contracting officer or negotiator;

\(c\) A copy of the proposed advance payments clause;

\(d\) If a profit/fee is contemplated, the factors considered in
determining the profit/fee (see
[**1815.404-470**](http://www.hq.nasa.gov/office/procurement/regs/1815.htm#1815.404-470));

\(e\) Information justifying the adequacy of security to cover the
maximum advance payment amount at any time outstanding.

**1832.410 Findings, determination, and** **authorization.**

\(b\) Generally, the format in [**FAR
32.410**](http://www.arnet.gov/far/current/html/Subpart_32_4.html#998347)
should be used, tailored as follows:

**(i)** In format subparagraph (a)(2), use the phrase \"Advance payments
(in an amount not to exceed \$....\.... at any time outstanding)\" in
all determinations and findings. The phrase means the maximum
unliquidated dollar amount a contractor would need in advance payments
at any point in time for the particular contract. The amount would not
usually be the full contract value. The amount inserted should be based
on an analysis of the contractor\'s financing needs (monthly or other
appropriate period) for the specific contract involved.

**(ii)** In the second sentence of format subparagraph (a)(4), delete
the reference to a special financial institution account if no special
financial institution account is required.

**(iii)** Use format subparagraph (a)(6), not (a)(7) or (a)(8).

**(iv)** At the end of format paragraph (b), use \"is in the public
interest.\"

**(v)** In format paragraph (c), use the phrase "(the amount at any time
outstanding)\" in all determinations and findings.

**1832.412 Contract clause.**

\(e\) The contracting officer shall use Alternates IV and V when advance
payments are

provided on Phase I contracts of the Small Business Innovation Research
(SBIR) or Small Business Technology Transfer (STTR) programs.

\(f\) See 1832.412(e).

**1832.412-70 NASA contract clauses.**

When the clause at [**FAR
52.232-12**](http://www.arnet.gov/far/current/html/52_232.html#1107135)
or its Alternates II or V are used, insert the clause at
[**1852.232-70**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.232-70),
NASA Modification of FAR 52.232-12.

**Subpart** []{#OLE_LINK5 .anchor}**1832.5\--Progress Payments** **Based
on Costs**

**1832.501 General.**

**1832.501-1 Customary progress payment** **rates.**

\(a\) The customary progress payment rate for all NASA contracts is 85
percent for large business, 90 percent for small business, 95 percent
for small disadvantaged business, and 100 percent for Phase II contracts
in the Small Business Innovation Research (SBIR) and Small Business
Technology Transfer (STTR) programs. The contracting officer shall
insert the applicable percentage in paragraphs (a) and (b) of the clause
at [**FAR
52.232-16**](http://www.arnet.gov/far/current/html/52_232.html#1107322).

**1832.501-2 Unusual** **progress** **payments.**

The Director of the Headquarters Office of Procurement, Contract
Management Division (Code HK) is the approval authority for the use of
unusual progress payments.

**1832.502 Preaward** **matters.**

**1832.502-2 Contract** **finance** **office** **clearance.**

The Director of the Headquarters Office of Procurement Contract
Management Division (Code HK) is the approval authority for the actions
at [**FAR
32.502-2**](http://www.arnet.gov/far/current/html/Subpart_32_5.html#998486),
except the Assistant Administrator for Procurement (Code HK) is the
approval authority for any deviations addressed in FAR 32.502-2(b).

**1832.502-4 Contract clauses.**

**1832.502-470 NASA contract clause.**

The contracting officer may insert a clause substantially as stated at
[**1852.232-82**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.232-82),
Submission of Requests for Progress Payments, in fixed-price
solicitations and contracts that provide for progress payments. The
recipient of the requests and number of copies may be changed as
required.

**1832.503 Postaward matters.**

**1832.503-5 Administration of progress payments.**

(c)(i) If the contractor requests it and the contracting officer
approving individual progress payments agrees, the administration of
progress payments may be based on the overall contract agreement. Under
this method, the contractor must include a supporting schedule with each
request for a progress payment. The schedule should identify the costs
applicable to each order.

\(ii\) The contracting officer may treat a group of orders as a single
unit for administration of progress payments if each order in the group
is subject to a uniform liquidation rate and under the jurisdiction of
the same payment office.

**1832.504 Subcontracts.**

\(c\) Unusual progress payments to subcontractors shall be approved in
accordance with 1832.501-2.

**Subpart** []{#OLE_LINK7 .anchor}**1832.7\--Contract Funding**

**1832.702 Policy.**

**1832.702-70 NASA policy.**

\(a\) Cost-reimbursement contracts may be incrementally funded only if
all the following conditions are met:

\(1\) The total value of the contract (including options as defined in
[**FAR Subpart
17.2**](http://www.arnet.gov/far/current/html/Subpart_17_2.html#1046478))
is\--

\(i\) \$500,000 or more for R&D contracts under which no supplies are
deliverable; or

\(ii\) \$1,000,000 or more for all other contracts.

\(2\) The period of performance exceeds one year.

\(3\) The funds are not available to fund the total contract value fully
at award.

\(4\) Initial funding of the contract is \$100,000 or more.

\(b\) Fixed-price contracts, other than those for research and
development, shall not be incrementally funded.

\(c\) (1) Fixed-price contracts for research and development may be
incrementally funded if the conditions of 1832.702-70(a)(1) through (4)
are met and the initial funding of the contract is at least 50 percent
of the total fixed price.

\(2\) Incrementally funded fixed-price contracts shall be fully funded
as soon as adequate funding becomes available.

\(d\) Except for a modification issued to fully fund a contract,
incremental funding modifications shall not be issued for amounts
totaling less than \$25,000.

\(e\) Except for a modification issued to close out a contract,
modifications deobligating funds shall not be issued for amounts
totaling less than \$25,000.

\(f\) The procurement officer, with the concurrence of the installation
Comptroller, may waive any of the conditions set forth in paragraphs
1832.702-70(a) through (e). The procurement officer shall maintain a
record of all such approvals during the fiscal year.

\(g\) A class deviation from the conditions set forth in paragraphs
1832.702-70(a) through (e) exists to permit incremental funding of
contracts under Phase II of the Small Business Innovation Research
(SBIR) and Small Business Technology Transfer (STTR) programs. This
deviation exists with the understanding that the contracts will be fully
funded when funds become available.

**1832.704 Limitation of cost or funds.**

**1832.704-70 Incrementally funded fixed-price contracts.**

\(a\) Upon receipt of the contractor\'s notice under paragraph (c)(1) of
the clause at
[**1852.232-77,**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.232-77)
Limitation of Funds (Fixed-Price Contract), the contracting officer
shall promptly provide written notice to the contractor that the
Government is \--

\(1\) Allotting additional funds in a specified amount for continued
performance;

\(2\) Terminating the contract; or

\(3\) Considering whether to allot additional funds; and

\(i\) The contractor is entitled to stop work in accordance with
paragraph (b) of the clause at 1852.232-77, Limitation of Funds; and

\(ii\) Any costs expended beyond the amount specified in paragraph (a)
of the clause at 1852.232-77, Limitation of Funds, are incurred at the
contractor\'s risk.

\(b\) Upon determining that the contract will receive no further funds,
the contracting officer shall promptly give notice of the Government\'s
decision and terminate for the convenience of the Government.

**1832.705 Contract clauses.**

**1832.705-2 Clauses for limitation of cost or funds.**

**1832.705-270 NASA clauses for** **limitation of cost or funds.**

\(a\) The contracting officer shall insert the clause at
[**1852.232-77**](http://www.hq.nasa.gov/office/procurement/regs/5228-41.htm#1852.232-77),
Limitation of Funds (Fixed-Price Contract), in solicitations and
contracts for fixed-price incrementally funded research and development.

\(b\) The contracting officer shall insert a clause substantially as
stated at 1852.232-81, Contract Funding, in Section B of solicitations
and contracts containing the clause at [**FAR
52.232-22**](http://www.arnet.gov/far/current/html/52_232.html#1107476),
Limitation of Funds. Insert the amounts of funds available for payment,
the items covered, and the applicable period of performance. The amount
obligated for fee in paragraph (b) of the clause should always be
sufficient to pay fee anticipated to be earned for the work funded by
the amount in paragraph (a) of the clause.

**Subpart** []{#OLE_LINK9 .anchor}**1832.9\--Prompt Payment**

**1832.908 Contract clauses.**

(c)(2) When the clause at [**FAR
52.232-25**](http://www.arnet.gov/far/current/html/52_232.html#1107512),
Prompt Payment, is used in such contracts with the Canadian Commercial
Corporation (CCC), insert \"17^th^\" in lieu of \"30^th^\" in paragraphs
(a)(1)(i)(A), (a)(1)(i)(B), and (a)(1)(ii).

**Subpart** []{#OLE_LINK10 .anchor}**1832.10\--Performance-Based
Payments**

**1832.1001 Policy.**

(a)(i) In determining whether performance-based payments are practical
in competitive negotiated acquisitions, the contracting officer should
consider the procedural impacts (e.g., proposal evaluation
complications, longer evaluations, elimination of the potential for
award without discussions, increased proposal information requirements)
and the impact on small business competitiveness.

\(ii\) The contracting officer must obtain approval from the Director of
the Headquarters Office of Procurement Contract Management Division
(Code HK) to use performance-based payments in competitive negotiated
solicitations under \$50M. The request for approval must include an
assessment of the practicality of using performance-based payments, as
well as the proposed performance-based payments evaluation approach (see
1832.1004(e)(1)(ii)).

**1832.1004 Procedures.**

\(a\) See
[**1815.201(c)(6)(E)**](http://www.hq.nasa.gov/office/procurement/regs/1815.htm#1815.201)
for establishing performance bases and payment terms in competitive
negotiated acquisitions.

(e)(1)(ii) Use of the price adjustment evaluation technique may require
obtaining and analyzing proposal information that is normally not
required in NASA firm-fixed-price competitions (see
[**1815.403-3**](http://www.hq.nasa.gov/office/procurement/regs/1815.htm#P425-45564%2315.403)).
When using performance-based payments in competitive negotiated
acquisitions under \$50 million, contracting officers should consider
the use of alternative evaluation methods, e.g., qualitative evaluation
under Mission Suitability or another appropriate factor.

**1832.1005 Contract clauses.**

\(a\) If the contract is for launch services, the contracting officer
shall delete paragraph (f) of the clause at [**FAR
52.232-32**](http://www.arnet.gov/far/current/html/52_232.html#1107808)
in accordance with 1832.1009.

(b)(2) Contracting officers shall not use Alternate I in competitive
negotiated acquisitions under \$50 million, unless approval has been
obtained to use performance-based payments (see 1832.1001(a)(ii)).

**1832.1009 Title.**

In accordance with 42 U.S.C. 2465d, NASA shall not take title to launch
vehicles under contracts for launch services unless one of the
exceptions in the law applies. However, the law does not eliminate
NASA\'s right to take title to other property acquired or produced by
the contractor under a contract containing a title provision.

## **Subpart** **1832.11\--Electronic Funds Transfer**

**1832.1110 Solicitation provision and contract clauses.**

(a)(1) NASA does not use the Central Contractor Registration. Use the
clause at [**FAR
52.232-34**](http://www.arnet.gov/far/current/html/52_232.html#1107890),
Payment by Electronic Funds Transfer\--Other than Central Contractor
Registration.

\(b\) In accordance with [**FAR
32.1106(b)**](http://www.arnet.gov/far/current/html/Subpart_32_11.html#999296),
the use of a nondomestic EFT mechanism is authorized. When a nondomestic
EFT mechanism is used, the contracting officer shall replace the
paragraph at [**FAR
52.232-34(c)**](http://www.arnet.gov/far/current/html/52_232.html#1107890)
with a description of the EFT mechanism that will be used for the
contract.

\(c\) The payment office shall be the designated office for receipt of
contractor EFT information for all NASA contracts.