Part 5332 - Contract Financing

DAFFARS PART 5332 Knowledge Center

2019 Edition

Revised: June 2023

Subpart 5332.1 – FINANCING FOR OTHER THAN A COMMERCIAL PURCHASE

5332.104 Providing Contract Financing

Subpart 5332.2 – COMMERCIAL PRODUCT AND COMMERCIAL SERVICE PURCHASE FINANCING

5332.202-1 Policy

Subpart 5332.4 – ADVANCE PAYMENTS FOR OTHER THAN COMMERCIAL ACQUISITIONS

5332.402 General

Subpart 5332.5 – PROGRESS PAYMENTS BASED ON COSTS

5332.501-2 Unusual Progress Payments

5332.501-3 Contract Price

Subpart 5332.6 – CONTRACT DEBTS

5332.604 Demand for Payment

5332.607 Installment Payments and Deferment of Collection

Subpart 5332.7 – CONTRACT FUNDING

5332.703-2 Contracts Conditioned Upon Availability of Funds

Subpart 5332.9 – PROMPT PAYMENT

5332.901 Applicability

5332.906 Making Payments

Subpart 5332.11 – ELECTRONIC FUNDS TRANSFER

5332.1106 EFT Mechanisms

Subpart 5332.1 – FINANCING FOR OTHER THAN A

COMMERCIAL PURCHASE
5332.104 Providing Contract Financing

(a)(5) Report known adverse developments affecting a contractor or subcontractor to the contract

administration office, other interested Government parties, and the SCO. If there is an adverse

development affecting a contractor receiving a bank loan guaranteed by the Department of the Air

Force, progress payments, or advance payments, the contracting office must report the adverse

development, its expected impact upon continued satisfactory performance under the contract,

remedial actions taken to date (if any), and any recommendations for further action through the SCO

to the cognizant HCA Workflow.

(c)(2) The contracting officer must submit any unusual financing requests by a contractor to the SCO

contracting staff for consultation. If the SCO determines unusual financing is required, the SCO

must submit a memorandum outlining the pertinent facts together with a recommendation on the

action to be taken through the cognizant HCA Workflow to SAF/FMF no later than 30 days before

the needed effective date of the proposed financing arrangement.

Subpart 5332.2 – COMMERCIAL PRODUCT AND

COMMERCIAL SERVICE PURCHASE FINANCING

5332.202-1 Policy

(b) Authorization. For commercial product and commercial service purchase financing authorized by

FAR 32.202-1(b) that does not require OUSD(A&S)/DPC approval of an individual or class deviation

from FAR Part 32 requirements, the contracting officer shall submit all commercial interim payment

requests and commercial advance payment requests through the SCO to local FM for review and

approval. Prior to submitting to the local FM for approval, the SCO must determine the package is

adequate, complete, and justified. The request must include the following: a determination that the

applicable circumstances outlined in FAR 32.202-1(b) have been met to include the contracting

officer’s determination in accordance with FAR 32.202-1(b)(3) and preliminary payment office

concurrence with liquidation provisions per 32.202-1(b)(8) when required by FAR 32.206(e), legal

review, J&A (if applicable), background paper such as a Milestone Payment Plan that outlines the

reason(s) for the request, and the proposed payment schedule. Submit a copy of the approved

package to the cognizant HCA Workflow.

(d) Unusual contract financing. See MP5301.601(a)(i).

Subpart 5332.4 – ADVANCE PAYMENTS FOR OTHER THAN

COMMERCIAL ACQUISITIONS

5332.402 General

(c)(1)(iii) See MP5301.601(a)(i).

(e)(2) The contracting officer must submit each advance payment request through the SCO to the

cognizant HCA Workflow for submission to SAF/FMF for review and approval. See MP5332.470 for
processing advance payment requests.

Subpart 5332.5 – PROGRESS PAYMENTS BASED ON COSTS

5332.501-2 Unusual Progress Payments

(a)(3) The contracting officer must submit contractor requests for unusual progress payments

through the SCO to the cognizant HCA Workflow with a recommendation to approve or disapprove

the request. The cognizant HCA will forward all requests for unusual progress payments, whether

recommended for approval or disapproval, to SAF/FMF with all pertinent data supporting the

recommended action for approval and submission to OUSD(A&S)/DPC.

5332.501-3 Contract Price

(a) When the estimated contract costs increase such that the estimate of the unusual progress

payments increase $20 million or more over the approved unusual progress payment estimate, the

contracting officer must notify SAF/FMF through their SCO, with a courtesy copy to the cognizant

HCA Workflow .

Subpart 5332.6 – CONTRACT DEBTS

5332.604 Demand for Payment

(b) Payment information for the demand for payment letter can be found at:

https://www.dfas.mil/contractorsvendors/governmentremittance/returnfunds.html

(e) Contracting officers must retain a copy of all contract debt documentation in the contract file and

must keep the contract file open until the debt is collected and/or written-off.

5332.607 Installment Payments and Deferment of Collection

(a) When a request for deferment of a contract debt is received from a contractor, the contracting

officer must forward the request for deferment to the SCO. The SCO must submit, on a priority

basis, an evaluation of the contractor’s request with the necessary reporting information and

recommendation through the cognizant HCA Workflow mailto:SAF.AQ.SAFAQC.Workflow@us.af.milto SAF/FMF.

Subpart 5332.7 – CONTRACT FUNDING
5332.703-2 Contracts Conditioned Upon Availability of Funds

(a) Fiscal year contracts. See MP5332.7 on contract funding. See DFARS 204.7103 for guidance on

considering severability when forming contracts and determining contract funding.

Subpart 5332.9 – PROMPT PAYMENT

5332.901 Applicability

(1)(ii) See MP5301.601(a)(i).

5332.906 Making Payments

(a) See MP5301.601(a)(i).

Subpart 5332.11 – ELECTRONIC FUNDS TRANSFER

5332.1106 EFT Mechanisms

(b) See MP5301.601(a)(i).