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                            32.005 Consideration for contract financing.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
PartPart 1Part 2Part 3Part 4Part 5Part 6Part 7Part 8Part 9Part 10Part 11Part 12Part 13Part 14Part 15Part 16Part 17Part 18Part 19Part 20Part 21Part 22Part 23Part 24Part 25Part 26Part 27Part 28Part 29Part 30Part 31Part 32Part 33Part 34Part 35Part 36Part 37Part 38Part 39Part 40Part 41Part 42Part 43Part 44Part 45Part 46Part 47Part 48Part 49Part 50Part 51Part 52Part 53
Subpart32.032.132.232.332.432.532.632.732.832.932.1032.11
Section32.00032.00132.00232.00332.00432.00532.00632.00732.00832.009
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32.005 Consideration for contract financing.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.                                                                             (c)                   *Interest.* Except as provided in  subpart  32.4, Advance Payments for Other Than Commercial Acquisitions, the contract shall not provide for any other type of specific charges, such as interest, for contract financing.    **Parent topic:**  Part 32 - Contract Financing
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