32.001 Definitions.

As used in this part—

Commercial interim payment means any payment that is not a commercial advance payment or a

delivery payment. These payments are contract financing payments for prompt payment purposes

(i.e., not subject to the interest penalty provisions of the Prompt Payment Act in accordance with

subpart 32.9). A commercial interim payment is given to the contractor after some work has been

done, whereas a commercial advance payment is given to the contractor when no work has been

done.

Contract action means an action resulting in a contract, as defined in subpart 2.1, including actions

for additional supplies or services outside the existing contract scope, but not including actions that

are within the scope and under the terms of the existing contract, such as contract modifications

issued pursuant to the Changes clause, or funding and other administrative changes.

Contract financing payment means an authorized Government disbursement of monies to a

contractor prior to acceptance of supplies or services by the Government.

(1) Contract financing payments include-

(i) Advance payments;

(ii) Performance-based payments;

(iii) Commercial advance and interim payments;

(iv) Progress payments based on cost under the clause at 52.232-16, Progress Payments;

(v) Progress payments based on a percentage or stage of completion (see 32.102(e)), except those

made under the clause at 52.232-5, Payments Under Fixed-Price Construction Contracts, or the

clause at 52.232-10, Payments Under Fixed-Price Architect-Engineer Contracts; and

(vi) Interim payments under a cost reimbursement contract, except for a cost reimbursement

contract for services when Alternate I of the clause at 52.232-25, Prompt Payment, is used.

(2) Contract financing payments do not include-

(i) Invoice payments;

(ii) Payments for partial deliveries; or

(iii) Lease and rental payments.

Customary contract financing means that financing deemed by an agency to be available for routine

use by contracting officers. Most customary contract financing arrangements should be usable by

contracting officers without specific reviews or approvals by higher management.

Delivery payment means a payment for accepted supplies or services, including payments for

accepted partial deliveries. Commercial financing payments are liquidated by deduction from these

payments. Delivery payments are invoice payments for prompt payment purposes.
Designated billing office means the office or person (governmental or nongovernmental) designated

in the contract where the contractor first submits invoices and contract financing requests. The

contract might designate different offices to receive invoices and contract financing requests. The

designated billing office might be-

(1) The Government disbursing office;

(2) The contract administration office;

(3) The office accepting the supplies delivered or services performed by the contractor;

(4) The contract audit office; or

(5) A nongovernmental agent.

Designated payment office means the office designated in the contract to make invoice payments or

contract financing payments. Normally, this will be the Government disbursing office.

Due date means the date on which payment should be made.

Invoice payment means a Government disbursement of monies to a contractor under a contract or

other authorization for supplies or services accepted by the Government.

Invoice payments includePayments for partial deliveries that have been accepted by the Government;

Final cost or fee payments where amounts owed have been settled between the Government and the

contractor;

For purposes of subpart 32.9 only, all payments made under the clause at 52.232-5, Payments

Under Fixed-Price Construction Contracts, and the clause at 52.232-10, Payments Under Fixed-Price

Architect-Engineer Contracts; and

Interim payments under a cost-reimbursement contract for services when Alternate I of the clause at

52.232-25, Prompt Payment, is used

Invoice payments do not include contract financing payments.

Liquidate means to decrease a payment for an accepted supply item or service under a contract for

the purpose of recouping financing payments previously paid to the contractor.

Unusual contract financing means any financing not deemed customary contract financing by the

agency. Unusual contract financing is financing that is legal and proper under applicable laws, but

that the agency has not authorized contracting officers to use without specific reviews or approvals

by higher management.

Parent topic: Part 32 - Contract Financing