52.216-26 Payments of Allowable Costs

Before Definitization.

As prescribed in 16.603-4(c), insert the following clause:

Payments of Allowable Costs Before Definitization (Dec 2002)

(a) Reimbursement rate. Pending the placing of the definitive contract referred to in this letter

contract, the Government will promptly reimburse the Contractor for all allowable costs under this

contract at the following rates:

(1) One hundredpercent of approved costs representing financing payments to subcontractors under

fixed-price subcontracts, provided that the Government’s payments to the Contractor will not exceed

80 percent of the allowable costs of those subcontractors.

(2) One hundredpercent of approved costs representing cost-reimbursement subcontracts; provided,

that the Government’s payments to the Contractor shall not exceed 85 percent of the allowable costs

of those subcontractors.

(3) Eighty-fivepercent of all other approved costs.

(b) Limitation of reimbursement. To determine the amounts payable to the Contractor under this

letter contract, the Contracting Officer shall determine allowable costs in accordance with the

applicable cost principles in part 31 of the Federal Acquisition Regulation (FAR). The total

reimbursement made under this paragraph shall not exceed 85 percent of the maximum amount of

the Government’s liability, as stated in this contract.

(c) Invoicing. Payments shall be made promptly to the Contractor when requested as work

progresses, but (except for small business concerns) not more often than every 2 weeks, in amounts

approved by the Contracting Officer. The Contractor may submit to an authorized representative of

the Contracting Officer, in such form and reasonable detail as the representative may require, an

invoice or voucher supported by a statement of the claimed allowable cost incurred by the

Contractor in the performance of this contract.

(d) Allowable costs. For the purpose of determining allowable costs, the term "costs" includes-

(1) Those recorded costs that result, at the time of the request for reimbursement, from payment by

cash, check, or other form of actual payment for items or services purchased directly for the

contract;

(2) When the Contractor is not delinquent in payment of costs of contract performance in the

ordinary course of business, costs incurred, but not necessarily paid, for-

(i) Supplies and services purchased directly for the contract and associated financing payments to

subcontractors, provided payments determined due will be made-

(A) In accordance with the terms and conditions of a subcontract or invoice; and

(B) Ordinarily within 30 days of the submission of the Contractor’s payment request to the

Government;
(ii) Materials issued from the Contractor’s stores inventory and placed in the production process for

use on the contract;

(iii) Direct labor;

(iv) Direct travel;

(v) Other direct in-house costs; and

(vi) Properly allocable and allowable indirect costs as shown on the records maintained by the

Contractor for purposes of obtaining reimbursement under Government contracts; and

(3) The amount of financing payments that the Contractor has paid by cash, check, or other forms of

payment to subcontractors.

(e) Small business concerns. A small business concern may receive more frequent payments than

every 2 weeks.

(f) Audit. At any time before final payment, the Contracting Officer may have the Contractor’s

invoices or vouchers and statements of costs audited. Any payment may be-

(1) Reduced by any amounts found by the Contracting Officer not to constitute allowable costs; or

(2) Adjusted for overpayments or underpayments made on preceding invoices or vouchers.

(End of clause)

Parent topic: 52.216 [Reserved]