Part 5132 - Contract Financing

(Revised 23 March 2022)

5132.006 Reduction or suspension of contract payments upon finding of fraud.

5132.006-1 General.

5132.006-2 Definition.

5132.006-3 Responsibilities.

5132.007 Contract financing payments.

Subpart 5132.1 - Non-Commercial Item Purchase Financing

5132.111 Contract clauses for non-commercial purchases.

5132.114 Unusual contract financing.

Subpart 5132.2 - Commercial Item Purchase Financing

5132.201 Statutory authority.

5132.202 General.

5132.202-1 Policy.

Subpart 5132.4 - Advance Payments for Non-Commercial Items

5132.402 General.

5132.407 Interest.

Subpart 5132.5 - Progress Payments Based on Costs

5132.501 General.

5132.501-2 Unusual progress payments.

Subpart 5132.6 - Contract Debts

5132.606 Debt collection.

5132.607 Installment payments and deferment of collection.

5132.607-2 Deferment of collection.

5132.671 Bankruptcy reporting.

Subpart 5132.7 - Contract Funding

5132.702 Policy.
Subpart 5132.8 - Assignment of Claims

5132.803 Policies.

Subpart 5132.9 - Prompt Payment

5132.901 Applicability.

5132.903 Responsibilities.

5132.906 Making payments.

Subpart 5132.11 - Electronic Funds Transfer

5132.1106 EFT mechanisms.

Subpart 5132.71 - Levies on Contract Payments

5132.7101 Policy and procedures.

5132.006 Reduction or suspension of contract payments

upon finding of fraud.

5132.006-1 General.

(c) The Assistant Secretary of the Army (Acquisition, Logistics and Technology) has the authority to

reduce or suspend contract payments where there is substantial evidence that the contractor’s

request for advance, partial, or progress payments is based on fraud. See Appendix GG for further

delegation.

5132.006-2 Definition.

The Army’s remedy coordination official is the Chief, Procurement Fraud Branch, Office of The Judge

Advocate General; telephone (703) 696-1550; Fax (703) 696-1559.

5132.006-3 Responsibilities.

(b) Report suspected fraud related to advance, partial, or progress payments to the contracting

office’s procurement fraud advisor, who will coordinate the matter as prescribed in Army Regulation

27-40.

5132.007 Contract financing payments.

(a)(3) and (4) The Assistant Secretary of the Army (Acquisition, Logistics and Technology) may

prescribe the periods for payment as described in FAR 32.007(a)(3) and (4). See Appendix GG for
further delegation.

Subpart 5132.1 - Non-Commercial Item Purchase Financing

5132.111 Contract clauses for non-commercial purchases.

(a)(7) The contracting officer must document the contract file with the rationale to support the

amount of payments withheld under FAR 52.232-7(a)(7).

5132.114 Unusual contract financing.

The Director, Defense Procurement and Acquisition Policy, on a non-delegable basis, shall approve

actions as stated in FAR 32.114 and DFARS 201.402(1)(vi).

Subpart 5132.2 - Commercial Item Purchase Financing

5132.201 Statutory authority.

The Assistant Secretary of the Army (Acquisition, Logistics and Technology) shall make the

determination as described at FAR 32.201. See Appendix GG for further delegation.

5132.202 General.

5132.202-1 Policy.

(d) The Director, Defense Procurement and Acquisition Policy, on a non-delegable basis, shall

approve actions as stated in FAR 32.202-1 and DFARS 201.402(1)(vi).

Subpart 5132.4 - Advance Payments for Non-Commercial

Items

5132.402 General.

(c)(1)(iii)(A) The Assistant Secretary of the Army (Acquisition, Logistics and Technology), on a nondelegable basis, shall make the determination that the advance payment is in the public interest as

described at FAR 32.402(c)(1)(iii)(A).

(c)(1)(iii)(B) The Secretary of the Army, on a non-delegable basis, shall make the determination that

the advance payment facilitates the national defense as described at FAR 32.402(c)(1)(iii)(B).
5132.407 Interest.

(d) The Assistant Secretary of the Army (Acquisition, Logistics and Technology) shall make the

authorization as described at FAR 32.407(d).

Subpart 5132.5 - Progress Payments Based on Costs

5132.501 General.

5132.501-2 Unusual progress payments.

(a)(2) Requests for approval of unusual progress payments must include the following

documentation from the contractor:

(A) Monthly cash flow forecasts for the period, which include the additional financing.

(B) Estimated profit and loss statements and balance sheets for the same period as the cash flow

forecast.

(C) The most recent, audited financial statements.

(D) A description of significant events before or after preparation of financial statements that

materially affect the financial condition of the company, the operating statement, or the cash flow

statement.

(3) See DFARS PGI 232.501-2. Submit all unusual progress payments requests to the addressee in

5101.290(b)(3).

Subpart 5132.6 - Contract Debts

5132.606 Debt collection.

(c)(i) Send case files to the contract financing office within 15 calendar days after the end of the 30-

day period following the contracting officer’s demand for payment. The address is as follows:

Defense Finance and Accounting Service-Columbus Center

Attn: DFAS-JDCBB/CO

Debt Management Office, P.O. Box 182559

Columbus, Ohio 43218-2559.

(ii) The case file must include a copy of the contracting officer’s demand; a statement as to whether

or not the contract contains an interest clause; and, if so, a copy of the clause or a reference to the

clause number.
(iii) If the debt represents excess costs incurred in purchasing supplies or services against the

account of a defaulted contractor, the case file shall include –

(A) The name and address of the replacement contractor;

(B) The disbursing office voucher number;

(C) The date paid;

(D) Bills of lading numbers, if any;

(E) The name of the carrier, when applicable; and

(F) The name and symbol number of the disbursing officer.

(iv) If the debt represents liquidated damages, the case file shall include an explanation of the basis

for assessing liquidated damages.

5132.607 Installment payments and deferment of collection.

5132.607-2 Deferment of collection.

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

officer must notify the payment office and advise the payment office identified in the contract that

the contractor’s request is under consideration IAW FAR 32.607-2(b). See AFARS PGI

5132.607-2(c)(2)-1 for further instruction.

5132.671 Bankruptcy reporting.

Send information required in Defense Finance and Accounting Service – Indianapolis Regulation

37-1 to the addressee in 5132.606(c).

Subpart 5132.7 - Contract Funding

5132.702 Policy.

(a)(i) Except as authorized in FAR subparts 17.1 and 32.7 and in paragraphs (a)(ii) and (iii) in this

section, before issuing a solicitation, the contracting officer must have a written statement or

equivalent indicating that sufficient funds are available.

(ii) Contracting officers may issue solicitations for high priority requirements and Research,

Development, Test and Evaluation incrementally funded contracts before ensuring availability of

funds when there is a high probability that the requiring activity will not cancel the requirement. For

foreign military sales cases, contracting officers may issue solicitations after the acceptance of a

foreign military sales case, but before assurance of funds availability when the United States Army

Security Assistance Command determines in writing that the offer appears certain to be accepted.
(A) The contracting officer shall not issue a solicitation under the circumstances in (a)(ii) unless the

comptroller has signed the following statement on the purchase request:

“This requirement is included or provided for in the financial plan for fiscal year ______. The

accounting classification will be _______. This statement is not a commitment of funds.”

(B) The contracting officer shall include the following statement in all solicitations issued pursuant

to this authority when the clause at FAR 52.232-18, Availability of Funds, is not used:

“Funds are not presently available for this acquisition. No contract award will be made until

appropriated funds are made available.”

(C) The operating official designated, by local regulations or by a “delegation of authority” letter, as

the official authorized to certify funds availability, must certify funds available prior to contract

award.

(D) The contracting officer shall not issue a research and development solicitation for a contract that

is incrementally funded over successive years without sufficient planned funds (Future Years

Defense Program) to cover the entire period of the multi-year performance. The head of the

contracting activity may approve an exception, provided the approval identifies steps to revise the

approved Future Years Defense Program to include adequate resources.

(iii) Industrial-funded public activities need not comply with (i) and (ii), when they solicit offers

under the Defense Depot Maintenance Competition Program (Pub. L. 102-396), the Partnership

Program (10 U.S.C. 2208(j)) or competition under the Arsenal Act (10 U.S.C.4532(a)).

Subpart 5132.8 - Assignment of Claims

5132.803 Policies.

(d) The Assistant Secretary of the Army (Acquisition, Logistics and Technology), on a non-delegable

basis, shall make the determination as described at FAR 32.803(d).

Subpart 5132.9 - Prompt Payment

5132.901 Applicability.

(1)(ii) The head of the contracting activity, after consultation with the cognizant comptroller, will

make the determination at DFARS 232.901(1)(ii). See Appendix GG for further delegation.

(3) The head of the contracting activity will make the determination at DFARS 232.901(3). See

Appendix GG for further delegation.

5132.903 Responsibilities.

(a) The Assistant Secretary of the Army (Acquisition, Logistics and Technology) shall perform the
duties as set forth in FAR 32.903(a). See Appendix GG for further delegation.

5132.906 Making payments.

(a) The Assistant Secretary of the Army (Acquisition, Logistics and Technology) shall make the

determination as described in FAR 32.906(a). See Appendix GG for further delegation.

Subpart 5132.11 - Electronic Funds Transfer

5132.1106 EFT mechanisms.

The Assistant Secretary of the Army (Acquisition, Logistics and Technology) shall make the

determination as described in FAR 32.1106 (a) and (b). See Appendix GG for further delegation.

Subpart 5132.71 - Levies on Contract Payments

5132.7101 Policy and procedures.

(b)(4) Subject to DFARS 232.7101(b) and the procedures at the DFARS PGI 232.7101(b), the

contracting officer shall ensure the senior contracting official (SCO) endorses the notification

memorandum sent to the Director, Defense Procurement and Acquisition Policy (DPAP). The SCO

may not delegate this endorsement to a lower level. In addition to the assessment the contractor

provides, the contracting officer shall obtain from the appropriate requiring activity any other

information necessary to prepare the notification. The contract file will clearly show all reviews and

coordination for the action at the SCO and lower levels, to include legal counsel review. When the

contracting officer sends the notification memorandum to the Director, DPAP, the contracting officer

shall provide a copy of this memorandum to the address at 5101.290(b)(2)(ii)(A).

(c) When the contracting officer receives a response from DPAP, the contracting officer shall send a

copy of the response to the address at 5101.290(b)(2)(ii)(A).