32.501-2 Unusual progress payments.
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(a) The contracting officer may provide unusual progress payments only if-
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(1) The contract necessitates predelivery expenditures that are large in relation to contract price and in relation to the contractor’s working capital and credit;
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(2) The contractor fully documents an actual need to supplement any private financing available, including guaranteed loans; and
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(3) The contractor’s request is approved by the head of the contracting activity or a designee. In addition, see 32.502-2.
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(b) The excess of the unusual progress payment rate approved over the customary progress payment rate should be the lowest amount possible under the circumstances.
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(c) Progress payments will not be considered unusual merely because they are on letter contracts or the definitive contracts that supersede letter contracts.