AFFARS Part 5332

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PART 5332-CONTRACT FINANCING
TABLE OF CONTENTS

SUBPART 5332.1-NON-COMMERCIAL ITEM PURCHASE FINANCING 32-1

SUBPART 5332.3-LOAN GUARANTEES FOR DEFENSE PRODUCTION 32-1

SUBPART 5332.4-ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS 32-1

SUBPART 5332.5-PROGRESS PAYMENTS BASED ON COSTS 32-4

SUBPART 5332.6-CONTRACT DEBTS 32-4

SUBPART 5332.7-CONTRACT FUNDING 32-5

Undisplayed GraphicSUBPART 5332.9-PROMPT PAYMENT 32-6

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PART 5332-CONTRACT FINANCING

SUBPART 5332.1-NON-COMMERCIAL ITEM PURCHASE FINANCING

The contracting officer shall promptly report known adverse developments through contracting channels to the MAJCOM. If the adverse development involves a contractor or subcontractor having a bank loan guaranteed by the Air Force, progress payments, or an advance payment, the MAJCOM shall report the adverse development, its expected impact upon continued satisfactory performance under the contract, remedial actions taken to date, and any recommendations for further action to SAF/AQCP.

If an exceptional case arises, the contracting officer shall submit the fully documented file through contracting channels to the MAJCOM. If the MAJCOM determines that approval is required by higher authority, submit a memorandum outlining the pertinent facts together with a recommendation on the action to be taken to SAF/AQCP no later than 30 days before the needed effective date of the proposed financing arrangement.

SUBPART 5332.3-LOAN GUARANTEES FOR DEFENSE PRODUCTION

Upon receipt of an application and supporting data for a guaranteed loan from the Federal Reserve Bank, the MAJCOM shall request the cognizant DCMC to analyze the contractor's financial condition. The request should include, as a minimum, an examination of the contractor's balance sheet and operating statement. The MAJCOM should request the DCMC to give special attention to the classification and evaluation of accounts to ensure that they are in accordance with generally accepted accounting principles with emphasis on accounts receivable, inventories, and deferred charges. The DCMC should be requested to furnish the supporting data on a priority basis, normally within five work days.

The Assistant for Accounting and Banking, Office of the Assistant Secretary of the Air Force (Financial Management and Comptroller), SAF/FMPB, or the Contract Finance Offices of the Department of the Army, Navy, or Defense Logistics Agency may request certificates of eligibility covering Air Force contracts. Submit requests for certificates to SAF/AQCP. SAF/AQCP shall evaluate all supporting data and furnish appropriate comments to the requester of the certificate.

SUBPART 5332.4-ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

(a) The contracting officer shall submit each advance payment request involving only a single contract and each request for a pool agreement not covered by (b) below to the MAJCOM Director of Contracting who shall forward the request to SAF/AQCP with a recommendation. SAF/FMPB is the approval authority for advance payment requests for single contracts.
(b) The contracting officer shall forward requests from educational and non-profit organizations for advance payment pool agreements to the Director of Contracts, Air Force Office of Scientific Research (AFOSR/PK), Bolling AFB, Washington, DC 20332.

(a) The requirements for approval of an advance payment pool agreement are the same as for a single contract.
(b) A single disbursing office shall have disbursing responsibility for all Air Force contracts in the advance payment pool.
(c) New contracts awarded to institutions which have an advance payment pool agreement shall also be included in the existing agreement.
(d) Prior clearances shall be obtained from AFOSR/PK before including contracts in an advance payment pool agreement. Requests for clearance shall identify originating office, name of institution, contracting officer, adjustment of funding by supplemental agreement/amendment, incremental funding, duration and end-date of contract, type of services/supplies to be delivered, type of contract, contract number, and the accounting and finance office shown in the advance payment pool agreement.

(a) Educational and research institutions desiring an advance payment pool agreement shall submit their request to the contracting officer. The documentation supplied by the institution to justify an advance payment pool agreement shall include the following:

(b) The contracting officer shall review the institution's request and supporting documentation and, within seven days from receipt, forward the request to AFOSR/PK.
(c) Within 15 days after receipt of the request, AFOSR/PK shall complete its review of the justification for completeness and compliance with the FAR. When satisfied that the requirements have been met, AFOSR/PK shall forward the request and other related documentation to SAF/AQCP. SAF/AQCP will forward the request to SAF/FMPB.
(d) The administering office, disbursing office, and approving office designated in the advance payment pool agreement shall perform the following responsibilities:

(e) SAF/FMPB shall evaluate the request within 30 days of receipt to determine if the advance payment pool agreement is justified. Assistance may be solicited from other sources such as contracting officers, auditors, disbursing officers, and, if necessary, field visits to the institution. SAF/FMPB is responsible for:

(f) SAF/FMPB shall approve and forward the findings, determinations, and authorizations for advance payments and the advance payment pool agreement to AFOSR/PK.
(g) Upon receipt of the signed D&F, AFOSR/PK shall take necessary actions to award the advance payment pool agreement and incorporate it into affected contracts. AFOSR/PK shall ensure that the clause at DFARS 252.232-7000, Advance Payment Pool, is included in each contract covered by the agreement.
(h) The contracting officer shall amend affected contracts, as appropriate, in order to incorporate the advance payment pool agreement.

SAF/FMPB shall establish internal procedures for the accounting and internal control over advance payments made to institutions by the Air Force accounting and finance offices which perform duties of a disbursing office. SAF/FMPB shall reevaluate advance payment pool limitations and recommend adjustments, when necessary, using the procedures in 5332.470-91.

SUBPART 5332.5-PROGRESS PAYMENTS BASED ON COSTS

Except for AFMC, the contracting officer shall submit contractor requests for unusual progress payments to the MAJCOM. The MAJCOM Deputy Chief of Staff/Contracting shall recommend to SAF/AQ whether the request for unusual progress payments should be approved. All requests for unusual progress payments, whether recommended for approval or disapproval, shall be promptly forwarded to SAF/FMPB through SAF/AQCP together with all pertinent data supporting the recommended action. AFMC requests and recommendations will be submitted through SAF/AQCP to SAF/FMPB in accordance with AFMC procedures.

The procedures in 5332.501-2 apply to FAR 32.502-2 (a) and (b). When seeking approval to provide progress payments to contractors of the type described in FAR 32.502-2 (c), the contracting officer shall submit the necessary information directly to SAF/FMPB.

SUBPART 5332.6-CONTRACT DEBTS

(a) Demands for payment of contract debts resulting from default termination shall require the debtor to make payment by: (1) check made payable to "Defense Finance and Accounting Service" and forwarded to Defense Finance and Accounting Service, DFAS-CO-FDP, P.O. Box 93031, Chicago, IL 60673-3031; or (2) Electronic Funds Transfer to First Chicago National Bank, for credit to Account Number 1165186 in the name of the Defense Finance and Accounting Service, P.O. Box 93031, Chicago, IL 60673-3031.
(b) When the contracting officer issues a demand for payment against a contract for which the payment office and cognizant accounting and finance office are different, the contracting officer shall provide a copy of the demand to both offices. Whenever a contracting officer renders a final decision that results in a contractor being contractually indebted to the Government, the contracting officer shall simultaneously issue a demand letter to the contractor (see FAR 32.610 (b)), with a copy to the appropriate finance office. The demand letter must be concurrently issued in all such cases, irrespective of any action taken or planned by the contractor to appeal the contracting officer's decision.

For all but AFMC, the recipient office shall forward requests for deferment of contract debts to the Director of Contracting at the MAJCOM headquarters who shall submit, on a priority basis, an evaluation of the contractor's proposal with the necessary reporting information and recommendation through command channels to the Air Force Contract Finance Office, SAF/FMPB. AFMC actions will be submitted to SAF/FMPB in accordance with AFMC procedures.

Undisplayed GraphicAscertaining and collecting delinquent contract debts is the responsibility of DFAS-CO-FDP. Debt cases shall be transferred to that office for collection as prescribed in FAR Subpart 32.6.

SUBPART 5332.7-CONTRACT FUNDING

(a) Base contracting activities shall not issue a solicitation for supplies or services without an allotment citation of funds availability unless the purchase request is for:

"I certify that all purchase requests for [insert stock fund item names] stock fund items for fiscal year [insert fiscal year] are provided for in the approved [insert name] operating program for fiscal year [insert fiscal year]. The proper accounting classification to be cited for the entire fiscal year is [insert classification]."

(b) When a purchase request is for one of the requirements listed in (b)(1) through (4), the base contracting activity may issue a solicitation, receive and open offers, and prepare final award documents (including clearance, if required). How- ever, the contract shall not be signed by the contracting officer; delivered to the contractor; nor will the contractor be notified that it has been awarded a contract until funds have been certified by the accountable AFO. Since contract award will not be made subject to the availability of funds, the procedure and clause prescribed in FAR 32.703-2 (a) shall not be used. If additive or deductive items are included in the bid schedule, the contracting officer shall determine the amount of available funds before bid opening:

(c) The MAJCOM Civil Engineer, Director of Contracting, and Comptroller may jointly agree in writing to authorize base contracting activities to issue solicitations for facility project requirements when it is anticipated that the contract will be awarded in the current fiscal year but funds are not yet available. Use of this authority is subject to the following:

Undisplayed Graphic"Notice to Offerors: Funds are not presently available for this project. No award will be made under this solicitation until funds are available. The Government reserves the right to cancel this solicitation, either before or after the closing date."

SUBPART 5332.9-PROMPT PAYMENT

The Director of Defense Procurement has approved a class deviation to FAR 32.903 for contracts awarded under Air Mobility Command's Civilian Reserve Air Fleet (CRAF) program. This deviation permits payment earlier than seven days prior to the payment due date specified in the Prompt Payment clause, FAR 52.232-25. No change to the Prompt Payment clause is authorized by this deviation. The deviation, No. 98-F-0001 dated 25 Sep 98, is on file in SAF/AQCP.

Undisplayed GraphicThe contracting officer shall insert the clause at 5352.232-9000, Remittance Address, whenever the following clauses are used: FAR 52.232-25, Prompt Payment, FAR 52.232-26, Prompt Payment for Fixed-Price Architect-Engineer Contracts, and FAR 52.232-27, Prompt Payment for Construction Contracts. Each of these prompt payment clauses requires that the contractor's invoice include the name and address of the contractor official to whom payment is to be sent.

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