MP5332 Contract Financing

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Mandatory Procedures

MP5332
Contract Financing

[Revised November 7, 2012]

MP5332.1 Non-Commercial Item Purchase Financing

(1) Since unusual contract financing arrangements may significantly impact the pricing of a contract, the contracting officer must submit any unusual financing requests by a contractor to the MAJCOM/DRU or AFISRA Contracting Staff for consultation.

(2) If the MAJCOM/DRU or AFISRA SCO determines unusual financing is required, it must submit a memorandum outlining the pertinent facts together with a recommendation on the action to be taken through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB no later than 30 days before the needed effective date of the proposed financing arrangement.

(3) Since the financial health of a firm significantly impacts the ability of the contractor to perform, the contracting officer must promptly report known adverse developments affecting a contractor or subcontractor to the contract administration office, other interested Government parties, and their MAJCOM/DRU or AFISRA SCO.

(4) If there is an adverse development affecting a contractor receiving a bank loan guaranteed by the Air Force, progress payments, or advance payments, the contracting office must report the adverse development, its expected impact upon continued satisfactory performance under the contract, remedial actions taken to date (if any), and any recommendations for further action through the MAJCOM/DRU or AFISRA SCO to SAF/AQC, safaqc.workflow@pentagon.af.mil.

MP5332.2 Commercial Item Purchase Financing

(1) The contracting officer must submit all commercial interim payment requests and commercial advance payment requests to the MAJCOM/DRU or AFISRA SCO. These requests, in turn, must be forwarded through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB for review and approval.

MP5332.4 Advance Payments

(1) Except for educational and non-profit organizations, the contracting officer must submit each advance payment request involving only a single contract to the MAJCOM/DRU or AFISRA SCO. This request, in turn, must be forwarded through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB for review and approval.

(2) For educational and non-profit organizations, the contracting office must forward the advance payment request to the Director of Contracts, Air Force Office of Scientific Research (AFOSR/PK), 801 North Randolph Street, Room 732, Arlington, VA 22203-1977.

(a) AFOSR/PK is the office responsible for the administration of contracts and grants issued by the Air Force Office of Scientific Research, which sponsors and supports basic research by educational and research institutions. Thus, all requests for advance payments requested by educational and research institutions are processed by AFOSR/PK.

(b) If possible, a single disbursing office must disburse funds for all Air Force contracts in an advance payment pool.

(c) New contracts awarded to educational and research institutions having an advance payment pool agreement must also be included in the existing pool agreement.

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

(A) Contract number;
(B) Contract price;
(C) Period of performance;
(D) Government buying office;
(E) Designated Government contract administration office; and
(F) Designated Government payment office;

(A) Column A - Contract Number;
(B) Column B - Contract Expense Incurred To Date;
(C) Column C - Estimated Contract Expense To Be Incurred;

(e) The contracting officer must review the institution’s request and supporting documentation and forward the request to AFOSR/PK. AFOSR/PK reviews the justification for completeness and compliance with the FAR. When satisfied that the requirements have been met, AFOSR/PK forwards the request and other related documentation through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB. The following is a list of actions that may be performed by the Contract Administration Office or the Air Force Accounting and Finance Office:

(f) The Air Force accounting and finance office is responsible for the disbursing functions of the advance payment pool agreement. Specific duties include --

(g) SAF/FMPB will evaluate the request 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. When approved, SAF/FMPB findings, determinations, and authorizations for advance payments and the advance payment pool agreement are forwarded to AFOSR/PK. Upon receipt of the signed D&F, AFOSR/PK takes necessary actions to award the advance payment pool agreement and incorporate it into affected contracts. AFOSR/PK will 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 must amend affected contracts, as appropriate, in order to incorporate the advance payment pool agreement.

MP5332.501-2 Unusual Progress Payments

(1) The contracting officer must submit contractor requests for unusual progress payments to the MAJCOM/DRU or AFISRA SCO.

(2) The MAJCOM/DRU or AFISRA SCO recommends to SAF/AQC whether the request for unusual progress payments should be approved. All requests for unusual progress payments, whether recommended for approval or disapproval, must be promptly forwarded through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB with all pertinent data supporting the recommended action.

(3) When estimated increases totaling $20 million or more have been made under a contract, the contracting officer must notify SAF/FMPB.

(4) In obtaining approval by SAF/FMPB of unusual progress payments, follow the procedures for obtaining approval of advance payment pool for educational and research institutions.

(5) When seeking approval to provide progress payments to contractors of the type described in FAR 32.502-2 (c), the contracting officer must submit the necessary information directly to SAF/FMPB.

MP5332.6 Contract Debts

(1) Contracting officers must retain a copy of all contract debt documentation in the contract file and must keep the contract file open until the debt is collected and/or written-off.

(2) Payment information for the demand for payment letter:

(3) When a request for deferment of a contract debt is received from a contractor, the recipient office must forward the request for deferment to the Chief of Contracting at the MAJCOM/DRU or AFISRA SCO. The MAJCOMDRU or AFISRA SCO must submit, on a priority basis, an evaluation of the contractor’s request with the necessary reporting information and recommendation through SAF/AQC, safaqc.workflow@pentagon.af.mil, to SAF/FMPB.

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