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elsmiles

FAR 52.232-25 Alt 1 Payment Days Authority

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I have a CPFF DOD contract in which FAR Clause 52.232-25 Alt 1 is present.  The clause currently states 14 days for interim payments to the non-profit large contractor.  The contractor is asking for payment within 10 days due to the high output of the contract and we have granted them approval to invoice every week.  Payment within 10 days has been the precedence for many years on this contract, however, within the past 5 years, regulations and restrictions have become stricter and it would appear that now I have to gain approval through DPAP to adjust the days from payment in 14 days to payment in 10 days.  The minor change in days seems rather non-value added to have it approved at such a high level and I could not find any exceptions that could keep it within the DOD branch.  By the way, the payment agencies are on board and willing to support whatever payment schedule we come up with.

Here is my level of thinking:

FAR 52.232-25 Alt. 1(e)(2) states payment will be made within 30 days.  

DFAR 232.906 Making Payments, allows for 14 day interim payments when using the Alt.1, so we are currently using the 14 days.

Beyond these two regulations, I was unable to find anything else that could assist me in adjusting the payments days to 10 days or any authority that would support the change, beyond having to go through all the way up to the higher levels and submitting the change as a deviation. 

Any guidance or advise would be greatly appreciated.   Thank you!

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elsmiles,

Are you a Government contracting officer?  Government program manager?

Why do you want to commit the rest of the federal Government to give money to your contract faster than the standard clauses allow?  Has the contractor made a promise of significant consideration for the proposed change?

I recommend you leave well enough alone.  You already agreed to weekly invoices.

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Thank you, ji20874, for the input.  The nature of the contract requires the contractor to output at a high rate which in turn results in funds spent faster than your typical common contract.  The contractor does not have additional funds that a for-profit has to be able to sustain at such a high rate without additional resources.  The demand is the government's and not the contractor, so to alleviate the high demand and support the high output, the government pays faster.  The question was not whether or not the government should pay faster or not, the question was are there any other authorities that can be used to further decrease the payment days.       

    

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I'm not aware of a short-cut.  Shay Assad (DPAP) is a reasonable person and he can give you an approval or disapproval in a six-minute conversation, but it might take six months (or more) for your package to work its way to his desk.  Best wishes -- maybe another poster will be able to help.

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6 hours ago, elsmiles said:

non-profit large contractor.

 

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I am not a contracting officer so I may not have a good enough handle on the situation. However,  would appreciate your help in understanding the basis for contractual language that established 14 days and/or 10 days for payment. I didn't see that in 52.232-25 and/or ALT 1. Also, 32.908 (c)(2) is as follows: "As provided in 32.903, agency policies and procedures may authorize amendment of paragraphs (a)(1)(i) and (ii) of the clause to insert a period shorter than 30 days (but not less than 7 days) for making contract invoice payments." Your comments?  

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7 hours ago, elsmiles said:

Thank you, ji20874, for the input.  The nature of the contract requires the contractor to output at a high rate which in turn results in funds spent faster than your typical common contract.  The contractor does not have additional funds that a for-profit has to be able to sustain at such a high rate without additional resources.  The demand is the government's and not the contractor, so to alleviate the high demand and support the high output, the government pays faster.  The question was not whether or not the government should pay faster or not, the question was are there any other authorities that can be used to further decrease the payment days.       

    

Have you considered an advance payment pool? See DFARS 232.470(a).

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On 10/16/2018 at 4:55 PM, Neil Roberts said:

I am not a contracting officer so I may not have a good enough handle on the situation. However,  would appreciate your help in understanding the basis for contractual language that established 14 days and/or 10 days for payment. I didn't see that in 52.232-25 and/or ALT 1. Also, 32.908 (c)(2) is as follows: "As provided in 32.903, agency policies and procedures may authorize amendment of paragraphs (a)(1)(i) and (ii) of the clause to insert a period shorter than 30 days (but not less than 7 days) for making contract invoice payments." Your comments?  

Looked up that clause, but our agency still requires higher level approvals. I was hoping to find something to keep the approvals at the lowest level if possible. Thank you for your input. 

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On 10/16/2018 at 5:54 PM, Don Mansfield said:

Have you considered an advance payment pool? See DFARS 232.470(a).

Great alternative and thank you for the option, but this agency is not financing friendly, so advance payments would not be well received. 

Based on everyone's response it looks like I will be sending this up the chain to DPAP.  Thank you, everyone, for your input. 

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