[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR32.1010]

[Page 683]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 32--CONTRACT FINANCING--Table of Contents
 
                Subpart 32.10--Performance-Based Payments
 
Sec. 32.1010  Risk of loss.

    (a) Under the clause at 52.232-32, Performance-Based Payments, and 
except for normal spoilage, the contractor bears the risk for loss, 
theft, destruction, or damage to property affected by the clause, even 
though title is vested in the Government, unless the Government has 
expressly assumed this risk. The clauses prescribed in this regulation 
related to performance-based payments, default, and terminations do not 
constitute a Government assumption of risk.
    (b) If a loss occurs in connection with property for which the 
contractor bears the risk, and the property is needed for performance, 
the contractor is obligated to repay the Government the performance-
based payments related to the property.
    (c) The contractor is not obligated to pay for the loss of property 
for which the Government has assumed the risk of loss. However, a 
serious loss may impede the satisfactory progress of contract 
performance, so that the contracting officer may need to act under 
paragraph (e)(2) of the Performance-Based Payments clause. In addition, 
while the contractor is not required to repay previous performance-based 
payments in the event of a loss for which the Government has assumed the 
risk, such a loss may prevent the contractor from making the 
certification required by the Performance-Based Payments clause.