[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: 48CFR32.503-12]

[Page 658]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 32--CONTRACT FINANCING--Table of Contents
 
             Subpart 32.5--Progress Payments Based on Costs
 
Sec. 32.503-12  Maximum unliquidated amount.

    (a) The contracting officer shall ensure that any excess of the 
unliquidated progress payments over the contractual limitation in 
paragraph (a) of the Progress Payments clause in the contract is 
promptly corrected through one or more of the following actions:
    (1) Increasing the liquidation rate.
    (2) Reducing the progress payment rate.
    (3) Suspending progress payments.
    (b) The excess described in paragraph (a) above is most likely to 
arise under the following circumstances:
    (1) The costs of performance exceed the contract price.
    (2) The alternate method of liquidation (see 32.503-9) is used and 
the actual costs of performance exceed the cost estimates used to 
establish the liquidation rate.
    (3) The rate of progress or the quality of contract performance is 
unsatisfactory.
    (4) The rate of rejections, waste, or spoilage is excessive.
    (c) As required, the services of the responsible audit agency or 
office should be fully utilized, along with the services of qualified 
cost analysis and engineering personnel.

[48 FR 42328, Sept. 19, 1983, as amended at 63 FR 9061, Feb. 23, 1998]