Policies & Regulations - VA Acquisition Regulation (VAAR)

SUBCHAPTER E—GENERAL CONTRACTING REQUIREMENTS
PART 832—CONTRACT FINANCING

Subpart 832.1—Non-Commercial Item Purchase Financing

Subpart 832.2—Commercial Item Purchase Financing

Subpart 832.4—Advance Payments for Non-Commercial Items

Subpart 832.5—Progress Payments Based on Costs

Subpart 832.8—Assignment of Claims

Subpart 832.9—Prompt Payment

Subpart 832.11—Electronic Funds Transfer

AUTHORITY:  40 U.S.C. 121(c) and 48 CFR 1.301-1.304.

832.006  Reduction or suspension of contract payments upon finding of fraud.

832.006-1  General.

The SPE is authorized to make determinations that there is substantial evidence that contractors’ requests for advance, partial, or progress payments are based on fraud and may direct that further payments to the contractors be reduced or suspended, as provided in FAR 32.006.  This authority may not be redelegated.

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832.006-2  Definitions.

The remedy coordination official for VA is the DSPE.

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832.006-3  Responsibilities.

VA personnel must report suspected fraud related to advance, partial, or progress payments to the DSPE and VA Office of the Inspector General.  The report must include all available information supporting the suspicion.

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832.006-4  Procedures.

(a) Any recommendation from a VA employee through the DSPE to the SPE to reduce or suspend payment to a contractor under FAR 32.006 must address the considerations in FAR 32.006-4(d).

(b) The DSPE shall carry out the responsibilities of the Secretary or designee in FAR 32.006-4(e) to notify the contractor of proposed action under FAR 32.006.  The notice of proposed action will be sent to the last known address of the contractor, the contractor’s counsel, or agent for service of process, by certified mail, return receipt requested, or any other method that provides signed evidence of receipt.  In the case of a business, the notice of proposed action may be sent to any partner, principal, officer, director, owner or co-owner, or joint venture.  The contractor will be afforded an opportunity to appear before the DSPE to present information or argument in person or through a representative.  The contractor may supplement the oral presentation with written information and argument.  The proceedings will be conducted in an informal manner and without the requirement for a transcript.  If the DSPE does not receive a reply from the contractor within 30 calendar days, the DSPE will base his or her recommendations on the information available.  Any recommendation of the DSPE under paragraph (a) of this section must address the results of this notification and the information, if any, provided by the contractor.

(c) The SPE must provide a copy of each final determination and the supporting documentation to the contractor, the DSPE and the contracting officer.  The contracting officer will place a copy of the determination and the supporting documentation in the contract file.

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Subpart 832.1 - Non-Commercial Item Purchase Financing

832.111  Contract clauses for non-commercial purchases.

In solicitations and contracts for construction that include the FAR clause at 52.232-5, Payments under Fixed-Price Construction Contracts, the contracting officer shall insert the following clauses:

(a) If the solicitation or contract does not contain a section entitled “Network Analysis System (NAS),” the contracting officer must insert the clause at 852.236-82, Payments under fixed-price construction contracts (without NAS).  When the solicitation or contract includes guarantee period services, the contracting officer must use the clause with its Alternate I.

(b) If the solicitation or contract contains a section entitled “Network Analysis System (NAS),” the contracting officer must insert the clause at 852.236-83, Payments under fixed-price construction contracts (including NAS).  When the solicitation or contract includes guarantee period services, the contracting officer must use the clause with its Alternate I.

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Subpart 832.2 - Commercial Item Purchase Financing

832.201  Statutory authority.

The contracting officer may make the determination that terms and conditions for payment for commercial items are appropriate and customary in the commercial marketplace and are in the best interest of the Government, provided the terms and conditions for payment do not conflict with FAR Subpart 32.2.

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832.202  General.

832.202-1  Policy.

As provided in FAR 32.202-1(d), contracting officers must obtain the approval of the DSPE before awarding a contract that includes unusual contract financing.  The contracting officer must fully support the request with the reasons why the proposed unusual contract financing is in the best interest of the Government.  In addition, contracting officers must not use commercial interim payment or commercial advance payment terms in solicitations or contracts without the approval of the DSPE.

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832.202-4  Security for Government financing.

An offeror’s financial condition may be considered adequate security to protect the Government’s interest when the Government provides contract financing.  In assessing the offeror’s financial condition, the contracting officer may obtain, to the extent required, the following information to establish the offeror’s financial capability and to determine the offeror’s financial condition:

(a) A current year interim balance sheet and income statement and balance sheets and income statements for the two preceding fiscal years.  The statements should be prepared in accordance with generally accepted accounting principles and must be audited and certified by an independent public accountant or an appropriate officer of the firm.

(b) A cash flow forecast for the remainder of the contract term showing the planned origin and use of cash within the firm or branch performing the contract.

(c) Information on financing arrangements disclosing the availability of cash to finance contract performance, the contractor’s exposure to financial crisis, and credit arrangements.

(d) A statement of the status of all State, local, and Federal tax accounts, including any special mandatory contributions.

(e) A description and explanation of the financial effects of any leases, deferred purchase arrangements, patent or royalty arrangements, insurance, planned capital expenditures, pending claims, contingent liabilities, and other financial aspects of the business.

(f) Any other financial information deemed necessary.

(g) A Dun and Bradstreet Report on the company.

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Subpart 832.4 - Advance Payments for Non-Commercial Items

832.402  General.

Authority to make the determination required by FAR 32.402(c)(1)(iii) and to approve contract terms, as provided by FAR 32.402(e)(1), is delegated to the SPE and is further delegated to the DSPE.  Before award, contracting officers must submit a request for approval to use advance payment to the DSPE.  The request must include the information required by FAR 32.409-1 and must address the standards for advance payment in FAR 32.402(c)(2).

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