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FAR and DFARS › DFARS Part 232: Contract Financing › Subpart 232.2

DFARS 232.206 Solicitation provisions and contract clauses.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This DFARS section tells contracting officers how to handle prompt payment terms and installment payment financing for commercial product and commercial service contracts. It sets entitlement timing for commercial advance and interim payments, and generally prohibits installment payment financing for DoD contracts unless market research shows it is appropriate and customary. For contractors, this affects when they can expect payment on commercial contracts and whether installment financing is available.

Applies to: DoD contracting officers and contractors on commercial product and commercial service contracts

What it requires

  • The contracting officer shall incorporate the standard prompt payment terms for commercial advance payments and commercial interim payments.
  • Installment payment financing shall not be used for DoD contracts unless market research has established it is both appropriate and customary in the commercial marketplace.
  • When installment payment financing is used, the contracting officer shall use the ceiling percentage of contract price customary in the particular marketplace, not to exceed the maximum rate in FAR 52.232-30.

Key terms: commercial advance payments · commercial interim payments · commercial delivery payments · installment payment financing · market research

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

(f) Prompt payment for commercial purchase payments. The contracting officer shall incorporate the following standard prompt payment terms for commercial product and commercial service contract financing:

(i) Commercial advance payments: The contractor entitlement date specified in the contract, or 30 days after receipt by the designated billing office of a proper request for payment, whichever is later.

(ii) Commercial interim payments: The contractor entitlement date specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later. The prompt payment standards for commercial delivery payments shall be the same as specified in FAR Subpart 32.9 for invoice payments for the item delivered.

(g) Installment payment financing for commercial products and commercial services. Installment payment financing shall not be used for DoD contracts, unless market research has established that this form of contract financing is both appropriate and customary in the commercial marketplace. When installment payment financing is used, the contracting officer shall use the ceiling percentage of contract price that is customary in the particular marketplace (not to exceed the maximum rate established in FAR 52.232-30).

Sections it refers to

  • 52.232-30 Installment Payments for Commercial Products and Commercial Services.

← 232.202-4 Security for Government financing. · 232.302 Authority. →

Rule changes for DFARS Part 232

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

DFARS 232.206 Solicitation provisions and contract clauses · SpendQuery