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FAR and DFARS › DFARS Part 232: Contract Financing › Subpart 232.5

DFARS 232.501-3 Contract price.

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 section allows the contracting officer to approve progress payments even when the contract price is higher than the funds currently obligated. However, the contract must cap the Government's liability at either the applicable progress payment rate or 100 percent of obligated funds, whichever is less.

Applies to: Contracting officers approving progress payments on contracts where the contract price exceeds obligated funds

What it requires

  • Ensure the contract limits the Government's liability to the lesser of the applicable rate or 100 percent of the funds obligated

Key terms: progress payments · contract price · funds obligated · applicable rate · liquidation rate

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

The text

(b) The contracting officer may approve progress payments when the contract price exceeds the funds obligated under the contract, provided the contract limits the Government's liability to the lesser of—

(i) The applicable rate (i.e., the lower of the progress payment rate, the liquidation rate, or the loss-ratio adjusted rate); or

(ii) 100 percent of the funds obligated.

← 232.501-2 Unusual progress payments. · 232.502 Preaward matters. →

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 232.501-3 Contract price · SpendQuery