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

DFARS 232.503-6 Suspension or reduction of payments.

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 addresses suspension or reduction of payments, including procedures for loss contracts. It tells the contracting officer how to calculate loss ratio adjustments required by FAR 32.503-6(f) and (g), and allows the contractor to prepare the supplementary analysis in certain cases. It also requires that adjustments not alter the contractor's original progress payment request, so an audit trail is preserved.

Applies to: Contracting officers and contractors involved in progress payments under loss contracts

What it requires

  • The contracting officer must prepare a supplementary analysis of the contractor's request for progress payments and calculate the loss ratio adjustment using FAR 32.503-6(g) procedures, except as provided in paragraph (g)(ii).
  • The contracting officer may request the contractor to prepare the supplementary analysis as an attachment to the progress payment request when the contracting officer determines the contractor's methods of estimating 'Costs to Complete' are reliable, accurate, and not susceptible to improper influen
  • Do not make loss ratio adjustments by altering or replacing data on the contractor's original request for progress payment (SF 1443 or computer generated equivalent).

Key terms: loss ratio adjustment · progress payments · Costs to Complete · SF 1443 · supplementary analysis

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

The text

(b) Contractor noncompliance. See also 242.7503.

(g) Loss contracts. Use the following loss ratio adjustment procedures for making adjustments required by FAR 32.503-6(f) and (g)—

(i) Except as provided in paragraph (g)(ii) of this subsection, the contracting officer must prepare a supplementary analysis of the contractor's request for progress payments and calculate the loss ratio adjustment using the procedures in FAR 32.503-6(g).

(ii) The contracting officer may request the contractor to prepare the supplementary analysis as an attachment to the progress payment request when the contracting officer determines that the contractor's methods of estimating the “Costs to Complete” are reliable, accurate, and not susceptible to improper influences.

(iii) To maintain an audit trail and permit verification of calculations, do not make the loss ratio adjustments by altering or replacing data on the contractor's original request for progress payment (SF 1443, Contractor's Request for Progress Payment, or computer generated equivalent).

Sections it refers to

← 232.503 Postaward matters. · 232.503-15 Application of Government title terms. →

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 232.503-6 Suspension or reduction of payments · SpendQuery