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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.1

FAR 32.106 Order of preference.

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 tells the contracting officer which types of contract financing to consider first when a contractor asks for financing. The order runs from private financing without a Government guarantee, through customary contract financing and loan guarantees, to unusual financing and advance payments. It matters because it shows contractors that Government financing is generally a last resort, and that the contracting officer may make exceptions if it benefits the Government.

Applies to: Contracting officers considering a contractor's request for contract financing

What it requires

  • Consider the listed order of preference when a contractor requests contract financing, unless an exception would be in the Government's best interest in a specific case
  • Do not require the contractor to obtain private financing at unreasonable terms
  • Do not require the contractor to obtain private financing from other agencies

Key terms: contract financing · private financing without Government guarantee · customary contract financing · loan guarantees · advance payments

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

The text

The contracting officer must consider the following order of preference when a contractor requests contract financing, unless an exception would be in the Government's best interest in a specific case:

(a) Private financing without Government guarantee. It is not intended, however, that the contracting officer require the contractor to obtain private financing—

(1) At unreasonable terms; or

(2) From other agencies.

(b) Customary contract financing other than loan guarantees and certain advance payments (see 32.113).

(c) Loan guarantees.

(d) Unusual contract financing (see 32.114).

(e) Advance payments (see exceptions in 32.402(b)).

Sections it refers to

Sections that refer to it

← 32.105 Uses of contract financing. · 32.107 Need for contract financing not a deterrent. →

Rule changes for FAR Part 32

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

FAR 32.106 Order of preference · SpendQuery