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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.2

FAR 32.202-2 Types of payments for commercial product and commercial service purchases.

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 defines types of payments for commercial product and commercial service purchases, tying them to statutory commercial financing authority and the Prompt Payment Act. It explains that a commercial advance payment is made before any work is performed and cannot exceed 15 percent of the contract price. These advance payments are contract financing payments for prompt payment purposes and are not subject to the interest penalty provisions of the Prompt Payment Act or to subpart 32.4.

Applies to: Commercial product and commercial service purchases

What it requires

  • Ensure the aggregate of commercial advance payments does not exceed 15 percent of the contract price.

Key terms: commercial advance payment · commercial interim payment · delivery payment · contract financing payments · Prompt Payment Act

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

The text

These definitions incorporate the requirements of the statutory commercial financing authority and the implementation of the Prompt Payment Act.

Commercial advance payment, as used in this section, means a payment made before any performance of work under the contract. The aggregate of these payments shall not exceed 15 percent of the contract price. These payments are contract financing payments for prompt payment purposes (i.e., not subject to the interest penalty provisions of the Prompt Payment Act in accordance with subpart 32.9). These payments are not subject to subpart 32.4, Advance Payments for Other Than Commercial Acquisitions.

Commercial interim payment (See 32.001.)

Delivery payment (See 32.001).

Sections it refers to

Sections that refer to it

  • 32.202-3 Conducting market research about financing terms.
  • 52.232-31 Invitation To Propose Financing Terms.

← 32.202-1 Policy. · 32.202-3 Conducting market research about financing terms. →

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 32.202-2 Types of payments for commercial product and commercial service purchases · SpendQuery