FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.5
FAR 32.501-5 Other protective terms.
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 add extra protective terms to a contract when needed to protect the Government's interest, on top of the standard Progress Payments clause. It lists examples of such terms, including guarantees, subordinations, special bank accounts, protective covenants, and limits on progress payments for first article work. It matters because a contractor may face these additional requirements if the contracting officer decides they are necessary.
Applies to: Contracts with progress payments where the contracting officer determines protective terms are needed
Key terms: Progress Payments clause · Personal or corporate guarantees · Subordinations or standbys of indebtedness · Special bank accounts · First article testing
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
If the contracting officer considers it necessary for protection of the Government's interest, protective terms such as the following may be used in addition to the Progress Payments clause of the contract:
(a) Personal or corporate guarantees.
(b) Subordinations or standbys of indebtedness.
(c) Special bank accounts.
(d) Protective covenants of the kinds in paragraph (p) of the clause at 52.232-12, Advance Payments.
(e) A provision, included in the solicitation and resultant contract when first article testing is required (see subpart 9.3), limiting progress payments on first article work by a stated amount or percentage.
Sections it refers to
- 52.232-12 Advance Payments.
← 32.501-4 [Reserved] · 32.502 Preaward matters. →
Rule changes for FAR Part 32
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · final rule 2025-08-27 · effective 2025-10-01
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2025-08-07 · effective 2025-08-07
- Federal Acquisition Regulation: Inflation Adjustment of Acquisition-Related Thresholds ↗ · proposed 2024-11-29 · comments due 2025-01-28
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.