FAR 32.503-5 Administration of progress payments.

In plain English

This section explains how the administrative contracting officer (ACO) oversees progress payments after they are made. Even though the ACO may approve payment requests based on the contractor's accounting system and certification without a prepayment review, periodic postpayment reviews or audits must be conducted to confirm that the payments were valid and that future payments will be proper. The reviews must at least check whether unliquidated progress payments are supported by work accomplished, whether payment limits are exceeded, whether the remaining contract price or contractor resources can cover completion, and whether the contractor's accounting system is reliable.

Applies to: Government contractors receiving progress payments under cost-reimbursement or similar contracts, and the administrative contracting officers who oversee those payments.

What it requires

• The ACO must make postpayment reviews (including audits when necessary) periodically or when considered desirable.
• The postpayment reviews or audits must at a minimum determine whether unliquidated progress payments are fairly supported by the value of work accomplished on the undelivered portion of the contract.
• The reviews must determine whether the applicable limitation on progress payments in the Progress Payments clause has been exceeded.
• The reviews must determine whether the unpaid balance of the contract price will be adequate to cover the anticipated cost of completion, or whether the contractor has adequate resources to complete the contract, and whether there is reason to doubt the adequacy and reliability of the contractor's a

Key terms: progress payments · ACO · postpayment reviews · unliquidated progress payments · Progress Payments clause

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