FAR 52.232-28 - Invitation to Propose Performance-Based Payments

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Contents

Prescribed in 32.1005(b)(1)

Effective Date:1 March 2000
Clause or Provision:Provision
Provision or Clause Number: 52.232-28 - Invitation to Propose Performance-Based Payments
Principle Type And/Or Purpose of Contract:
Required:
Applicable:Facilities; Architect-Engineering; Dismantling, Demolition or Removal of Improvements; Fixed Price, Supply; Fixed Price, Construction; Fixed Price, Service; Fixed Price, R&D; Indefinite Delivery; Transportation; Utility Services
Optional:Simplified Acquisition Procedures (Excludes Micro-Purchase); Leasing of Motor Vehicles; Time & Material/Labor Hour; Cost Reimbursement, Construction; Cost Reimbursement, Supply; Cost Reimbursement, Service
Subject:Invoices and Payments
ProcurementType:
Contract Threshold:
Prescription Overview:

Prescription

(b)(1) Insert the solicitation provision at 52.232-28, Invitation to Propose Performance-Based Payments, in negotiated solicitations that invite offerors to propose performance-based payments.

(2) Use the provision with its Alternate I in competitive negotiated solicitations if the Government intends to adjust proposed prices for proposal evaluation purposes (see 32.1004(e)).

Clause Overview:

Provision

(a) The Government invites the offeror to propose terms under which the Government will make performance-based contract financing payments during contract performance. The Government will consider performance-based payment financing terms proposed by the offeror in the evaluation of the offeror’s proposal. The Contracting Officer will incorporate the financing terms of the successful offeror and the FAR clause, Performance-Based Payments, at FAR 52.232-32, in any resulting contract.


(b) In the event of any conflict between the terms proposed by the offeror and the terms in the clause at FAR 52.232-32, Performance-Based Payments, the terms of the clause at FAR 52.232-32 shall govern.


(c) The Contracting Officer will not accept the offeror’s proposed performance-based payment financing if the financing does not conform to the following limitations:

  • (1) The Government will make delivery payments only for supplies delivered and accepted, or services rendered and accepted in accordance with the payment terms of this contract.
  • (2) The terms and conditions of the performance-based payments must—
    • (i) Comply with FAR 32.1004;
    • (ii) Be reasonable and consistent with all other technical and cost information included in the offeror’s proposal; and
    • (iii) Their total shall not exceed 90 percent of the contract price if on a whole contract basis, or 90 percent of the delivery item price if on a delivery item basis.
  • (3) The terms and conditions of the performance-based financing must be in the best interests of the Government.


(d) The offeror’s proposal of performance-based payment financing shall include the following:

  • (1) The proposed contractual language describing the performance-based payments (see FAR 32.1004 for appropriate criteria for establishing performance bases and performance-based finance payment amounts).
  • (2) A listing of—
    • (i) The projected performance-based payment dates and the projected payment amounts; and
    • (ii) The projected delivery date and the projected payment amount.
  • (3) Information addressing the Contractor’s investment in the contract.


(e) Evaluation of the offeror’s proposed prices and financing terms will include whether the offeror’s proposed performance-based payment events and payment amounts are reasonable and consistent with all other terms and conditions of the offeror’s proposal.

Alternate

Alternate I (Mar 2000)

As prescribed in FAR 32.1005(b)(2), add the following paragraph (f) to the basic provision:

(f) The Government will adjust each proposed price to reflect the cost of providing the proposed performance-based payments to determine the total cost to the Government of that particular combination of price and performance-based financing. The Government will make the adjustment using the procedure described in FAR 32.205(c).

Important Notes/Requirements:
Subcontract Threshold:
Incorporated by Reference:No
Uniform Contract Format:L
Editor:Marshall

Personal notes.

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