FAR 32.110 — Payment of subcontractors under cost-reimbursement prime contracts
Regulatory text. Not legal advice.
If the contractor makes financing payments to a subcontractor under a cost-reimbursement prime contract, the contracting officer should accept the financing payments as reimbursable costs of the prime contract only under the following conditions:
(a)
(a) The payments are made under the criteria in FAR Subpart 32.5 for customary progress payments based on costs, FAR 32.202-1 for commercial product or commercial service purchase financing, or FAR 32.1003 for performance-based payments, as applicable.
(b)
(b) If customary progress payments are made, the payments do not exceed the progress payment rate in FAR 32.501-1, unless unusual progress payments to the subcontractor have been approved in accordance with FAR 32.501-2.
(c)
(c) If customary progress payments are made, the subcontractor complies with the liquidation principles of FAR 32.503-8, FAR 32.503-9, and FAR 32.503-10.
(d)
(d) If performance-based payments are made, the subcontractor complies with the liquidation principles of FAR 32.1004(d).
(e)
(e) The subcontract contains financing payments terms as prescribed in this part.
Citation history: [65 FR 16279, Mar. 27, 2000, as amended at 86 FR 61029, Nov. 4, 2021]
Source: eCFR • Pulled 2026-04-16