FAC Number: 2022-08
Effective Date: 10/28/2022

32.503-5 Administration of progress payments.

      (a) While the ACO may, in approving progress payment requests under 32.503-3 of this section, rely on the contractor’s accounting system and certification without prepayment review, postpayment reviews (including audits when considered necessary) shall be made periodically, or when considered desirable by the ACO to determine the validity of progress payments already made and expected to be made.

      (b) These postpayment reviews or audits shall, as a minimum, include a determination of whether or not-

           (1) The unliquidated progress payments are fairly supported by the value of the work accomplished on the undelivered portion of the contract;

           (2) The applicable limitation on progress payments in the Progress Payments clause has been exceeded;


(i) The unpaid balance of the contract price will be adequate to cover the anticipated cost of completion; or

                (ii) The contractor has adequate resources to complete the contract; and

           (4) There is reason to doubt the adequacy and reliability of the contractor’s accounting system and controls and certification.

      (c) Under indefinite-delivery contracts, the contracting officer should administer progress payments made under each individual order as if the order constituted a separate contract, unless agency procedures provide otherwise. When the contract will be administered by an agency other than the awarding agency, the contracting officer shall coordinate with the contract administration office if the awarding agency wants the administration of progress payments to be on a basis other than order-by-order.

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