# DLAD PART 32 – CONTRACT FINANCING

- 32.004 Contract performance in foreign countries.
- 32.006 Reduction or suspension of contract payments upon finding of fraud.

- 32.006-2 Definitions.
- 32.006-3 Responsibilities.
- 32.006-5 Reporting.

- 32.071 Contract finance committee.

- SUBPART 32.1 – NON-COMMERCIAL ITEM PURCHASE FINANCING

- 32.114 Unusual contract financing.

- SUBPART 32.3 – LOAN GUARANTEES FOR DEFENSE PRODUCTION

- 32.304 Procedure.

- 32.304-1 Application for guarantee.

- SUBPART 32.4 – ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

- 32.409 Contracting officer action.

- 32.409-1 Recommendation for approval.
- 32.409-2 Recommendation for disapproval.

- SUBPART 32.5 – PROGRESS PAYMENTS BASED ON COSTS

- 32.501 General.

- 32.501-2 Unusual progress payments.

- 32.502 Preaward matters.

- 32.502-4 Solicitation provisions and contract clauses.

- SUBPART 32.7 – CONTRACT FUNDING

- 32.703 Contract funding requirements.

- 32.703-2 Contracts conditioned upon the availability of funds.

- SUBPART 32.9 – PROMPT PAYMENT

- 32.905 Payment documentation and process.
- 32.906 Contract financing payments.
- 32.908 Contract clauses.

- 32.908-90 Clause for tare.
- 32.908-91 Clause for distribution of commercial manuals.
- 32.908-92 Clause for acquisitions of carbon steel sheets or steel plates/sheets.
- 32.908-93 Clause for constructive acceptance.
- 32.908-94 Transporter proof of delivery (TPD).

PART 32 – CONTRACT FINANCING

(Revised November 8, 2013 through PROCLTR 2014-27)

TABLE OF CONTENTS

32.004 Contract performance in foreign countries.

32.006 Reduction or suspension of contract payments upon finding of fraud.

32.006-1 General.

32.006-2 Definitions.

32.006-3 Responsibilities.

32.006-5 Reporting.

32.071 Contract finance committee.

SUBPART 32.1 – NON COMMERCIAL-ITEM PURCHASE FINANCING

32.114 Unusual contract financing.

SUBPART 32.3 – LOAN GUARANTEES FOR DEFENSE PRODUCTION

32.304 Procedure.

32.304-1 Application for guarantee.

SUBPART 32.4 – ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

32.409 Contracting officer action.

32.409-1 Recommendation for approval.

32.409-2 Recommendation for disapproval.

SUBPART 32.5 – PROGRESS PAYMENTS BASED ON COSTS

32.501 General.

32.501-2 Unusual progress payments.

32.502 Preaward matters.

32.502-4 Contract clauses.

SUBPART 32.7 – CONTRACT FUNDING

32.703 Contract funding requirements.

32.703-2 Contracts conditioned upon the availability of funds.

SUBPART 32.9 – PROMPT PAYMENT

32.905 Payment documentation and process.

32.906 Contract financing payments.

32.907 Interest penalties.

32.907-1 Late invoice payment.

32.908 Contract clauses.

32.908-90 Clause for tare.

32.908-91 Clause for distribution of commercial manuals.

32.908-92 Clause for acquisitions of carbon steel sheets or steel plates/sheets.

32.908-93 Clause for constructive acceptance.

32.004 Contract performance in foreign countries.

(a) Insert the clause at 52.232-9007, Contractor’s Remittance Address (TACOM DLR – DLA Land and Maritime), in all solicitations and contracts for depot level repairable items managed by TACOM if award is to be made to a foreign vendor for work performed outside the U.S. This is also available for SPS/PD2 users.

32.006 Reduction or suspension of contract payments upon finding of fraud.

32.006-2 Definitions.

(a) DLA's remedy coordination official is the Associate General Counsel, Fraud Remedies Program.

32.006-3 Responsibilities.

(b) Instances of suspected fraud shall be promptly forwarded by the chief of the contracting office to local fraud counsel for appropriate action.

32.006-5 Reporting.

The DLA remedy coordination official shall prepare the report which shall be submitted by memorandum by the Director, DLA or his deputy to the Under Secretary of Defense (Acquisition and Technology) through the Director of Defense Procurement.

32.071 Contract finance committee.

(b)(2) Deviations. Requests for authority to deviate from the provisions of FAR Part 32, DFARS Part 232, or Part 32 of this directive shall be submitted to DLA HQ J72.

SUBPART 32.1 – NON-COMMERCIAL ITEM PURCHASE FINANCING

32.114 Unusual contract financing.

Per FAR 32.114, the contracting officer shall submit for approval the proposed alternate financing arrangement through J72 to obtain J7 coordination prior to submission to DPAP for review and concurrence.

SUBPART 32.3 – LOAN GUARANTEES FOR DEFENSE PRODUCTION

32.304 Procedure.

32.304-1 Application for guarantee.

(a) In the event Congressional authority to use guaranteed loans again becomes available (see DFARS 232.302(a)), any application based on a contract which cites or will cite DLA funds shall be forwarded by the chief of the contracting office (not delegable) to DLA HQ, attention: J8, with a copy to DLA Acquisition J72. This procedure will be used regardless of the office responsible for administration of, or payment under, the contract.

SUBPART 32.4 – ADVANCE PAYMENTS FOR NON-COMMERCIAL ITEMS

32.409 Contracting officer action.

32.409-1 Recommendation for approval.

The contracting officer's report, containing all the information specified in FAR 32.409-1, shall be forwarded by the chief of the contracting office (not delegable) to DLA HQ, attention: J8, with a copy to DLA Acquisition J72. The items indicated in FAR 32.409-1(b) and (c) require submission and investigation of all information cited in FAR 32.408. Information on how advance payments, in lieu of all other financing methods, are necessary for performance of the contract, and how the authorization of advance payment is in the public interest or, as applicable (see FAR 32.402), will facilitate the national defense, shall be included in documentation to be furnished pursuant to FAR 32.409-1(d).

32.409-2 Recommendation for disapproval.

If the contracting officer determines that the request should be disapproved, the determination shall be forwarded for approval by the chief of the contracting office (not delegable). The response to the contractor should include suggestions as to alternate financing methods. If the contract cites DLA funds, an information copy of the documents should be transmitted to DLA HQ following the distribution cited in 32.409-1 above. (The office administering or making payments under the contracts or maintaining the allotment records to which the payment will finally be charged is not pertinent.)

SUBPART 32.5 – PROGRESS PAYMENTS BASED ON COSTS

32.501 General.

32.501-2 Unusual progress payments.

(a) All unusual progress payments provisions along with supporting information, shall be forwarded by the chief of the contracting office (not delegable) for coordination and approval to DLA HQ, attention: J8, with a copy to DLA HQ, attention: J73, if the request concerns a contract which cites DLA funds.

32.502 Preaward matters.

32.502-4 Solicitation provisions and contract clauses.

(90) When FAR 52.232-16 is used in solicitations and/or contracts, the clause at 52.232-9000 may be included to specify additional terms as necessary.

SUBPART 32.7 – CONTRACT FUNDING

32.703 Contract funding requirements.

32.703-2 Contracts conditioned upon the availability of funds.

It is recognized that there may be instances, other than those described in FAR 32.703-2, when it may be necessary to initiate a purchase prior to the availability of funds. In such instances, the action will only be taken after the facts concerning the proposed solicitation are forwarded by the chief of the contracting office (not delegable) to DLA Acquisition J72, for review as to the necessity for such action and the obtaining of the required FAR deviation permitting use of the provisions set forth in FAR 52.232-18.

SUBPART 32.9 – PROMPT PAYMENT

(Revised April 28, 2014 through PROCLTR 2014-67)

32.905 Payment documentation and process.

32.905 Payment documentation and process.

(a) General.

(S-90)(1) Transporter proof of delivery (TPD).

(i) TPD is a commercial document generated by the contractor and/or the transporter of supplies and signed by the Government customer at time of delivery. TPD, in combination with adequate contractor documentation cross-referencing the TPD to the specific supplies provided, demonstrates customer receipt. Coupled with acceptance, this documentation allows the Government to initiate the payment process. The TPD process enables contractors to take advantage of existing wide area work flow (WAWF) functionality to execute the submission of proof of delivery documentation.

(ii) TPD is not a substitute for any other requested receipt and acceptance documentation, such as the material receipt acknowledgement (MRA) or the WAWF receiving report (RR), but is a supplement to such documentation.

(b) Content of invoices.

(S-90)(1) Transporter proof of delivery (TPD).

(i) DLA may accept supplies based on submission by the contractor of satisfactory documentation to demonstrate customer receipt of supplies under a specific contract or order in accordance with 32.905(a)(S-90)(1).

(ii) If the customer has submitted a supply discrepancy report (SDR) or MRA discrepancy indicator, payment shall not be made until the discrepancy is resolved.

(c) Authorization to pay.

(S-90)(1) Transporter proof of delivery (TPD).

(i) Application. Contracting officers at DLA Aviation, DLA Land and Maritime, and DLA Troop Support shall insert the clause at 52.232-9006, Transporter Proof of Delivery (TPD), in solicitations and awards for supplies when all of the following conditions apply:

(A) Contract deliveries will be made directly to DLA customers;

(B) Award will be made on a fixed-price basis;

(C) Inspection or acceptance at source is not required;

(D) Use of fast payment procedures is not authorized;

(E) Shipments to overseas destinations or to containerization consolidation points are not required; and

(F) Acquisition is not being conducted under the subsistence total order and receipt electronic system (STORES), Defense Medical Logistics Standard Support (DMLSS), Industrial Prime Vendor (IPV), or Integrated Logistics Partner (ILP) programs.

(ii) Transporter proof of delivery procedural guidance.

(A) Contract terms are as follows:

(1) Designate “inspection” and “acceptance” as “other;” and

(2) Designate the “Acceptor at Other” Department of Defense activity address code (DoDAAC) as follows:

(i) If “issue by” DoDAAC is SPM1 or SPE1, use SP1001.

(ii) If “issue by” DoDAAC is SPM2 or SPE2, use SP2001.

(iii) If “issue by” DoDAAC is SPM3 or SPE3, use SP3001.

(iv) If “issue by” DoDAAC is SPM4A1 or SPE4A1, use SP4001.

(v) If “issue by” DoDAAC is SPM5 or SPE5, use SP5001.

(vi) If “issue by” DoDAAC is SPM7L1 or SPE7L1, use SP7001.

(vii) If “issue by” DoDAAC is SPM7M1 or SPE7M1, use SP7001.

(viii) If “issue by” DoDAAC is SPM8 or SPE8, use SP8001.

32.906 Contract financing payments.

(a)(S-90) Contracting officers shall include the clause at 52.232-9010, Accelerated Payments to Small Business, in all solicitations and contracts, regardless of dollar value, if award is possible to a small business.

32.908 Contract clauses.

32.908-90 Clause for tare.

(a) Insert 52.232-9002, Tare Included or Excluded, in solicitations and/or contracts that discuss tare (see 32.908(90)(2)). Invitations for Bid (IFBs), requests for proposals (RFPs), and requests for quotes (RFQs) for fiber rope, cordage or twine when purchase is on a per pound basis and weight of tare is included would select the first paragraph, while those that exclude tare would select the second paragraph.

(b) Tare is the weight of a vehicle or container when it is empty. This weight is used in calculations of net weight for tasks which range from properly charging customers for consumer goods to taxing laden trucks as they cross borders. To calculate the net weight of a load, the container is weighed to establish the tare weight and then weighed again for the gross weight, and the tare is subtracted from the gross to find out how heavy the load is.

32.908-91 Clause for distribution of commercial manuals.

The clause at 52.232-9001, Invoice Confirmation – Commercial Manuals, may be used when the contractor will be required to distribute commercial manuals. Do not use if the requirement for commercial manuals is waived in the purchase order.

32.908-92 Clause for acquisitions of carbon steel sheets or steel plates/sheets.

Insert 52.232-9003, Billing Weight and Payments for Carbon Steel or Steel Plate/Sheets, in solicitations and/or contracts acquiring carbon steel sheets or steel plates/sheets.

32.908-93 Clause for constructive acceptance.

(a) Use clause 52.232-9008, Constructive Acceptance, in procurements not subject to FAR Part 12 when the requisitioning activity recommends and/or the contracting officer determines that a longer (more than 7 days) constructive acceptance is required in accordance with FAR 32.904(b)(1)(ii)(B)(4) to perform inspection or testing. Use with FAR 52.232-25. Contracting officers must document the contract file with justification for extending the constructive acceptance period beyond 7 days. See PGI 32.908-90(e) for guidance in determining the number of days needed. This clause shall not be used for routine supplies that do not require unusual inspection procedures.

(b) The following requirements apply when 52.232-9008 is used:

(1) The buyer shall fill in the blank based on the requisition’s stated number of calendar days needed for acceptance. The buyer may question the need for extending the period for constructive acceptance and ask for justification from the requiring activity.

(2) The following matrix can be used to determine the number of days needed for constructive acceptance based on the inspection code cited on the requisition. Contracting officers may use a different period than those stated in the table, if a more appropriate period is determined.

Constructive Acceptance Matrix Nonnuclear

Inspection level | Standard acceptance days allowed
1 | 40
2 | 60
3 | 25
4 | 7
5 | 60
6 | 7
7 | 30

Code definitions for inspection level:

1 – All non-nuclear level 1 material. Inspection is in accordance with applicable receipt inspection procedure (RIP).

2 – Non-nuclear level 1 material for which an RIP is invoked.

3 – Non-nuclear level 1 material with no RIP, but technical receipt inspection is desired.

4 – General receipt inspection-all items not covered above.

5 – Used to identify class 3 or 4 industrial plant equipment which is to be inspected at the end use location by code 380 personnel.

6 – To be determined by DLA Land and Maritime

7 – Hazardous material, as defined in the technical data.

32.908-94 Transporter proof of delivery (TPD).

Insert the clause at 52.232-9006, Transporter Proof of Delivery, when applicable in accordance with 32.905(c)(S-90)(1)(i) and when either the clause at 52.232-25, Prompt Payment, or the clause at 52.212-4, Contract Terms and Conditions – Commercial Items, is used.