Code of Federal Regulations (Last Updated: July 5, 2024) |
Title 48 - Federal Acquisition Regulations System |
Chapter 1 - Federal Acquisition Regulation |
SubChapter E - General Contracting Requirements |
Part 32 - Contract Financing |
Subpart 32.5 - Progress Payments Based on Costs |
§ 32.503-10 - Establishing alternate liquidation rates.
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32.503-10 Establishing alternate liquidation rates.
(a) The contracting officer must ensure that the liquidation rate is -
(1) High enough to result in Government recoupment of the applicable progress payments on each billing; and
(2) Supported by documentation included in the administration office contract file.
(b) The minimum liquidation rate is the expected progress payments divided by the contract price. Each of these factors is discussed below:
(1) The contracting officer must compute the expected progress payments by multiplying the estimated cost of performing the contract by the progress payment rate.
(2) For purposes of computing the liquidation rate, the contracting officer may adjust the estimated cost and the contract price to include the estimated value of any work authorized but not yet priced and any projected economic adjustments; however, the contracting officer's adjustment must not exceed the Government's estimate of the price of all authorized work or the funds obligated for the contract.
(3) The following are examples of the computation. Assuming an estimated price of $2,200,000 and total estimated costs eligible for progress payments of $2,000,000:
(4) Minimum liquidation rates will generally be expressed to tenths of a percent. Decimals between tenths will be rounded up to the next highest tenth (not necessarily the nearest tenth), since rounding down would produce a rate below the minimum rate calculated.
[48 FR 42328, Sept. 19, 1983, as amended 52 FR 30077, Aug. 12, 1987; 65 FR 16281, Mar. 27, 2000]