Overview
This section specifies that agencies have the authority to authorize advance payments to contractors when necessary to facilitate national defense under the provisions of Public Law 85-804.
Key Rules
- National Defense Justification: Advance payments are strictly permitted for actions taken to facilitate the national defense under Public Law 85-804 (Extraordinary Contractual Actions).
- Broad Applicability: These payments are applicable to both negotiated contracts and sealed bid contracts.
- Timing of Authorization: Advance payments may be authorized either at the time of contract award or at any point after the award has been made.
- Cross-References: The regulation specifically points to FAR subpart 50.1 for extraordinary actions and FAR 32.405 for additional procedures regarding advance payment determination.
Practical Implications
- This provision offers a critical financial lifeline to contractors involved in essential national security projects where standard payment structures may be insufficient to maintain performance.
- It grants the government flexibility to provide liquidity even in sealed bid environments, which are typically more rigid than negotiated procurements.