Overview
This section identifies the specific statutory legal authorities that empower the federal government to provide contract financing to contractors.
Key Rules
- Statutory Basis: Contract financing is not discretionary; it is grounded in specific federal laws that govern how the government can provide funds before final delivery.
- Civilian Agency Authority: Financing for civilian agencies is authorized under 41 U.S.C. chapter 45.
- Defense Agency Authority: Financing for military and defense-related agencies is authorized under 10 U.S.C. chapter 277.
- Industrial Base Authority: Title III of the Defense Production Act of 1950 provides the authority for financing specifically aimed at expanding productive capacity and ensuring the supply of critical materials.
Practical Implications
- This section serves as the legal foundation for all subsequent financing methods in FAR Part 32, such as progress payments, advance payments, and performance-based payments.
- Contracting officers and legal counsel rely on these citations to ensure that providing government funds to a contractor prior to the acceptance of supplies or services is legally defensible and compliant with federal law.