Overview
This section directs contracting offices to utilize specialized financial personnel to evaluate a contractor's creditworthiness and determine the most suitable financing methods for a given contract.
Key Rules
- Availability of Experts: Contracting offices must have access to and utilize personnel competent in credit and financial analysis.
- Financial Capability Assessment: Contracting officers should consult with financing experts to determine if an offeror or contractor has the financial resources necessary to perform the work.
- Financing Selection: Expert consultation is required to decide which specific form of contract financing (e.g., advance payments, progress payments, or performance-based payments) is appropriate for a specific procurement.
Practical Implications
- Risk Mitigation: Contracting Officers are not expected to be financial analysts; they must rely on specialists to minimize the risk of contractor default due to insolvency.
- Informed Decision Making: This ensures that the government provides the least amount of financing necessary while still supporting the contractor's ability to deliver the required goods or services.