Overview
This section defines the scope of FAR Subpart 32.3, which establishes the policies and procedures for government-backed guarantees of private loans issued to contractors supporting national defense programs.
Key Rules
- Agency Authority: Applies only to "designated agencies" authorized to guarantee loans.
- Private Financing: The loans must be issued by private financial institutions, not directly by the government.
- Eligibility Requirement: Borrowers must be actively performing contracts related to national defense.
- Reference Standard: Directs users to FAR 30.102 for the underlying definitions and context regarding national defense requirements.
Practical Implications
- Access to Capital: Enables defense contractors to secure necessary working capital from private banks by using government guarantees to mitigate the lender's risk.
- Financial Liquidity: Ensures that critical national defense projects are not stalled by a contractor’s inability to obtain traditional commercial financing.