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PROGRESS PAYMENTS FOR ALL CONTRACTORS WOULD BE LIMITED TO 80 PERCENT OF THE WORK ACCOMPLISHED WHEN THE SPECIFIC TERMS AND PRICE OF A CONTRACT HAVE NOT BEEN MADE DEFINITE. WHERE SEPARATE PROGRESS PAYMENT RATES ARE NECESSARY FOR DIFFERENT WORK UNDER THE SAME CONTRACT. OUR ONLY COMMENT ON THE PROPOSED CHANGES IS THAT WE SUPPORT THE CONCEPT OF GOVERNMENT-WIDE UNIFORMITY. WILL REQUIRE STILL FURTHER CHANGES TO THE CUSTOMARY PROGRESS PAYMENT RATES WITH RESPECT TO DEFENSE AGENCIES.

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B-223827.2, OCT 31, 1986, OFFICE OF THE GENERAL COUNSEL

PRECIS-UNAVAILABLE

MS. MARGARET A. WILLIS:

FAR SECRETARIAT

GENERAL SERVICES ADMINISTRATION

THIS RESPONDS TO YOUR LETTER OF SEPTEMBER 8, 1986, REQUESTING OUR COMMENTS ON FEDERAL ACQUISITION REGULATION (FAR) CASE NO. 85-58, A PROPOSAL TO CHANGE FAR PARTS 32 AND 52 WITH RESPECT TO PROGRESS PAYMENTS.

THE PROPOSED RULE WOULD RESULT IN BASICALLY THREE CHANGES TO THE FAR. FIRST, THE CUSTOMARY PROGRESS PAYMENT RATE WOULD BE REDUCED FROM 95 PERCENT TO 85 PERCENT FOR SMALL BUSINESS CONCERNS AND FROM 90 TO 80 PERCENT FOR ALL OTHER CONTRACTORS. SECOND, IN ACCORDANCE WITH SECTION 916(B) OF THE DEFENSE PROCUREMENT IMPROVEMENT ACT OF 1985, PUB.L. NO. 99-145, PROGRESS PAYMENTS FOR ALL CONTRACTORS WOULD BE LIMITED TO 80 PERCENT OF THE WORK ACCOMPLISHED WHEN THE SPECIFIC TERMS AND PRICE OF A CONTRACT HAVE NOT BEEN MADE DEFINITE. THIS RULE WOULD APPLY FOR BOTH DEFENSE AND CIVILIAN AGENCIES IN THE INTEREST OF GOVERNMENT-WIDE UNIFORMITY. THIRD, WHERE SEPARATE PROGRESS PAYMENT RATES ARE NECESSARY FOR DIFFERENT WORK UNDER THE SAME CONTRACT, A SPECIAL CONTRACT PROVISION WOULD BE REQUIRED TO DESCRIBE HOW THE SEPARATE RATES WOULD BE APPLIED.

OUR ONLY COMMENT ON THE PROPOSED CHANGES IS THAT WE SUPPORT THE CONCEPT OF GOVERNMENT-WIDE UNIFORMITY. IN THIS CONNECTION, WE NOTE THAT LIMITATIONS CONTAINED IN THE FISCAL YEAR 1987 APPROPRIATIONS ACT, H.R.J. RES. 738, OCT. 17, 1986, WILL REQUIRE STILL FURTHER CHANGES TO THE CUSTOMARY PROGRESS PAYMENT RATES WITH RESPECT TO DEFENSE AGENCIES. SUGGEST THEREFORE THAT CONSIDERATION BE GIVEN TO CHANGING THE FAR'S CUSTOMARY PROGRESS PAYMENT RATES TO REFLECT THE LIMITS NOW APPLICABLE TO DEFENSE AGENCIES IN ORDER TO ACHIEVE UNIFORM PROGRESS PAYMENT RATES GOVERNMENT-WIDE.

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