FAR 32.302—Authority.
Plain-English Summary
FAR 32.302 explains the legal authority behind defense production loan guarantees and identifies who may act as the guaranteeing agency for those guarantees. It states that Congress has authorized Federal Reserve Banks to serve as fiscal agents of the United States when making loan guarantees for defense production under section 301 of the Defense Production Act of 1950. It also identifies, through Executive Order 10480 as amended, the federal agencies that have been designated as guaranteeing agencies: the Department of Defense, Department of Energy, Department of Commerce, Department of the Interior, Department of Agriculture, General Services Administration, and National Aeronautics and Space Administration. In practice, this section matters because it establishes which entities have the authority to sponsor or administer these guarantees and clarifies that the Federal Reserve Banks may perform the fiscal-agent function on their behalf. For contractors, lenders, and agency personnel, the section is a threshold authority provision: it tells you who can legally participate in the guarantee process and under what governmental authority the arrangement exists.
Key Rules
Federal Reserve fiscal-agent authority
Congress has authorized Federal Reserve Banks to act as fiscal agents of the United States for making loan guarantees for defense production. This means the Federal Reserve Banks may perform the financial processing role associated with these guarantees on behalf of the government.
Defense Production Act basis
The authority comes from section 301 of the Defense Production Act of 1950. The section ties the guarantee program to a specific statutory source, which is important because the program exists only within that legal framework.
Designated guaranteeing agencies
Executive Order 10480, as amended, designates the agencies that may serve as guaranteeing agencies. Only the listed agencies have this designation under this section.
List of authorized agencies
The designated guaranteeing agencies are the Department of Defense, Department of Energy, Department of Commerce, Department of the Interior, Department of Agriculture, General Services Administration, and National Aeronautics and Space Administration. These are the agencies that may act in the guarantee role described here.
Responsibilities
Federal Reserve Banks
Act as fiscal agents of the United States when making loan guarantees for defense production, carrying out the financial and administrative functions assigned to them on behalf of guaranteeing agencies.
Designated guaranteeing agencies
Use their delegated or designated authority to sponsor or administer defense production loan guarantees within the scope of the Defense Production Act and Executive Order 10480, as amended.
Contractors and lenders
Confirm that any defense production loan guarantee involves a properly designated guaranteeing agency and that the transaction is being handled through the authorized fiscal-agent structure.
Contracting officers and agency officials
Ensure that any guarantee action relies on the correct statutory and executive-order authority and that only the designated agencies are treated as guaranteeing agencies under this section.
Practical Implications
This section is mainly an authority check: before relying on a defense production loan guarantee, users must verify that the agency involved is one of the designated guaranteeing agencies.
A common pitfall is assuming any federal agency can issue or back a defense production guarantee; under this section, only the listed agencies have that designation.
Another practical issue is confusing the Federal Reserve Bank’s role with agency authority: the Federal Reserve Bank acts as fiscal agent, but it does not itself become the guaranteeing agency.
For contractors and lenders, the key day-to-day takeaway is to confirm the chain of authority early so financing arrangements are not delayed or invalidated by using the wrong agency or process.
For contracting personnel, this section should be read as a jurisdictional and procedural gatekeeper, not as a substantive rule about guarantee terms or eligibility criteria.
Official Regulatory Text
Congress has authorized Federal Reserve Banks to act, on behalf of guaranteeing agencies, as fiscal agents of the United States in the making of loan guarantees for defense production (Section301, Defense Production Act of1950 (50 U.S.C. App.2091)). By Executive Order 10480, August 14,1953 (3 CFR1949-53), as amended, the President has designated the following agencies as guaranteeing agencies: (a) Department of Defense. (b) Department of Energy. (c) Department of Commerce. (d) Department of the Interior. (e) Department of Agriculture. (f) General Services Administration. (g) National Aeronautics and Space Administration.