FAR 52.232-13—Notice of Progress Payments.
Plain-English Summary
FAR 52.232-13, Notice of Progress Payments, is a solicitation provision used in invitations for bids and requests for proposals that include a Progress Payments clause. It tells offerors that requesting customary progress payments under FAR subpart 32.5 will not be treated as a weakness, disadvantage, or negative evaluation factor in source selection. It also puts offerors on notice that the Progress Payments clause included in the solicitation will be carried into the resulting contract, with any necessary modifications under FAR 52.232-16 and Alternate I. Finally, it explains an important limitation: even if the clause is in the contract, it becomes inoperative when the Government determines the contractor’s accounting system and controls are inadequate to segregate and accumulate contract costs. In practice, this provision protects contractors from being penalized for needing progress payments, while also warning them that payment eligibility depends on having an acceptable accounting system and cost-control structure.
Key Rules
Progress payments are not a handicap
The Government may not treat the need for customary progress payments as a negative factor in award. Offerors should not be downgraded, excluded, or otherwise penalized simply because they require progress payments under the FAR.
Applies only when progress payments clause is included
This notice provision is used in solicitations that include a Progress Payments clause. It is not a standalone payment term; it works only in connection with the underlying progress payments framework in FAR subpart 32.5 and the contract clause that follows from the solicitation.
Clause will flow into the contract
The solicitation warns that the Progress Payments clause included in the solicitation will be included in the resulting contract. If needed, it may be modified or altered in accordance with FAR 52.232-16 and Alternate I.
Accounting system adequacy controls operability
Even if the contract contains the Progress Payments clause, the clause is inoperative during any period when the Government determines the contractor’s accounting system and controls are inadequate for segregating and accumulating contract costs. Payment rights under the clause depend on an acceptable accounting system.
Customary progress payments only
The notice refers to customary progress payments as regulated in FAR subpart 32.5. It does not create a right to unusual payment terms or override the substantive requirements for progress payment eligibility, administration, or limitations.
Responsibilities
Contracting Officer
Include this provision in invitations for bids and requests for proposals that contain a Progress Payments clause. Ensure offerors are not evaluated adversely for needing customary progress payments, and administer the resulting contract so the progress payments clause is included and applied only when the contractor’s accounting system is adequate.
Offeror/Contractor
Understand that requesting customary progress payments is not supposed to hurt the offer, but also ensure the accounting system and internal controls can segregate and accumulate contract costs. If the system is found inadequate, expect the progress payments clause to be inoperative until deficiencies are corrected.
Government Evaluators/Source Selection Officials
Do not use the need for progress payments as a negative evaluation factor. Evaluate proposals on the stated criteria without penalizing a firm for relying on progress payments authorized by the solicitation and FAR subpart 32.5.
Agency/Payment Administration Personnel
Monitor whether the contractor’s accounting system and controls remain adequate for cost segregation and accumulation. If inadequacies are identified, treat the progress payments clause as inoperative for the affected period and coordinate corrective action and payment administration accordingly.
Practical Implications
Contractors can ask for progress payments without fear that the request itself will count against them in award decisions, which is especially important for firms with limited working capital.
The biggest operational risk is accounting system weakness: if the Government finds the system cannot properly segregate and accumulate costs, progress payments can stop being available under the clause.
Offerors should not assume the notice guarantees payment; it only removes the stigma of needing progress payments and points back to the substantive rules in FAR subpart 32.5 and 52.232-16.
Contracting officers should make sure the solicitation and resulting contract are aligned, because the notice provision is tied to the presence of the Progress Payments clause and its required flowdown into the contract.
A common pitfall is confusing progress payments with invoice payments for completed work; this provision concerns financing under the progress payments framework, not ordinary payment for accepted supplies or services.
Official Regulatory Text
As prescribed in 32.502-3 (a) , insert the following provision in invitations for bids and requests for proposals that include a Progress Payments clause: Notice of Progress Payments (Apr 1984) The need for customary progress payments conforming to the regulations in subpart 32.5 of the Federal Acquisition Regulation (FAR) will not be considered as a handicap or adverse factor in the award of the contract. The Progress Payments clause included in this solicitation will be included in any resulting contract, modified or altered if necessary in accordance with subsection 52.232-16 and its Alternate I of the FAR. Even though the clause is included in the contract, the clause shall be inoperative during any time the contractor’s accounting system and controls are determined by the Government to be inadequate for segregation and accumulation of contract costs. (End of clause)