FAR 52.232-14—Notice of Availability of Progress Payments Exclusively for Small Business Concerns.
Plain-English Summary
FAR 52.232-14 is a solicitation provision used in sealed bidding when the government anticipates that both small business concerns and other bidders may compete, but only small businesses would need progress payments. It tells bidders that the Progress Payments clause, if included in the resulting contract, is available only to small business concerns and that a bid from a non-small business conditioned on receiving progress payments must be rejected as nonresponsive. In practice, this provision protects the government from having to extend progress-payment financing to large businesses in this specific bidding context while preserving the intended financing support for eligible small businesses. It also gives all bidders clear notice before bid opening so they understand the financing terms that will apply and can price and structure their bids accordingly. The section is tied to the prescription in FAR 32.502-3(b)(2), so it is not a general-purpose clause; it is used only when the stated conditions exist. For contracting officers, the provision helps avoid post-opening disputes over financing terms and bid responsiveness. For bidders, it is a warning that conditioning a bid on progress payments can be fatal unless the bidder qualifies as a small business concern.
Key Rules
Use only in sealed bidding
This provision is prescribed for invitations for bids, not for all contracting methods. It applies only when the contracting officer anticipates the specific conditions described in FAR 32.502-3(b)(2).
Small business only for progress payments
The resulting contract’s Progress Payments clause will be available only to small business concerns. Large businesses cannot rely on this financing term under this provision.
Non-small business conditional bids fail
If a bidder that is not a small business concern conditions its bid on inclusion of a progress payment clause, the bid must be rejected as nonresponsive. The financing condition becomes part of the bid and cannot be waived after opening.
Notice must be given before bidding
The provision serves as advance notice in the solicitation so bidders know the financing rules before submitting bids. This helps ensure fair competition and prevents misunderstanding about available contract financing.
Responsiveness is determined at bid opening
Because the issue affects bid responsiveness, the contracting officer must evaluate the bid as submitted. A non-small business bidder cannot cure a conditional bid after opening by later agreeing to remove the condition.
Responsibilities
Contracting Officer
Determine whether the conditions in FAR 32.502-3(b)(2) exist, include the provision in the IFB when required, and reject as nonresponsive any bid from a non-small business concern that is conditioned on receiving progress payments.
Small Business Concern Bidder
Submit a bid consistent with the solicitation terms and understand that progress payments, if included in the resulting contract, are available only to small business concerns. Avoid unnecessary bid conditions that could create responsiveness issues.
Non-Small Business Bidder
Do not condition the bid on the inclusion of a progress payment clause. If progress payments are needed, recognize that this provision makes that financing unavailable and structure the bid accordingly or choose not to bid.
Agency
Ensure the solicitation uses the correct financing and bidding provisions for the acquisition strategy and that the IFB clearly communicates any limitation on progress payments to small business concerns only.
Practical Implications
This provision can be outcome-determinative in sealed bidding because a financing condition in a bid can make the bid nonresponsive, even if the price is otherwise acceptable.
Contracting officers should check the solicitation carefully: the provision is not automatic and should be used only when the regulatory prescription is met.
Bidders should avoid attaching assumptions or qualifications about progress payments unless they are clearly permitted by the solicitation; doing so can jeopardize award eligibility.
Small businesses should confirm they actually qualify as small under the applicable NAICS size standard before relying on the availability of progress payments.
Non-small businesses that need progress-payment financing should plan for alternative financing or consider whether the solicitation structure makes bidding impractical.
Official Regulatory Text
As prescribed in 32.502-3 (b)(2) , insert the following provision in invitations for bids if it is anticipated that (a) both small business concerns and others may submit bids in response to the same invitation and (b) only the small business bidders would need progress payments: Notice of Availability of Progress Payments Exclusively for Small Business Concerns (Apr 1984) The Progress Payments clause will be available only to small business concerns. Any bid conditioned upon inclusion of a progress payment clause in the resulting contract will be rejected as nonresponsive if the bidder is not a small business concern. (End of clause)