GSA Office of Governmentwide Acquisition Policy
U.S. General Services Administration
1800 F Street, NW
Washington, DC 20405
www.gsa.gov
CAAC LETTER 2020-03
April 15, 2020
MEMORANDUM FOR CIVILIAN AGENCIES
FROM: WILLIAM CLARK
CHAIR
CIVILIAN AGENCY ACQUISITION COUNCIL (CAAC)
SUBJECT: Class Deviation from the FAR Regarding Customary
Progress Payment Rates Based on Costs
This CAAC letter is being issued to serve as consultation
in accordance with FAR 1.404, allowing agencies to authorize a
class deviation in response to the Coronavirus Disease 2019
(COVID-19) national emergency. Agencies are encouraged to issue
FAR deviations for the customary progress payment rates based on
costs at FAR 32.501-1 to increase the progress payment rate to
90 percent for large business concerns, and 95 percent for small
business concerns. Contracting officers shall use the attached
deviation FAR text as follows:
● Use the deviated language for 32.501-1(a), in lieu of the
current language at 32.501-1(a)
● Use 52.232-16, Progress Payments (Apr 2012)(Deviation Apr
2020), in lieu of the clause at FAR 52.232-16, Progress
Payments (Apr 2012). NOTE: Remember to include FAR text
unchanged in the clause shown as asterisks *** or *****
● Use Alternate I (Mar 2000)(Deviation Apr 2020), in lieu of
Alternate I of FAR clause 52.232-16 (Mar 2000)
Agencies are advised to review any relevant clauses in
their supplement and take any action that is appropriate. It is
recommended that the deviation be made effective immediately.
Agencies should consider whether to cancel the deviation after
the COVID-19 emergency passes. Adjustments on liquidations are
not required for previously delivered items; financing
limitations will be accomplished through Section III of the
Standard Form 1443.
Agencies are reminded that FAR 1.404 requires agencies to
furnish a copy of each approved class deviation to the GSA
Regulatory Secretariat. Agencies must email the deviation to
WILLIAM CLARK
Digitally signed by WILLIAM
CLARK
Date: 2020.04.15 17:22:25 -04'00'
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[email protected]. Please include whether or not the document
can be posted on acquisition.gov.
If you have any questions or require additional information
about this letter, please contact Michael O. Jackson at (202)
208-4949 or at [email protected].
Attachment A
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CAAC Letter 2020-03
Class Deviation from the FAR Regarding Customary
Progress Payment Rates Based on Costs
Attachment A
FAR Deviation text - Baseline FAC 2020-05, effective March 30,
2020
Additions are [bolded and bracketed], deletions are struck
through.
FAR text unchanged shown as asterisks *** or *****
PART 32-CONTRACT FINANCING
* * * * *
Subpart 32.5—Progress Payments Based on Costs
* * * * *
32.501-1 Customary progress payment rates.
(a) The customary progress payment rate is 80 [90] percent,
applicable to the total costs of performing the contract.
The customary rate for contracts with small business
concerns is 85 [95] percent.
* * * * *
PART 52—SOLICITATION PROVISIONS AND CONTRACT CLAUSES
* * * * *
Subpart 52.2—Text of Provisions and Clauses
* * * * *
52.232-16 Progress Payments.
As prescribed in 32.502-4(a), insert the following clause:
PROGRESS PAYMENTS (APR 2012) [DEVIATION (APR 2020)]
The Government will make progress payments to the
Contractor when requested as work progresses, but not more
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frequently than monthly, in amounts of $2,500 or more approved
by the Contracting Officer, under the following conditions:
(a) Computation of amounts. (1) Unless the Contractor requests a
smaller amount, the Government will compute each progress
payment as 80 [90] percent of the Contractor’s total costs
incurred under this contract whether or not actually paid, plus
financing payments to subcontractors (see paragraph (j) of this
clause), less the sum of all previous progress payments made by
the Government under this contract. The Contracting Officer
will consider cost of money that would be allowable under FAR
31.205-10 as an incurred cost for progress payment purposes.
* * *
(6) The total amount of progress payments shall not exceed
80 [90] percent of the total contract price.
* * * * *
(b) Liquidation. Except as provided in the Termination of
Convenience of the Government clause, all progress payments
shall be liquidated by deducting from any payment under this
contract, other than advance or progress payments, the
unliquidated progress payments, or 80 [90] percent of the amount
invoiced, whichever is less. The Contractor shall repay to the
Government any amounts required by a retroactive price
reduction, after computing liquidations and payments on past
invoices at the reduced prices and adjusting the unliquidated
progress payments accordingly. The Government reserves the
right to unilaterally change from the ordinary liquidation rate
to an alternate rate when deemed appropriate for proper contract
financing.
* * * * *
Alternate I (Mar 2000) [DEVIATION (APR 2020)]. If the contract
is with a small business concern, change each mention of the
progress payment and liquidation rates excepting paragraph (k)
to the customary rate of 85 [95] percent for small business
concerns (see FAR 32.501-1).
* * * * *
