Section 32.110 - Payment of subcontractors under cost-reimbursement prime contractsIf the contractor makes financing payments to a subcontractor under a cost-reimbursement prime contract, the contracting officer should accept the financing payments as reimbursable costs of the prime contract only under the following conditions:
(a) The payments are made under the criteria in subpart 32.5 for customary progress payments based on costs, 32.202-1 for commercial product or commercial service purchase financing, or 32.1003 for performance-based payments, as applicable.(b) If customary progress payments are made, the payments do not exceed the progress payment rate in 32.501-1, unless unusual progress payments to the subcontractor have been approved in accordance with 32.501-2.(c) If customary progress payments are made, the subcontractor complies with the liquidation principles of 32.503-8, 32.503-9, and 32.503-10.(d) If performance-based payments are made, the subcontractor complies with the liquidation principles of 32.1004(d).(e) The subcontract contains financing payments terms as prescribed in this part.65 FR 16279, Mar. 27, 2000, as amended at 86 FR 61029, Nov. 4, 2021