[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR32.205]

[Page 639-640]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
              (This book contains chapter 1, parts 1 to 51)

                CHAPTER 1--FEDERAL ACQUISITION REGULATION
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PART 32_CONTRACT FINANCING--Table of Contents
 
             Subpart 32.2_Commercial Item Purchase Financing
 
Sec. 32.205  Procedures for offeror-proposed commercial contract financing.

    (a) Under this procedure, each offeror may propose financing terms. 
The contracting officer must then determine which offer is in the best 
interests of the United States.
    (b) Solicitations. The contracting officer must include in the 
solicitation the provision at 52.232-31, Invitation to Propose Financing 
Terms. The contracting officer must also--
    (1) Specify the delivery payment (invoice) dates that will be used 
in the evaluation of financing proposals; and
    (2) Specify the interest rate to be used in the evaluation of 
financing proposals (see paragraph (c)(4) of this section).
    (c) Evaluation of proposals. (1) When contract financing terms vary 
among offerors, the contracting officer must

[[Page 640]]

adjust each proposed price for evaluation purposes to reflect the cost 
of providing the proposed financing in order to determine the total cost 
to the Government of that particular combination of price and financing.
    (2) Contract financing results in the Government making payments 
earlier than it otherwise would. In order to determine the cost to the 
Government of making payments earlier, the contracting officer must 
compute the imputed cost of those financing payments and add it to the 
proposed price to determine the evaluated price for each offeror.
    (3) The imputed cost of a single financing payment is the amount of 
the payment multiplied by the annual interest rate, multiplied by the 
number of years, or fraction thereof, between the date of the financing 
payment and the date the amount would have been paid as a delivery 
payment. The imputed cost of financing is the sum of the imputed costs 
of each of the financing payments.
    (4) The contracting officer must calculate the time value of 
proposal-specified contract financing arrangements using as the interest 
rate the nominal discount rate specified in Appendix C of the Office of 
Management and Budget (OMB) Circular A-94, ``Guidelines and Discount 
Rates for Benefit-Cost Analysis of Federal Programs'', appropriate to 
the period of contract financing. Where the period of proposed financing 
does not match the periods in the OMB Circular, the interest rate for 
the period closest to the finance period shall be used. Appendix C is 
updated yearly, and is available from the Office of Economic Policy in 
the Office of Management and Budget (OMB).

[60 FR 49711, Sept. 26, 1995, as amended at 65 FR 16279, Mar. 27, 2000]