[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR32.205]



[Page 657]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

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 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]