D.C. Mun. Regs. r. 27-3219

Current through Register Vol. 71, No. 24, June 14, 2024

Rule 27-3219 - SUSPENSION OR REDUCTION OF PROGRESS PAYMENTS

3219.1

In each contract that provides for progress payments, the contracting officer shall include provisions, approved by the Director, which assert the District's right to reduce or suspend progress payments, or increase the liquidation rate, as appropriate, in the following circumstances:

(a) If the contractor fails to maintain an efficient and reliable accounting system and controls that are adequate for the proper administration of progress payments;

(b) If the contracting officer determines that contract performance, including full liquidation of progress payments, is endangered by the contractor's financial condition or by a failure to make progress on the performance of the contract;

(c) If the inventory allocated to the contract exceeds reasonable requirements;

(d) If the contractor is delinquent in paying the costs of contract performance in the ordinary course of business;

(e) If the unliquidated progress payments exceed the fair value of undelivered work under the contract; and

(f) If the sum of the total costs incurred under a contract, plus the estimated costs to complete performance, are likely to exceed the contract price.

3219.2

Actions under this section shall only be taken in accordance with the contract terms and only after the following:

(a) The contracting officer gives notice to the contractor of the intended action and provides an opportunity for discussion; and

(b) The contracting officer evaluates the effect of the action on the contractor's operations, based on the contractor's financial condition, projected cash requirements, and the existing or available credit arrangements.

3219.3

The contracting officer shall take immediate unilateral action only if warranted by circumstances such as overpayments or unsatisfactory contract performance.

3219.4

In all cases, the contracting officer shall document the contract file with evidence supporting the contracting officer's decisions.

D.C. Mun. Regs. r. 27-3219

Final Rulemaking published at 35 DCR 1633 (February 26, 1988)