(a) The contracting officer may provide unusual progress payments only if—
- (1) The contract necessitates predelivery expenditures that are large in relation to contract price and in relation to the contractor's working capital and credit;
- (2) The contractor fully documents an actual need to supplement any private financing available, including guaranteed loans; and
- (3) The contractor's request is approved by the head of the contracting activity or a designee. In addition, see 32.502-2.
- (b) The excess of the unusual progress payment rate approved over the customary progress payment rate should be the lowest amount possible under the circumstances.
- (c) Progress payments will not be considered unusual merely because they are on letter contracts or the definitive contracts that supersede letter contracts.