(1) A contract entered into by a procurement unit may provide for installment payments, including interest charges, over a period of time, if the procurement officer makes a written finding that:

1. (a) the use of installment payments are in the interest of the procurement unit;
2. (b) installment payments are not used as a method of avoiding budgetary constraints;
3. (c) the procurement unit has obtained all budgetary approvals and other approvals required for making the installment payments;
4. (d) all aspects of the installment payments required in the contract are in accordance with the requirements of law; and
5. (e) for a contract awarded through an invitation for bids or a request for proposals, the invitation for bids or request for proposals indicates that installment payments are required or permitted.

(3) Circumstances where prepayment may be necessary for, or beneficial to, the procurement unit include:

1. (a) when it is customary in the industry to prepay for the procurement item;
2. (b) if the procurement unit will receive an identifiable benefit by prepaying, including reduced costs, additional procurement items, early delivery, better service, or better contract terms; or
3. (c) other circumstances permitted by rule made by the applicable rulemaking authority.

(5) A prepaid expenditure shall be supported by documentation indicating:

1. (a) the amount of the prepayment;
2. (b) the prepayment schedule;
3. (c) the procurement items to which each prepayment relates;
4. (d) the remedies for a contractor's noncompliance with requirements relating to the provision of the procurement items; and
5. (e) all other terms and conditions relating to the payments and the procurement items.