which cannot be tolerated by the particular program concerned. When performance bonds have been furnished, the surety shall be required to subordinate its rights in favor of the guaranteed loan.

(4) The criterion that the materials or services to be provided cannot readily be procured from alternative sources does not require the finding that the materials or services are absolutely unobtainable elsewhere. The criterion should be so applied as to permit guarantees of loans when, although the materials or services can be obtained elsewhere, such factors as the urgency of supply schedules, technical capacity of the contractor, comparative prices, and time and expense involved in re-issuing the contract, including termination payments, establish that it is to the Government's advantage not to resort to alternative sources merely because the contractor or subcontractor may require a guaranteed loan.

(5) If it is known at the time the contract is to be awarded that the low offeror who is technically qualified and competent to furnish the required materials and services will require a guaranteed loan, the Contracting Officer should obtain appropriate staff advice and in reaching a decision should consider at least the following:

(i) The savings to be realized by awarding the contract to the low offeror;

(ii) The risk to the Government in guaranteeing a loan; and

(iii) The likelihood, if award is made to the second low offeror, of his applying for

a guaranteed loan at a later date.

Extreme care should be exercised in rejecting a low bid or proposal simply because the low offeror requires a guaranteed loan.

(6) The amount of the loan should bear reasonable relationship to the value and terms of the contract, the probable investment required to be made by the contractor in payrolls and inventories, etc., the frequency with which contract payments are to be made, and the borrower's current working capital position.

(7) Borrowings for working capital purposes under guaranteed loans shall be limited to the amount necesssary to perform the contracts for which the loan is sought. In order that the contractor will also use its own funds in the performance of the contracts, amounts outstanding under the loan or line of credit shall be limited to an amount not to exceed 90 percent of the borrower's investment in its contracts, regardless of the total amount of the loan or line of credit authorized. The borrower's investment includes all items for which the borrower would be entitled to payment on performance or termination of contracts, but does not include any items for which no work has been done nor expenditures made.

(8) Unless there are exceptional circumstances, the loan should mature not later than 30 days after the estimated date of final payment under the contract.

§9-30.109 Partial payments-description.

Partial payments, as a financing device, may be used in conjunction with other methods of financing, such as guaranteed loans.

Subpart 9-30.2 Basic Policies

$9-30.209 Order of preference.

(a) With respect to cost-reimbursement type procurement geneally, Contracting Officers shall require contractors to employ private financing with or without assignment of contract payments (FPR Subpart 1-30.7). Periodic interim reimbursement on account of incurred cost and payment of fixed fee (if any) will normally be made, reducing the amount of necessary financing for working capital (§9-7.202-4). In some instances, where no other means of adequate financing is available on reasonable terms, DOE may approve (in order of preference) a guaranteed loan or an advance payment for performance of the contract.

(b) Partial payment, as provided for in the standard form of supply contract (FPR 116.901-32), should be considered as a form of contractor financing in the second place in the order of preference.

Subpart 9-30.4 Advance Payments

§9-30.400 Scope of subpart.

This subpart does not apply to financing arrangements for contracts with DOE prime operating and on-site service contractors, who are financed through special arrangements.

$9-30.403 Interest.

(a) Interest will be charged on the unliquidated balance of all advance payments at the rate established by the Secretary of the Treasury pursuant to Pub. L. 92-41, 85 Stat. 97, for the Renegotiation Board; however, advance payments may be made without interest:

(1) Pursuant to FPR 1-30.403;

(2) In CPFF contracts for construction or engineering service; or

(3) Where the contract provides that title to the advance funds has been retained by the Government (§9-50.704-18).

§9-30.404 Standards—amounts-need.

The total advance payment shall not exceed 90 percent of the value of the uncompleted portion of the contract and shall not include any portion of the anticipated profit or the fixed fee.

§9-30.406 Responsibility-delegation of authority.

The Head of the Procuring Activity or designee shall have the responsibility and authority for making the findings and determinations referenced in FPR 1-30.406.

Subpart 9-30.5 Progress Payments Based on Costs

$9-30.501 Percentage or stage of completion.

In accordance with FPR 1-30.501, the Head of the Procuring Activity may authorize progress payments based on a percentage or stage of completion.

§9-30.505 Unusual progress payments—standards—procedures.

Requests for unusual progress payments shall be submitted to the Head of the Procuring Activity for approval. The HPA shall forward all requests which are considered favorable, with supporting information, to the Senior Procurement Official, Headquarters, who, with the concurrence of the Controller, will grant final approval.

§9-30.517 Contract financing office clearance.

The prior approval specified here shall be obtained from the Senior Procurement Official, Headquarters, who with the concurrence of the Controller, will grant final approval.

$9-30.528 Consideration for amendments providing for progress payments.

To the extent applicable and appropriate, these provisions may also relate to a partial payments clause. If justified, an amendment for this purpose may be made without consideration, pursuant to FPR Part 1-17 and Part 9-17. When any such amendment is made, the consent of sureties, if any, should be obtained.

§9-30.701 General.

Subpart 9-30.7 Assignment of Claims

FPR 1-30.701 is implemented as follows:

(a) In the case of prime contracts, when it has been determined that the financing of contracts will be facilitated in the interest of DOE program, it is the policy of DOE that such contracts provide, or be amended without consideration (see Assignment of Claims Act of 1940) to provide, that payments to be made to an assignee shall not be subject to reduction or setoff: (1) For any liability of any nature of the assignor to the United States or any department or agency thereof which arises independently of such contracts; or

(2) For any liability of the assignor on account of:

(i) Renegotiation under any renegotiation statute or under any statutory renegotiation article in the contract;

(ii) Fines;

(iii) Penalties (which term does not include amounts which may be collected or withheld from the assignor in accordance with, or for failure to comply with, the terms of the contract); or

(iv) Taxes, social security contributions, or the withholding or nonwithholding of taxes or social security contributions, whether arising from or independently of such contract. (b) In the case of subcontracts, when loans are made for the purpose of financing performance of subcontracts under DOE prime contracts, financing institutions (or the Government as guarantor in those instances in which such loans are guaranteed) should not be required to incur risks of loss by reason of possible diversion of assigned subcontract proceeds for payment of other claims of the prime contractor against the borrower, otherwise unrelated to the assigned subcontracts. Heads of Procuring Activities shall require the adoption of these policies and practices by DOE prime contractors with respect to DOE subcontract work. Heads of Procuring Activities should inform the Controller of each DOE contractor who is unwilling to adopt policies consistent with this paragraph and the reasons given in support of the contractor's position.

§9-30.703 Contract clause-assignment of claims.

The last two sentences of paragraph (a) of the clause in FPR 1–30.703 shall be deleted in all contracts for transportation services.

89-30.708 Examination of assignment.

(a) In classified contracts, the assignee should ordinarily be furnished, upon request, with the following information, as applicable, in lieu of a copy of the contract:

(1) Name and address of the DOE prime contractor;

(2) Prime contract number and date;

(3) DOE office and address receiving the material or service;

(4) Subcontract number or purchase order number;

(5) Date of the subcontract or purchase order;

(6) Date on which prime contract, subcontract, or purchase order is to be completed;

(7) Total amount of the subcontract or purchase order;

(8) Dollar amount remaining to be delivered on prime contract, subcontract, or purchase order; and