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Determine Need for Progress or Advance Payment

Usually, the Postal Service pays for supplies and services after delivery or performance. However, for some purchases, sources may be unavailable or competition too limited without the availability of advance payments or progress payments.

Advance Payments

Approval to make advance payments must be obtained as required by Management Instruction FM-610-2003-1, Advance Payments.

Progress Payments

If the dollar value of a prospective contract is within the Contracting Officer's delegated contracting authority, he or she may approve the use of progress payments for the particular contract. For contracts over $1,000,000 (excluding construction, architect/engineer and construction management contracts), progress payments must also be approved by the VP, Finance.

Before approving progress payments, the Contracting Officer must make a written determination establishing that:

Progress payments are in the Postal Service's best interests.

The Supplier's accounting system and controls are adequate for proper administration of progress payments, or their adequacy will be ascertained before contract award.

Monthly progress reports will be obtained from the Supplier, showing progress of the work as related to progress payments made.

Any contract providing for advance payments must include Clause 1-2, Advance Payments. Any contract, other than a construction contract, providing for progress payments must include Clause 1-3, Progress Payments. (For construction contracts, see Clause B-48, Payment (Construction).)

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Other Topics Considered

Conduct Should-Cost Analysis topic, Collect Ideas and Build Fact Base task, Process Step 2: Evaluate Sources

Develop, Finalize, and Implement Cost Management Plan topic, Manage Demand task, Process Step 5: Manage and Measure Supply

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