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Supplying Principles and Practices > USPS Supplying Practices Process Step 2: Evaluate Sources > Determine Need for Progress or Advance Payment
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.
Approval to make advance payments must be obtained as required by
Management Instruction FM-610-2003-1, Advance 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).)
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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