Term -Commercial advance payment

Commercial advance payment means a payment made before any performance of work under the contract. The aggregate of these payments shall not exceed 15 percent of the contract price. These payments are contract financing payments for prompt payment purposes (i.e., not subject to the interest penalty provisions of the Prompt Payment Act in accordance with Subpart 32.9). These payments are not subject to Subpart 32.4, Advance Payments for Non-Commercial Items.

FAR 32.202-2 Types of payments for commercial item purchases. This definition incorporates the requirements of the statutory commercial financing authority and the implementation of the Prompt Payment Act.

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