Advocacy’s r3 initiative gained ground with the Federal Acquisition Regulation (FAR) Council “Payments Under Fixed-Price Architecture and Engineering Contracts” (A&E) proposed rule.
Cureently, FAR 52.232-10 mandates that contracting officers withhold 10 percent of the amounts due on each voucher. The government retains the withhold amount until the contracting officer determines that the work has been satisfactorily completed.
The revisions permit contracting officers to use their judgment to determine the amount of payment to withhold to protect the government’s interests rather than automatically withholding 10 percent of each voucher.
The proposed rule clarifies that the contractor will be paid any unpaid balance due at the successful completion of the design work.
The retainage rule now must be finalized by the FAR Council. Advocacy hopes the FAR Council will quickly act to finalize this rule.
Advocacy has submitted a comment letter to the FAR Council commending them on their response to the small business community’s concerns as expressed through the r3 initiative. The letter also proposes further reforms of the rule as suggested by small businesses during a meeting with the FAR Council earlier this year.
— Major Clark, Assistant Chief Counsel