MP5332.3 Loan Guarantees For Defense Production

(1)  When the contracting officer receives an application with supporting data for a guaranteed loan from the Federal Reserve Bank, the contracting officer shall request the cognizant Defense Contract Management Agency (DCMA) office and Defense Contract Audit Agency (DCAA) to analyze the contractor’s financial condition. The request shall include, as a minimum, an examination of the contractor’s balance sheet and operating statement.

(2)  The contracting officer shall give special attention to the classification and evaluation of accounts to ensure that they are in accordance with generally accepted accounting principles with emphasis on accounts receivable, inventories, and deferred charges.

(3)  When applying for a loan guarantee, the contractor must apply to the cognizant Federal Reserve Bank to determine if it is eligible to receive a loan guarantee. Although the burden is on the contractor to apply for a certificate of eligibility, it may also be requested by the Assistant for Accounting and Banking, Office of the Assistant Secretary of the Air Force (Financial Management and Comptroller), SAF/FMPS.

(4)  Requests for certificates of eligibility shall be submitted to SAF/AQCK for evaluation of all supporting data. SAF/AQCK shall provide appropriate comments to the requester of the certificate.