University of California

Office of the President


Senior Vice President—

Business and Finance





Costing Policy & Analysis

Research Administration Office

No. 03-09


November 3 , 2003






Subject:  DOD Advance Payment Pools Ended


Until 1998, the University of California had three Department of Defense (DOD) advanced payment

pools, Air Force, Army, and Navy, which provided payment systems under DOD contracts.  In

1998, the Air Force Advance Payment Pool was closed.  In 1999, the Navy Advance Payment

Pool ended, and last year, in July, 2002, the remaining advance payment pool with the Army

ended.  While these DOD advance payment pools provided the University with payments under

DOD contracts on a more timely basis, they were underutilized as DOD agencies awarded more

grants than contracts.  As a result, they had large cash balances. 


With the termination of these pools, campuses should no longer find or accept the DFARS clause

252.232-7000, Advance Payment Pool, and the related payment clause at 252.232-7001,

Disposition of Payments, in DOD contracts.  However, DOD agencies can still provide

advance payments in their contracts with FAR 52.232-12, Alternate V, Advance Payments

Without Special Bank Account (JUL 1990), when the agency and the campus agree that

advance payments are appropriate. (See Contract and Grant Operating Guidance Memo 91-3




Refer: Samuela A. Evans Subject: 06 Organization: F-175
(510) 987-9849 Cancel: 85-06, 85-07, 92-14, 94-14
  David F. Mears, Director
  Office of Research Administration

Cc:  Barbara Lester, Manager 

       Campus Extramural Funds Managers