232.1001 - Policy
(a) As with all contract financing, the purpose of performance-based payments is to assist the contractor in the payment of costs incurred during the performance of the contract. See PGI 232.1001 (a) for additional information on use of performance-based payments. However, in accordance with 10 U.S.C. 2307(b)(2), performance-based payments shall not be conditioned upon costs incurred in contract performance, but on the achievement of performance outcomes. Subject to the criteria in 232.1003-70 , all companies, including nontraditional defense contractors, are eligible for performance-based payments, consistent with best commercial practices.
(d) The contracting officer shall use the following standard payment terms for performance-based payments: The contractor entitlement date, if any, specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later.
232.1005-70 - Solicitation provisions and contract clauses
(a) The contracting officer shall include the following clauses with appropriate fill-ins in solicitations and contracts that include performance-based payments:
(1) For performance-based payments made on a whole-contract basis, use the clause at 252.232-7012 , Performance-Based Payments–Whole-Contract Basis.
(2) For performance-based payments made on a deliverable-item basis, use the clause at 252.232-7013 , Performance-Based Payments–Deliverable-Item Basis.
(b) Use the provision at 252.232-7015 , Performance-Based Payments–Representation, in solicitations where the resulting contract may include performance-based payments.
(c) Use the provision at 252.232-7016 , Notice of Progress Payments or Performance-Based Payments, in lieu of FAR 52.232-13, Notice of Progress Payments, when the solicitation contains clauses for progress payments and performance-based payments (only one type of financing will be included in the resultant contract, except as may be authorized on separate orders subject to FAR 32.1003(c)).
232.104 - Providing contract financing
For fixed-price contracts with a period of performance in excess of a year that meet the dollar thresholds established in FAR 32.104(d), and for solicitations expected to result in such contracts, in lieu of the requirement at FAR 32.104(d)(1)(ii) for the contractor to demonstrate actual financial need or the unavailability of private financing, DoD has determined that—
(1) The use of customary contract financing (see FAR 32.113), other than loan guarantees and advance payments, is in DoD’s best interest; and
(2) Further justification of its use in individual acquisitions is unnecessary.