DOD Ties Progress Payments To Contract Performance

Law360 (April 8, 2020, 7:05 PM EDT) -- The U.S. Department of Defense has issued a rule tying fixed-price contract payments to performance, including several tweaks intended to make it easier for contractors to receive those performance-based payments.

The Defense Federal Acquisition Regulation Supplement rule will link payments on fixed-price deals to "objective, quantifiably measurable" results or events whenever practical, the DOD said in the rule, published in the Federal Register on Wednesday.

"[Performance-based payment] is a preferred method of contracting as it may reduce oversight and compliance costs to the government," the DOD said in an April 2019 proposed version of the rule. "It also has benefits for...

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