## Change Request Number: 01-03 Date Received: 10/23/00

**Title: Paid Cost Clauses (clause change 18)**

# NAME: Yvonne Joseph

BRANCH: ASU-140

PHONE: 267-8638

TYPE OF CHANGE REQUEST: Guidance

DESCRIPTION OF REQUEST: Revise Progressive Payments clause, and
Performance Based Payments clause.

REASON FOR CHANGE: Outdated material in the clauses.

EXTENT OF DEVELOPMENT & REVIEW: ASU-300 and AGC.

TARGET AUDIENCE: Contracts personnel.

APPROVAL LEVELS OBTAINED: ASU-300 and AGC.

BUDGET IMPACT: Unknown

POTENTIAL FAST LINKS: N/A

ATTACHMENTS: Language of change.

### Briefing Planned: No

**ASAG Responsibilities: None**

**\`**

**FAA Acquisition Management System Clauses**

**Change 18 -- November 2000**

This document transmits revisions, additions, and deletions to FAA
Acquisition Management System clauses and provisions. Unless otherwise
specified, these changes are effective

[November 1, 2000]{.underline} and apply to all screening information
requests and contracts issued after [November 1, 2000.]{.underline}

Revised or added clauses and provisions are denoted by November in the
title of the clause or

provision.

**A. [CLAUSES REVISED]{.underline}**

The following summarize clause revisions:

[3.3.1-31, Progress Payments]{.underline} is revised to eliminate prior
\"paid-cost\" requirements.

**B. [CLAUSES ADDED]{.underline}**

[3.3.1-32, Performance Based Payments is added to provide an additional
form of contractor financing based upon performance rather than
acceptance.]{.underline}

**C. [CLAUSES REMOVED]{.underline}**

**D. [PRESCRIPTIONS CHANGED/DELETED]{.underline}**

[3.3.1-32, Performance Based Payments is added in relation to the newly
added clause.]{.underline}

**[E. DISPOSITION OF THIS CHANGE]{.underline}**

The following clauses are deleted in their entirety and the attached
revised or added clauses are substituted:

**Delete** **Replace with**

[Clause]{.underline} [Dated]{.underline} [Clause]{.underline}
[Dated]{.underline}

3.3.1-31 **XXXXXXX** 3.3.1-31 November 2000

\-\-- \-\-- 3.3.1-32 November 2000

**F. [ATTACHMENT]{.underline}**

Thefollowing revised/added clauses are attached to this change.

31. Progress Payment

32. Performance Based Payments

3.3.1-31 Progress Payments

**3.3.1-31** **PROGRESS PAYMENTS** (November 2000)

Progress payments shall be made to the Contractor when requested as work
progresses, but not more frequently than monthly in amounts approved by
the Contracting Officer, under the following conditions:

\(a\) Computation of amounts.

\(1\) Unless the Contractor requests a smaller amount, each progress
payment shall be computed as:

\(i\) 80 percent of the Contractor\'s cumulative total costs under this
contract, whether or not actually paid plus financing payments to
subcontractors (see paragraph (j)), as shown by records maintained by
the Contractor for the purpose of obtaining payment under Government
contracts, plus

\(ii\) progress or financing payments to subcontractors (see paragraph
(j) below), all less the sum of all previous progress payments made by
the Government under this contract.

\(iii\) Cost of money is allowable subject to the requirements of clause
3.3.2-1, \"FAA Cost Principles\".

\(2\) The following conditions apply to the timing of including costs in
progress payment requests:

\(i\) The costs of supplies and services purchased by the Contractor
from subcontractors directly for this contract may be included whether
or not actually paid.

\(ii\) Costs for the following may be included when incurred, even if
before payment, when the Contractor is not delinquent in payment of the
costs of contract performance in the ordinary course of business: In
support of this, the Contractor shall include a certification in its
request for progress payment indicating that it is not delinquent in
payment of costs of contract performance in the ordinary course of
business.

\(A\) Materials issued from the Contractor\'s stores and placed in the
production process for use on this contract.

\(B\) Direct labor, direct travel, and other direct in-house costs.

\(C\) Properly allocable and allowable indirect costs.

\(iii\) Accrued costs of Contractor contributions under employee pension
or other postretirement benefit, profit sharing, and stock ownership
plans shall be excluded until actually paid unless\-\--

\(A\) The Contractor\'s practice is to contribute to the plans quarterly
or more frequently; and

\(B\) The contribution does not remain unpaid 30 days after the end of
the applicable quarter or shorter payment period (any contributions
remaining unpaid shall be excluded from the Contractor\'s total costs
for progress payments until paid).

\(iv\) If the contract is subject to the special transition method
authorized in Cost Accounting Standard (CAS) 410, Allocation of Business
Unit General and Administrative Expense to Final Cost Objective, General
and Administrative expenses (G&A) shall not be included in progress
payment requests until the suspense account prescribed in CAS 410 is
less than\--

\(A\) Five million dollars; or

\(B\) The value of the work-in-process inventories under contracts
entered into after the suspense account was established (only a pro rata
share of the G&A allocable to the excess of the inventory over the
suspense account value is includable in progress payment requests under
this contract).

\(3\) The Contractor shall not include the following in total costs for
progress payment purposes in subparagraph (a)(1)(i) above:

\(i\) Costs that are not reasonable, allocable to this contract, and
consistent with sound and generally accepted accounting principles and
practices.

\(ii\) Costs incurred by subcontractors or suppliers.

\(iii\) Costs ordinarily capitalized and subject to depreciation or
amortization except for the properly depreciated or amortized portion of
such costs.

\(iv\) Payments made or amounts payable to subcontractors or suppliers,
except for\--

\(A\) Completed work, including partial deliveries, to which the
Contractor has acquired title; and

\(B\) Work under cost-reimbursement or time-and-material subcontracts to
which the Contractor has acquired title.

\(4\) The amount of unliquidated progress payments may exceed neither
(i) the progress payments made against incomplete work (including
allowable unliquidated progress payments to subcontractors) nor (ii) the
value, for progress payment purposes, of the incomplete work. Incomplete
work shall be considered to be the supplies and services required by
this contract, for which delivery and invoicing by the Contractor and
acceptance by the Government are incomplete.

\(5\) The total amount of progress payments shall not exceed 80 percent
of the total contract price.

\(6\) If a progress payment or the unliquidated progress payments exceed
the amounts permitted by subparagraphs (a)(4) or (a)(5) above, the
Contractor shall repay the amount of such excess to the Government on
demand subject to \[*CO to insert appropriate interest rate\]*
calculated from the time the excess payment was received by the
contractor until such time as the reimbursement is received by the
Government

\(b\) Liquidation. Except as provided in termination clauses of the
contract, all progress payments shall be liquidated by deducting from
any payment under this contract, other than advance or progress
payments, the unliquidated progress payments, or 80 percent of the
amount invoiced, whichever is less. The Contractor shall repay to the
Government any amounts required by a retroactive price reduction, after
computing liquidations and payments on past invoices at the reduced
prices and adjusting the unliquidated progress payments accordingly. The
Government reserves the right to unilaterally change from the ordinary
liquidation rate to an alternate rate when deemed appropriate for proper
contract financing.

\(c\) Reduction or suspension. The Contracting Officer may reduce or
suspend progress payments, increase the rate of liquidation, or take a
combination of these actions, after finding on substantial evidence any
of the following conditions:

\(1\) The Contractor failed to comply with any material requirement of
this contract (which includes paragraphs (f) and (g) below).

\(2\) Performance of this contract is endangered by the Contractor\'s
(i) failure to make progress or (ii) unsatisfactory financial condition.

\(3\) Inventory allocated to this contract substantially exceeds
reasonable requirements.

\(4\) The Contractor is delinquent in payment of the costs of performing
this contract in the ordinary course of business.

\(5\) The unliquidated progress payments exceed the fair value of the
work accomplished on the undelivered portion of this contract.

\(6\) The Contractor is realizing less profit than that reflected in the
establishment of any alternate liquidation rate in paragraph (b) above,
and that rate is less than the progress payment rate stated in
subparagraph (a)(1) above.

\(d\) Title.

\(1\) Title to the property described in this paragraph (d) shall vest
in the Government. Vestiture shall be immediately upon the date of this
contract, for property acquired or produced before that date. Otherwise,
vestiture shall occur when the property is or should have been allocable
or properly chargeable to this contract.

\' (2) Property,\' as used in this clause, includes all of the
below-described items acquired or produced by the Contractor that are or
should be allocable or properly chargeable to this contract under sound
and generally accepted accounting principles and practices.

\(i\) Parts, materials, inventories, and work in process;

\(ii\) Special tooling and special test equipment to which the
Government is to acquire title under any other clause of this contract;

\(iii\) Nondurable (i.e., noncapital) tools, jigs, dies, fixtures,
molds, patterns, taps, gauges, test equipment, and other similar
manufacturing aids, title to which would not be obtained as special
tooling under subparagraph (ii) above; and

\(iv\) Drawings and technical data, to the extent the Contractor or
subcontractors are required to deliver them to the Government by other
clauses of this contract.

\(3\) Although title to property is in the Government under this clause,
other applicable clauses of this contract; e.g., the termination or
special tooling clauses, shall determine the handling and disposition of
the property.

\(4\) The Contractor may sell any scrap resulting from production under
this contract without requesting the Contracting Officer\'s approval,
but the proceeds shall be credited against the costs of performance.

\(5\) To acquire for its own use or dispose of property to which title
is vested in the Government under this clause, the Contractor must
obtain the Contracting Officer\'s advance approval of the action and the
terms. The Contractor shall (i) exclude the allocable costs of the
property from the costs of contract performance, and (ii) repay to the
Government any amount of unliquidated progress payments allocable to the
property. Repayment may be by cash or credit memorandum.

\(6\) When the Contractor completes all of the obligations under this
contract, including liquidation of all progress payments, title shall
vest in the Contractor for all property (or the proceeds thereof) not---

\(i\) Delivered to, and accepted by, the Government under this contract;
or

\(ii\) Incorporated in supplies delivered to, and accepted by, the
Government under this contract and to which title is vested in the
Government under this clause.

\(7\) The terms of this contract concerning liability for
Government-furnished property shall not apply to property to which the
Government acquired title solely under this clause.

\(e\) Risk of loss. Before delivery to and acceptance by the Government,
the Contractor shall bear the risk of loss for property, the title to
which vests in the Government under this clause, except to the extent
the Government expressly assumes the risk. The Contractor shall repay
the Government an amount equal to the unliquidated progress payments
that are based on costs allocable to property that is damaged, lost,
stolen, or destroyed.

\(f\) Control of costs and property. The Contractor shall maintain an
accounting system and controls adequate for the proper administration of
this clause.

\(g\) Reports and access to records. The Contractor shall promptly
furnish reports, certificates, financial statements, and other pertinent
information reasonably requested by the Contracting Officer for the
administration of this clause. Also, the Contractor shall give the
Government reasonable opportunity to examine and verify the
Contractor\'s books, records, and accounts.

\(h\) Special terms regarding default. If this contract is terminated
under the contract default clause,

\(1\) The Contractor shall, on demand, repay to the Government the
amount of unliquidated progress payments and

\(2\) Title shall vest in the Contractor, on full liquidation of
progress payments, for all property for which the Government elects not
to require delivery under the contract default clause. The Government
shall be liable for no payment except as provided by the contract
default clause.

(i) Reservations of rights.

\(1\) No payment or vesting of title under this clause shall

\(i\) excuse the Contractor from performance of obligations under this
contract or

\(ii\) constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The Government\'s rights and remedies under this clause

\(i\) shall not be exclusive but rather shall be in addition to any
other rights and remedies provided by law or this contract and

\(ii\) shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
Government.

\(j\) Finance payments to subcontractors. The amounts mentioned in
(a)(1)(ii) above shall be all financing payments to subcontractors or
divisions, if the following conditions are met:

\(1\) The amounts included are limited to (i) the unliquidated remainder
of progress payments made plus (ii) for small business concerns any
unpaid subcontractor requests for progress payments that the Contractor
has approved for current payment in the ordinary course of business.

\(2\) The subcontract or interdivisional order is expected to involve a
minimum of approximately 6 months between the beginning of work and the
first delivery, or, if the subcontractor is a small business concern, 4
months.

\(3\) If the financing payments are in the form of progress payments,
the terms of the subcontract or interdivisional order concerning
progress payments\--

\(i\) Are substantially similar to the terms of this clause at 3.3.1-31,
Progress Payments, for any subcontractor that is a large business
concern;

\(ii\) Are at least as favorable to the Government as the terms of this
clause;

\(iii\) Are not more favorable to the subcontractor or division than the
terms of this clause are to the Contractor;

\(iv\) Shall indicate that the Contractor, and not the Government,
awards the subcontract and administers the progress payments. (v)
Subordinate all subcontractor rights concerning property to which the
Government has title under the subcontract to the Government\'s right to
require delivery of the property to the Government for valid reasons not
limited to (A) default of the Contractor, or (B) bankrupcy or or
insolvency of the subcontractor.

\(4\) If the financing payments are in the form of performance-based
payments, the terms of the subcontract or interdivisional order
concerning payments\--

\(i\) Are substantially similar to clause 3.3.1-32 -Performance-Based
Payments;

\(ii\) Subordinate all subcontractor rights concerning property to which
the Government has title under the subcontract to the Government\'s
right to require delivery of the property to the Government for valid
reasons, not limited to \--

> \(A\) the default of the Contractor; or
>
> \(B\) The bankruptcy or insolvency of the subcontractor.

\(5\) If the financing payments are in the form of commercial item
financing payments, the subcontract or interdivisional order concerning
payments subordinates all subcontractor rights concerning property to
which the Government has title under the subcontract to the
Government\'s right to require delivery of the property to the
Government if\--

\(i\) The Contractor defaults; or

\(ii\) The subcontractor becomes bankrupt or insolvent.

\(6\) The progress payment rate in the subcontract is 80% unless the
subcontractor specifies a lesser amount. If the subcontractor is a small
business concern, the progress payment rate may be up to 85%.

\(7\) The parties agree concerning any proceeds received by the
Government for property to which title has vested in the Government
under the subcontract terms, that the proceeds shall be applied to
reducing any unliquidated progress payments by the Government to the
Contractor under this contract.

\(8\) If no unliquidated progress payments to the Contractor remain, but
there are unliquidated progress payments that the Contractor has made to
any subcontractor, the Contractor shall be subrogated to all the rights
the Government obtained through the terms required by this clause to be
in any subcontract, as if all such rights had been assigned and
transferred to the Contractor.

\(9\) The Contractor shall pay the subcontractor\'s progress payment
request under subdivision (j)(1)(ii) above, within a reasonable time
after receiving the Government progress payment covering those amounts.

\(10\) To facilitate small business participation in subcontracting
under this contract, the Contractor agrees to provide progress payments
to small business concerns of up to 85%. The Contractor further agrees
that the need for such progress payments shall not be considered as a
handicap or adverse factor in the award of subcontracts.

(k) Limitations on Undefinitized Contract Actions.

> Notwithstanding any other progress payment provisions in this
> contract, progress payments may not exceed 80 percent of costs
> incurred on work accomplished under undefinitized contract actions. A
> contract action\' is any action resulting in a contract, including
> contract modifications for additional supplies or services, but not
> including contract modifications that are within the scope and under
> the terms of the contract, such as contract modifications issued
> pursuant to the Changes clause, or funding and other administrative
> changes. This limitation shall apply to the costs incurred, as
> computed in accordance with paragraph (a) of this clause, and shall
> remain in effect until the contract action is definitized. Costs
> incurred which are subject to this limitation shall be segregated on
> Contractor progress payment requests and invoices from those costs
> eligible for higher progress payment rates. For purposes of progress
> payment liquidation, as described in paragraph (b) of this clause,
> progress payments for undefinitized contract actions shall be
> liquidated at 80 percent of the amount invoiced for work performed
> under the undefinitized contract action as long as the contract action
> remains undefinitized. The amount of unliquidated progress payments
> for undefinitized contract actions shall not exceed 80 percent of the
> maximum liability of the Government under the undefinitized contract
> action or such lower limit specified elsewhere in the contract.
> Separate limits may be specified for separate actions.

**(**End of clause)

3.3.1-32 Performance Based Payments

PERFORMANCE BASED PAYMENTS (November 2000)

\(a\) *Amount of payments and limitations on payments*. Subject to such
other limitations and conditions as are specified in this contract and
this clause, the amount of payments and limitations on payments shall be
specified in the contract\'s description of the basis for payment.

\(b\) *Contractor request for performance-based payment*. The Contractor
may submit requests for payment of performance-based payments not more
frequently than monthly, in a form and manner acceptable to the
Contracting Officer. Unless otherwise authorized by the Contracting
Officer, all performance-based payments in any period for which payment
is being requested shall be included in a single request, appropriately
itemized and totaled. The Contractor\'s request shall contain the
information and certification detailed in paragraphs (l) and (m) of this
clause.

\(c\) *Approval and payment of requests*. (1) The Contractor shall not
be entitled to payment of a request for performance-based payment prior
to successful accomplishment of the event or performance criterion for
which payment is requested. The Contracting Officer shall determine
whether the event or performance criterion for which payment is
requested has been successfully accomplished in accordance with the
terms of the contract. The Contracting Officer may, at any time, require
the Contractor to substantiate the successful performance of any event
or performance criterion which has been or is represented as being
payable.

\(2\) A payment under this performance-based payment clause is a
contract financing payment under the Prompt Payment clause of this
contract, and approved requests shall be paid in accordance with the
prompt payment period and provisions specified for contract financing
payments by that clause. However, if the Contracting Officer requires
substantiation as provided in paragraph (c)(1) of this clause, or
inquires into the status of an event or performance criterion, or into
any of the conditions listed in paragraph (e) of this clause, or into
the Contractor certification, payment is not required, and the prompt
payment period shall not begin until the Contracting Officer approves
the request.

\(3\) The approval by the Contracting Officer of a request for
performance-based payment does not constitute an acceptance by the
Government and does not excuse the Contractor from performance of
obligations under this contract.

\(d\) *Liquidation of performance-based payments*. (1) Performance-based
finance amounts paid prior to payment for delivery of an item shall be
liquidated by deducting a percentage or a designated dollar amount from
the delivery payment. If the performance-based finance payments are on a
delivery item basis, the liquidation amount for each such line item
shall be the percent of that delivery item price that was previously
paid under performance-based finance payments or the designated dollar
amount. If the performance-based finance payments are on a whole
contract basis, liquidation shall be by either predesignated liquidation
amounts or a liquidation percentage.

\(2\) If at any time the amount of payments under this contract exceeds
any limitation in this contract, the Contractor shall repay to the
Government the excess. Unless otherwise determined by the Contracting
Officer, such excess shall be credited as a reduction in the
unliquidated performance-based payment balance(s), after adjustment of
invoice payments and balances for any retroactive price adjustments.

\(e\) *Reduction or suspension of performance-based payments*. The
Contracting Officer may reduce or suspend performance-based payments,
liquidate performance-based payments by deduction from any payment under
the contract, or take a combination of these actions after finding upon
substantial evidence any of the following conditions:

\(1\) The Contractor failed to comply with any material requirement of
this contract (which includes paragraphs (h) and (i) of this clause).

\(2\) Performance of this contract is endangered by the Contractor\'s\--

\(i\) Failure to make progress; or

\(ii\) Unsatisfactory financial condition.

\(3\) The Contractor is delinquent in payment of any subcontractor or
supplier under this contract in the ordinary course of business.

\(f\) *Title*. (1) Title to the property described in this paragraph (f)
shall vest in the Government. Vestiture shall be immediately upon the
date of the first performance-based payment under this contract, for
property acquired or produced before that date. Otherwise, vestiture
shall occur when the property is or should have been allocable or
properly chargeable to this contract

\(2\) \"Property,\" as used in this clause, includes all of the
following described items acquired or produced by the Contractor that
are or should be allocable or properly chargeable to this contract under
sound and generally accepted accounting principles and practices:

\(i\) Parts, materials, inventories, and work in process;

\(ii\) Special tooling and special test equipment to which the
Government is to acquire title under any other clause of this contract;

\(iii\) Nondurable (*i.e*., noncapital) tools, jigs, dies, fixtures,
molds, patterns, taps, gauges, test equipment and other similar
manufacturing aids, title to which would not be obtained as special
tooling under subparagraph (f)(2)(ii) of this clause; and

\(iv\) Drawings and technical data, to the extent the Contractor or
subcontractors are required to deliver them to the Government by other
clauses of this contract.

\(3\) Although title to property is in the Government under this clause,
other applicable clauses of this contract (*e.g*., the termination or
special tooling clauses) shall determine the handling and disposition of
the property.

\(4\) The Contractor may sell any scrap resulting from production under
this contract, without requesting the Contracting Officer\'s approval,
provided that any significant reduction in the value of the property to
which the Government has title under this clause is reported in writing
to the Contracting Officer. The contractor shall credit the proceeds
against the cost of performance.

\(5\) In order to acquire for its own use or dispose of property to
which title is vested in the Government under this clause, the
Contractor must obtain the Contracting Officer\'s advance approval of
the action and the terms. If approved, the contractor shall exclude the
allocable costs of the property from the costs of contract performance,
and repay to the Government any amount of unliquidated payments
allocable to the property.

\(6\) When the Contractor completes all of the obligations under this
contract, including liquidation of all performance-based payments, title
shall vest in the Contractor for all property (or the proceeds thereof)
not\--

\(i\) Delivered to, and accepted by, the Government under this contract;
or

\(ii\) Incorporated in supplies delivered to, and accepted by, the
Government under this contract and to which title is vested in the
Government under this clause.

\(7\) The terms of this contract concerning liability for
Government-furnished property shall not apply to property to which the
Government acquired title solely under this clause.

\(g\) *Risk of loss*. Before delivery to and acceptance by the
Government, the Contractor shall bear the risk of loss for property, the
title to which vests in the Government under this clause, except to the
extent the Government expressly assumes the risk. If any property is
damaged, lost, stolen, or destroyed, the basis of payment (the events or
performance criteria) to which the property is related shall be deemed
to be not in compliance with the terms of the contract and not payable
(if the property is part of or needed for performance), and the
Contractor shall refund the related performance-based payments in
accordance with paragraph (d) of this clause.

\(h\) *Records and controls*. The Contractor shall maintain records and
controls adequate for administration of this clause. The Contractor
shall have no entitlement to performance-based payments during any time
the Contractor\'s records or controls are determined by the Contracting
Officer to be inadequate for administration of this clause.

\(i\) *Reports and Government access*. The Contractor shall promptly
furnish reports, certificates, financial statements, and other pertinent
information requested by the Contracting Officer for the administration
of this clause and to determine that an event or other criterion
prompting a financing payment has been successfully accomplished. The
Contractor shall give the Government reasonable opportunity to examine
and verify the Contractor\'s records and to examine and verify the
Contractor\'s performance of this contract for administration of this
clause.

\(j\) *Special terms regarding default*. If this contract is terminated
under the default provisions of any termination clause, (1) the
Contractor shall, on demand, repay to the Government the amount of
unliquidated performance-based payments, and (2) title shall vest in the
Contractor, on full liquidation of all performance-based payments, for
all property for which the Government elects not to require delivery
under the Default clause of this contract. The Government shall be
liable for no payment except as provided by the Default clause.

\(k\) *Reservation of rights*. (1) No payment or vesting of title under
this clause shall\--

\(i\) Excuse the Contractor from performance of obligations under this
contract; or

\(ii\) Constitute a waiver of any of the rights or remedies of the
parties under the contract.

\(2\) The Government\'s rights and remedies under this clause\--

\(i\) Shall not be exclusive, but rather shall be in addition to any
other rights and remedies provided by law or this contract; and

\(ii\) Shall not be affected by delayed, partial, or omitted exercise of
any right, remedy, power, or privilege, nor shall such exercise or any
single exercise preclude or impair any further exercise under this
clause or the exercise of any other right, power, or privilege of the
Government.

\(l\) *Content of Contractor\'s request for performance-based payment*.
The Contractor\'s request for performance-based payment shall contain
the following:

\(1\) The name and address of the Contractor;

\(2\) The date of the request for performance-based payment;

\(3\) The contract number and/or other identifier of the contract or
order under which the request is made;

\(4\) Such information and documentation as is required by the
contract\'s description of the basis for payment; and

\(5\) A certification by a Contractor official authorized to bind the
Contractor, as specified in paragraph (m) of this clause.

\(m\) *Content of Contractor\'s certification*. As required in paragraph
(l)(5) of this clause, the Contractor shall make the following
certification in each request for performance-based payment:

I certify to the best of my knowledge and belief that\--

\(1\) This request for performance-based payment is true and correct;
this request (and attachments) has been prepared from the books and
records of the Contractor, in accordance with the contract and the
instructions of the Contracting Officer;

\(2\) (Except as reported in writing on \_\_\_\_\_\_\_\_\_\_), all
payments to subcontractors and suppliers under this contract have been
paid, or will be paid, currently, when due in the ordinary course of
business;

\(3\) There are no encumbrances (except as reported in writing on
\_\_\_\_\_\_\_\_\_) against the property acquired or produced for, and
allocated or properly chargeable to, the contract which would affect or
impair the Government\'s title;

\(4\) There has been no materially adverse change in the financial
condition of the Contractor since the submission by the Contractor to
the Government of the most recent written information dated
\_\_\_\_\_\_\_\_\_\_\_\_\_; and

\(5\) After the making of this requested performance-based payment, the
amount of all payments for each deliverable item for which
performance-based payments have been requested will not exceed any
limitation in the contract, and the amount of all payments under the
contract will not exceed any limitation in the contract.

(End of clause)

**END OF CHANGE 18 -- NOVEMBER 2000**