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                            32.1001 Policy.
        
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FAC Number: 2024-03 Effective Date: 02/23/2024
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Subpart32.032.132.232.332.432.532.632.732.832.932.1032.11
Section32.100032.100132.100232.100332.100432.100532.100632.100732.100832.100932.1010
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32.1001 Policy.32.1001 Policy.       (a) 						            Performance-based payments are the preferred Government financing method when the contracting officer finds them practical, and the contractor agrees to their use.                                          (b) 						            Performance-based payments are contract financing payments that are not payment for accepted items.                                          (c) 						            Performance-based payments are fully recoverable, in the same manner as progress payments, in the event of default.                                          (d) 						            Performance-based payments are contract financing payments and, therefore, are not subject to the interest-penalty provisions of prompt payment (see  subpart  32.9). These payments shall be made in accordance with agency policy.                                          (e) 						            Performance-based payments shall not be used for-                                                         (1) 								                Payments under cost-reimbursement line items;                                                            (2) 								                Contracts for architect-engineer services or construction, or for shipbuilding or ship conversion, alteration, or repair, when the contracts provide for progress payments based upon a percentage or stage of completion; or                                                            (3) 								                Contracts awarded through sealed bid procedures.    **Parent topic:**  Subpart 32.10 - Performance-Based Payments
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