HR 8007 IH1S 
SEC. 3. REVISION OF DEFINITION OF TERM ‘‘COMMERCIAL 
ITEM’’ FOR PURPOSES OF FEDERAL PRO-
CUREMENT STATUTES PROVIDING PROCE-
DURES FOR PROCUREMENT OF COMMERCIAL 
ITEMS. 
(a) ELIMINATION OF ‘‘OF A TYPE’’ CRITERION.— 
Section 103 of title 41, United States Code, is amended 
by striking ‘‘of a type’’ each place it appears. 
(b) ELIMINATION OF ITEMS AND SERVICES MERELY 
OFFERED FOR SALE, LEASE, OR LICENSE.— 
(1) ITEMS.—Section 103(1)(B) of title 41, 
United States Code, is amended by striking ‘‘, or of-
fered for sale, lease, or license,’’. 
(2) SERVICES.—Section 103a(2) of title 41, 
United States Code, is amended by striking ‘‘offered 
and’’. 
SEC. 4. PROGRESS PAYMENT INCENTIVE PILOT. 
(a) PILOT PROGRAM.—The Secretary of Defense, 
acting through the Under Secretary of Defense for Acqui-
sition and Sustainment, shall establish and implement a 
pilot program, to be known as the ‘‘Progress Payment In-
centive Pilot Program’’, to make accelerated progress pay-
ments contingent upon responsiveness to Department of 
Defense goals for effectiveness, efficiency, and increasing 
small business contract opportunities. 
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HR 8007 IH1S 
(b) PURPOSE.—The purpose of the pilot program is 
to reward Department of Defense contractors who meet 
contract delivery dates, respond to Department solicita-
tions for required certified cost or pricing data, meet small 
business contracting goals, and provide subcontracting op-
portunities for AbilityOne contracts. 
(c) PROGRESS PAYMENTS.— 
(1) LIMITATIONS FOR LARGE CONTRACTORS.— 
Except as provided under paragraph (2), under the 
pilot program, the Department of Defense may not 
award to large business contractors progress pay-
ments in excess of 50 percent. 
(2) EXCEPTIONS.—The Department of Defense 
may increase the rate of progress payments, up to 
a total of 95 percent, by the following percentages: 
(A) 10 percent if the relevant division of 
the contractor met contract delivery dates for 
contract end items and contract data require-
ment lists or performance milestone schedule, 
as the case may be, at least 95 percent of the 
time during the preceding Government fiscal 
year. 
(B) 10 percent if the division does not 
have open level III or IV corrective action re-
quests. 
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HR 8007 IH1S 
(C) 7.5 percent if all applicable contractor 
business systems are acceptable, without signifi-
cant deficiencies. 
(D) 10 percent if at least 95 percent of the 
time during the preceding Government fiscal 
year, when responding to solicitations that re-
quired submission of certified cost or pricing 
data, the division met the due date in the re-
quest for proposal. 
(E) 5 percent if the contractor discloses 
first tier subcontractor data, the prime contrac-
tor’s beneficial owners, and total compensation 
for recipient executives. 
(F) 5 percent if the contractor has met its 
small business subcontracting goals during the 
preceding Government fiscal year. 
(G) 3 percent if the contractor has pro-
vided subcontracting opportunities for the blind 
and severely disabled. 
(d) DEFINITIONS.—In this section: 
(1) BENEFICIAL
OWNERS.—The term ‘‘bene-
ficial owner’’ has the meaning given the term in sec-
tion 847 of the National Defense Authorization Act 
for Fiscal Year 2020 (Public Law 116–92; 133 Stat. 
1505; 10 U.S.C. 2509 note). 
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HR 8007 IH1S 
(2) COMPENSATION
FOR
RECIPIENT
EXECU-
TIVES.—The term ‘‘compensation for recipient ex-
ecutives’’ refers to the names and total compensa-
tion of the five most highly compensated officers of 
the entity pursuant to section 2(b)(1) of the Federal 
Funding Accountability and Transparency Act of 
2006 (Public Law 109–282; 31 U.S.C. 6101 note). 
(3) FIRST TIER SUBCONTRACTOR.—The term 
‘‘first tier subcontractor’’ means a subcontractor 
who has a subcontract directly with the prime con-
tractor. 
(4) LARGE DEFENSE CONTRACTOR.—The term 
‘‘large defense contractor’’ means a contractor 
(other than an institute of higher education or a fed-
erally funded research and development center) that 
received more than $10,000,000 in annual revenue 
from the Department of Defense contracts or li-
censes in any of the previous three years. 
(5) 
PROGRESS
PAYMENTS.—The 
term 
‘‘progress payments’’ means payments provided for 
under section 3804 of title 10, United States Code. 
Æ 
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