DoD Proposes New Rule on Performance-Based Contract Payments

The Department of Defense has proposed a new rule to address the use of performance-based payments in contracts, Federal News Network reported Tuesday.

According to the report, the proposed rule would subject all fixed-price contracts to performance-based payments to help companies manage their cash flow and reduce compliance and oversight costs. DoD proposed the policy as an amendment to the Defense Federal Acquisition Regulation Supplement to comply with a provision of the fiscal 2017 National Defense Authorization Act

“This rulemaking proposes to remove the DFARS restrictions that limit performance-based payments to amounts not greater than costs incurred up to the time of payment,” according to the Defense Acquisition Regulations System. Comments on the proposed rule will be accepted through July 1.

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