Contract Financing: Performance-Based Payments

AGENCY:

Department of Defense (DoD).

ACTION:

Request for public comments.

SUMMARY:

The Director of Defense Procurement and Acquisition Policy (DPAP) is currently conducting an internal assessment regarding the use of performance-based payments as a method of financing for DoD contracts. As part of this assessment, DPAP would like to hear the views of interested parties on what they believe are potential areas for improving DoD's use of performance-based payments.

DATES:

Submit written comments to the address shown below on or before October 25, 2004.

ADDRESSES:

Submit comments to: Office of the Director, Defense Procurement and Acquisition Policy, Policy Directorate, ATTN: Mr. David Capitano, Room 3C838, 3000 Defense Pentagon, Washington, DC 20301-3000. Comments may also be submitted by fax at (703) 614-0719 (ATTN: Mr. David Capitano), or by e-mail at david.capitano@osd.mil.

FOR FURTHER INFORMATION CONTACT:

Mr. David Capitano, DPAP Policy Directorate, by telephone at (703) 847-7486, or by e-mail at david.capitano@osd.mil.

SUPPLEMENTARY INFORMATION:

Government policy is that performance-based payments are the preferred form of contract financing. In furtherance of this policy, the Director of Defense Procurement and Acquisition Policy is soliciting public input regarding actions (policy changes, training, etc.) DoD should undertake to—

1. Increase the use of performance-based payments as the method of contract financing on DoD contracts (e.g., what should be done to increase the number of contracts that utilize performance-based payments); and

2. Improve the efficiency of performance-based payments when used on DoD contracts (e.g., what should be done to improve the use of performance-based payments on those contracts that provide for such contract financing).

It would be helpful, but not required, if respondents could also provide—

1. A brief summary of their experience in using performance-based payments on DoD contracts; and

2. What they believe to be the most important advantages and disadvantages that performance-based payments have with respect to progress payments.