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Performance Based Payment Tool

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On September 14, 2010, Dr. Ashton Carter, Under Secretary of Defense for Acquisition, Technology and Logistics, issued a memorandum on the subject of Better Buying Power for the Department. In that memorandum, the Director of Defense Procurement and Acquisition Policy was directed to develop a cash flow model to be used by all contracting officers contemplating financing other than customary progress payments, such as Performance Based Payments (PBP). In addition, guidance was to be developed that ensures that the improved cash flow opportunities provide benefit to both industry (at both the prime and subcontractor level) and the taxpayer.

The tool is at this website:

http://www.acq.osd.mil/dpap/cpf/Performanc...d_payments.html

Has anyone had any experience using this tool, or any thoughts about differences in profit % to expect as a result of using the tool?

Thanks.

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