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This is a very broad question based on some assumptions by me as follows: 1. FAR 52.232-16 and FAR 52.232-32 read essentially the same especially in regards to who owns the residual property once the financing payments have been fully liquidated (paid back); 2. DoD Class Deviation  2019-O0011 (performance-based payments no longer capped by the amount of incurred costs) I can find no reciprocal provision for progress payments; 3.   DoD Class Deviation 2020-O0010 (COVID response) upping the small business to 95% and 90% for large business - again, I can find no similar modification for PBP.

My question is what other differences are there between progress payments versus performance based payments including contract administration requirements. Thanks for your consideration of this question.      

 

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@novice

11 hours ago, novice said:

My question is what other differences are there between progress payments versus performance based payments including contract administration requirements.

Speaking just for myself, you are not clear about what you want to know. Progress payments and performance-based payments are very big topics. Do you want a catalog of differences in concept and an explanation of differences in contract administration?

Too much!

Read FAR Subparts 32.5 and 32.10 and then do a Google search for more information or come back here with more specific and more clearly-worded questions.

If you are asking about construction progress payments, see FAR 52.232-5.

 

 

 

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On 4/10/2021 at 7:53 PM, novice said:

This is a very broad question based on some assumptions by me as follows: 1. FAR 52.232-16 and FAR 52.232-32 read essentially the same especially in regards to who owns the residual property once the financing payments have been fully liquidated (paid back); 2. DoD Class Deviation  2019-O0011 (performance-based payments no longer capped by the amount of incurred costs) I can find no reciprocal provision for progress payments; 3.   DoD Class Deviation 2020-O0010 (COVID response) upping the small business to 95% and 90% for large business - again, I can find no similar modification for PBP.

My question is what other differences are there between progress payments versus performance based payments including contract administration requirements. Thanks for your consideration of this question.      

I hate to step on Vern's toes because he gave you the correct answer if you want to learn about the differences. Some of the stuff you posted (quoted above) indicates you don't really understand the nuances.

Broadly, customary cost-based progress payments are not based on the contractor's ability to make progress; they are based on the contractor's ability to spend money. Whereas performance-based payments (PBPs) are based on the contractor's ability to achieve certain negotiated programmatic billing events.

The billing events are supposed to be technical or other program events that indicate progress is being made toward the desired contractual outcome. The value of the billing events is supposed to be negotiated prior to contract execution. The billing event should be a yes/no thing, where the billing event is either accomplished or not. If yes, then the contractor bills the negotiated value of the event, and there should be no need to perform an audit. On the other hand, progress payments, being based on costs incurred and adjusted for losses (if they exist) are subject to a whole lot of audit.

PPBs don't require an "adequate" accounting system; whereas progress-payments do.

Further, progress payments are tied to a percentage of costs incurred; whereas PBPs are tied to the contract price. The difference between 90% of costs incurred and 90% of the contract price is significant.

There. That's enough. Now please go do the reading Vern suggested.

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