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FAR and DFARS › FAR Part 32: Contract Financing › Subpart 32.10

FAR 32.1003 Criteria for use.

The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.

In plain English

This section lists the conditions under which a contracting officer may use performance-based payments. It matters because it tells contractors when these payments are allowed, such as requiring agreement on terms and a fixed-price type contract or order.

Applies to: Contracting officers using performance-based payments for individual orders and contracts

What it requires

  • The contracting officer and offeror must agree on the performance-based payment terms.
  • The contract, individual order, or line item must be a fixed-price type.
  • For indefinite delivery contracts, the individual order must not provide for progress payments.
  • For other than indefinite delivery contracts, the contract must not provide for progress payments.

Key terms: performance-based payments · contracting officer · offeror · fixed-price type · progress payments

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

The contracting officer may use performance-based payments for individual orders and contracts provided—

(a) The contracting officer and offeror agree on the performance-based payment terms;

(b) The contract, individual order, or line item is a fixed-price type;

(c) For indefinite delivery contracts, the individual order does not provide for progress payments; and

(d) For other than indefinite delivery contracts, the contract does not provide for progress payments.

Sections that refer to it

  • 32.110 Payment of subcontractors under cost-reimbursement prime contracts.
  • 32.504 Subcontracts under prime contracts providing progress payments.
  • 232.1004 Procedures.
  • 232.1005-70 Solicitation provisions and contract clauses.
  • 252.232-7016 Notice of Progress Payments or Performance-Based Payments.

← 32.1002 Bases for performance-based payments. · 32.1004 Procedures. →

Rule changes for FAR Part 32

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 32.1003 Criteria for use · SpendQuery