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

FAR 32.1007 Administration and payment of performance-based payments.

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 explains how the contracting officer administers and approves performance-based payments under a contract. It matters because a contractor only gets paid after the specified event or performance criterion is successfully accomplished, and the contracting officer decides what reviews are needed to protect the Government's interests.

Applies to: Contracts using performance-based payments and the contracting officers who administer them

What it requires

  • The contracting officer must review and approve all performance-based payments for the contract.
  • The contracting officer must receive, approve, and transmit all performance-based payment requests to the appropriate payment office, unless otherwise provided by agency regulations or agreement with the payment official.
  • Each approval must specify the amount to be paid, necessary contractual information, and the appropriation account(s) to be charged.
  • The contracting officer must not approve a performance-based payment until the specified event or performance criterion has been successfully accomplished in accordance with the contract.

Key terms: performance-based payments · contracting officer · payment office · appropriation account · Government-caused delay

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

The text

(a) Responsibility. The contracting officer responsible for administering performance-based payments (see 42.302(a)(13)) for the contract shall review and approve all performance-based payments for that contract.

(b) Approval of financing requests. Unless otherwise provided in agency regulations, or by agreement with the appropriate payment official—

(1) The contracting officer shall be responsible for receiving, approving, and transmitting all performance-based payment requests to the appropriate payment office; and

(2) Each approval shall specify the amount to be paid, necessary contractual information, and the appropriation account(s) (see 32.1004(c)) to be charged for the payment.

(c) Reviews. The contracting officer is responsible for determining what reviews are required for protection of the Government's interests. The contracting officer should consider the contractor's experience, performance record, reliability, financial strength, and the adequacy of controls established by the contractor for the administration of performance-based payments. Based upon the risk to the Government, post-payment reviews and verifications should normally be arranged as considered appropriate by the contracting officer. If considered necessary by the contracting officer, pre-payment reviews may be required.

(d) Incomplete performance. The contracting officer shall not approve a performance-based payment until the specified event or performance criterion has been successfully accomplished in accordance with the contract. If an event is cumulative, the contracting officer shall not approve the performance-based payment unless all identified preceding events or criteria are accomplished.

(e) Government-caused delay. Entitlement to a performance-based payment is solely on the basis of successful performance of the specified events or performance criteria. However, if there is a Government-caused delay, the contracting officer may renegotiate the performance-based payment schedule to facilitate contractor billings for any successfully accomplished portions of the delayed event or criterion.

Sections it refers to

← 32.1006 [Reserved] · 32.1008 Suspension or reduction of performance-based payments. →

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 32.1007 Administration and payment of performance-based payments · SpendQuery