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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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36 sections with “performance-based contracts”

  • FAR 32.504 Subcontracts under prime contracts providing progress payments.
    (a) Subcontracts may include either performance-based payments, provided they meet the criteria in 32.1003, or progress payments, provided they meet the criteria in subpart 32.5 for customary progress payments, but not both. Subcontracts fo…
  • FAR 32.110 Payment of subcontractors under cost-reimbursement prime contracts.
    … 32.202-1 for commercial product or commercial service purchase financing, or 32.1003 for performance-based payments, as applicable. (b) If customary progress payments are made, the payments do not exceed the progress payment rate in 32.50…
  • FAR 32.1001 Policy.
    (a) Performance-based payments are the preferred Government financing method when the contracting officer finds them practical, and the contractor agrees to their use. (b) Performance-based payments are contract financing payments that are…
  • FAR 32.1004 Procedures.
    Performance-based payments may be made either on a whole contract or on a deliverable item basis, unless otherwise prescribed by agency regulations. Financing payments to be made on a whole contract basis are applicable to the entire contra…
  • FAR 32.1005 Solicitation provision and contract clause.
    (a) Insert the clause at 52.232-32, Performance-Based Payments, in— (1) Solicitations that may result in contracts providing for performance-based payments; and (2) Fixed-price contracts under which the Government will provide performance…
  • FAR 37.102 Policy.
    (a) Performance-based acquisition (see Subpart 37.6) is the preferred method for acquiring services (Public Law 106-398, section 821). When acquiring services, including those acquired under supply contracts or orders, agencies must— (1) U…
  • DFARS 215.404-71-3 Contract type risk and working capital adjustment.
    … (1) “No financing” means either that the contract does not provide progress payments or performance-based payments, or that the contract provides them only on a limited basis, such as financing of first articles. Do not compute a working …
  • DFARS 232.1004 Procedures.
    (b) Establishing performance-based finance payment amounts. (i) The contracting officer should include in a solicitation both the progress payments and performance-based payments provisions and clauses prescribed in this part, when consider…
  • DFARS 232.1005-70 Solicitation provisions and contract clauses.
    …e following clauses with appropriate fill-ins in solicitations and contracts that include performance-based payments: (1) For performance-based payments made on a whole-contract basis, use the clause at 252.232-7012, Performance-Based Paym…
  • DFARS 252.242-7005 Contractor business systems.
    …the Contracting Officer will withhold 5 percent of amounts due from progress payments and performance-based payments, and direct the Contractor, in writing, to withhold 5 percent from its billings on interim cost vouchers on cost-reimbursem…
  • FAR 7.105 Contents of written acquisition plans.
    …ition plans for service contracts or orders must describe the strategies for implementing performance-based acquisition methods or must provide rationale for not using those methods (see subpart 37.6). (a) Acquisition background and object…
  • DFARS 242.7000 Contractor business system deficiencies.
    …f payment withholding under 252.242-7005 does not exceed 10 percent of progress payments, performance-based payments, and interim payments under cost-reimbursement, labor-hour, and time-and-materials contracts billed under each of the ident…
  • FAR 32.113 Customary contract financing.
    …t 15, through either progress payments based on costs in accordance with subpart 32.5, or performance-based payments in accordance with subpart 32.10 (but not both). (e) Financing of contracts for supplies or services awarded under a sole-…
  • FAR 37.601 General.
    …y use either a performance work statement or a statement of objectives (see 37.602). (b) Performance-based contracts for services shall include— (1) A performance work statement (PWS); (2) Measurable performance standards (i.e., in terms…
  • FAR 52.232-16 Progress Payments.
    …ntractor becomes bankrupt or insolvent. (4) If the financing payments are in the form of performance-based payments, the terms of the subcontract or interdivisional order concerning payments— (i) Are substantially similar to the Performan…
  • FAR 2.101 Definitions.
    … or contractor's performance on active and physically completed contracts (see 4.804-4). Performance-based acquisition (PBA) means an acquisition structured around the results to be achieved as opposed to the manner by which the work is to…
  • FAR 8.405-2 Ordering procedures for services requiring a statement of work.
    …avel, special knowledge). To the maximum extent practicable, agency requirements shall be performance-based statements (see subpart 37.6). (c) Request for Quotation procedures. The ordering activity must provide the request for quotation (…
  • FAR 32.102 Description of contract financing methods.
    …ted by the Government; (3) Partial payments for a contract termination proposal; or (4) Performance-based payments. (c) Loan guarantees are made by Federal Reserve banks, on behalf of designated guaranteeing agencies, to enable contracto…
  • FAR 32.1003 Criteria for use.
    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 ite…
  • FAR 37.000 Scope of part.
    …ess of the contract type or kind of service being acquired. This part requires the use of performance-based acquisitions for services to the maximum extent practicable and prescribes policies and procedures for use of performance-based acqu…
  • FAR 7.103 Agency-head responsibilities.
    …d to further refine requirements and acquisition strategies. For services, greater use of performance-based acquisition methods should occur for follow-on acquisitions. (u) Ensuring that acquisition planners, to the maximum extent practica…
  • FAR 8.405-3 Blanket purchase agreements (BPAs).
    …, and special knowledge). To the maximum extent practicable, agency requirements shall be performance-based statements (see subpart 37.6). (ii) Type-of-order preference. The ordering activity shall specify the order type (i.e., firm-fixed …
  • FAR 16.505 Ordering.
    …d within the period of performance, and be within the maximum value of the contract. (3) Performance-based acquisition methods must be used to the maximum extent practicable, if the contract or order is for services (see 37.102(a) and subp…
  • FAR 32.000 Scope of part.
    …clauses; (g) Financing of purchases of commercial products and commercial services; (h) Performance-based payments; and (i) Electronic funds transfer payments.
  • FAR 32.001 Definitions.
    …by the Government. (1) Contract financing payments include— (i) Advance payments; (ii) Performance-based payments; (iii) Commercial advance and interim payments; (iv) Progress payments based on cost under the clause at 52.232-16, Progr…
  • FAR 32.006-1 General.
    …raud. This authority does not apply to commercial interim payments under subpart 32.2, or performance-based payments under subpart 32.10. (c) The agency head may not delegate his or her responsibilities under these statutes below Level IV …
  • FAR 32.104 Providing contract financing.
    … agency procedures, the contracting officer may provide contract financing in the form of performance-based payments (see subpart 32.10) or customary progress payments (see subpart 32.5) if the following conditions are met: (1) The contrac…
  • FAR 32.601 General.
    …faults in performance. (10) Breach of contract obligations concerning progress payments, performance-based payments, advance payments, financing of commercial products or commercial services, or Government-furnished property. (11) Governm…
  • FAR 37.101 Definitions.
    …nd control usually prevailing in relationships between the Government and its employees. Performance-based contracting means structuring all aspects of an acquisition around the purpose of the work to be performed as opposed to either the …
  • FAR 37.103 Contracting officer responsibility.
    …contracts are exempt from the requirements of subparagraph (a)(3) above. (c) Ensure that performance-based acquisition methods are used to the maximum extent practicable when acquiring services. (d) Ensure that contracts for child care se…
  • FAR 42.302 Contract administration functions.
    …prove or disapprove the contractor's requests for payments under the progress payments or performance-based payments clauses. (14) Make payments on assigned contracts when prescribed in agency acquisition regulations. (15) Manage special …
  • FAR 45.600 Scope of subpart.
    … for which the Government has a lien or title solely as a result of advance, progress, or performance-based payments that have been liquidated.
  • DFARS 207.106 Additional requirements for major systems.
    …or subsystem; and (v) Apply to weapon systems and subsystems that are to be supported by performance-based logistics arrangements as well as to weapon systems and subsystems that are to be supported by other sustainment approaches. (S-71)…
  • DFARS 232.007 Contract financing payments.
    …icer shall insert the standard due dates of 7 days for progress payments, and 14 days for performance-based payments and interim payments on cost-type contracts, in the appropriate paragraphs of the respective payment clauses. For interim p…
  • DFARS 232.102 Description of contract financing methods.
    …entage or state of completion methods of measuring contractor performance may be used for performance-based payments in accordance with FAR Subpart 32.10.
  • DFARS 252.232-7003 Electronic Submission of Payment Requests and Receiving Reports.
    …by the Government. (1) Contract financing payments include— (i) Advance payments; (ii) Performance-based payments; (iii) Commercial advance and interim payments; (iv) Progress payments based on cost under the clause at Federal Acquisit…

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.