Section 232.1001 - Policy(a) As with all contract financing, the purpose of performance-based payments is to assist the contractor in the payment of costs incurred during the performance of the contract. See PGI 232.1001(a) for additional information on use of performance-based payments. However, in accordance with 10 U.S.C. 3802(a)(2) , performance-based payments shall not be conditioned upon costs incurred in contract performance, but on the achievement of performance outcomes. Subject to the criteria in 232.1003-70, all companies, including nontraditional defense contractors, are eligible for performance-based payments, consistent with best commercial practices.(d) The contracting officer shall use the following standard payment terms for performance-based payments: The contractor entitlement date, if any, specified in the contract, or 14 days after receipt by the designated billing office of a proper request for payment, whichever is later.63 FR 11537, Mar. 9, 1998, as amended at 79 FR 17936 , Mar. 31, 2014; 85 FR 19688 , Apr. 8, 2020; 87 FR 76995 , Dec. 16, 2022 85 FR 19688 , 4/8/2020; 87 FR 76995 , 12/16/2022