---
kind: "section"
citation: "48 C.F.R. § 32.1001"
title: "48"
number: "32.1001"
heading: "Policy."
url: "https://uscodex.org/cfr/48/32.1001"
---

# §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 not payment for accepted items.**
- (c) Performance-based payments are fully recoverable, in the same manner as progress payments, in the event of default.
- (d) Performance-based payments are contract financing payments and, therefore, are not subject to the interest-penalty provisions of prompt payment (see [Subpart 32.9](/cfr/48/subpart32.9.md)). These payments shall be made in accordance with agency policy.
- (e) Performance-based payments shall not be used for—
  - (1) Payments under cost-reimbursement line items;
  - (2) Contracts for architect-engineer services or construction, or for shipbuilding or ship conversion, alteration, or repair, when the contracts provide for progress payments based upon a percentage or stage of completion; or
  - (3) **Contracts awarded through sealed bid procedures.**

## Notes

### Amendments

[72 FR 73220, Dec. 26, 2007]

### Source

Source: 60 FR 49715, Sept. 26, 1995, unless otherwise noted.

### Authority

Authority: 41 U.S.C. 1121(b); 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

### Source

Source: 48 FR 42328, Sept. 19, 1983, unless otherwise noted.

### Amendments

[72 FR 73220, Dec. 26, 2007]