3807-Contract Financing

Question 1

What is the most preferred method of contract financing?

Answer 1

Performance

Question 2

Why are performance based payments preferred over progress based payments?

Answer 2

Progress payments are administratively burdensome!

Using performance-based payments should result in lower administrative costs than progress payments based on cost

Question 3

What are the required customary progress payment NTE rates for DoD contracts, including contracts that contain foreign military sales (FMS)?

Answer 3

80 percent for large businesses
90 percent for small businesses
95 percent for small and disadvantaged businesses