§ 3802. Payment

• (a) Whenever practicable, payments under section 3801 of this title shall be made using performance-based payments on any of the following bases:
  • (1) Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls.
  • (2) Accomplishment of events defined in the program management plan.
  • (3) Other quantifiable measures of results.
• (b) Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes listed in subsection (a).
• (c)
  • (1) In order to receive performance-based payments, a contractor’s accounting system shall be in compliance with Generally Accepted Accounting Principles, and there shall be no requirement for a contractor to develop Government-unique accounting systems or practices as a prerequisite for agreeing to receive performance-based payments.
  • (2) Nothing in this chapter shall be construed to grant the Defense Contract Audit Agency the authority to audit compliance with Generally Accepted Accounting Principles.
• (d) Payments made under section 3801 of this title may not exceed the unpaid contract price.
• (e) The Secretary of Defense shall ensure that nontraditional defense contractors and other private sector companies are eligible for performance-based payments, consistent with best commercial practices.