Federal activity overview — Performance-Based Payments
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Performance-based payments (PBPs) are the preferred government financing method, made on the basis of objective, measurable performance events or criteria. Unlike progress payments tied to costs incurred, PBPs are tied to accomplishment of defined milestones or metrics. They incentivize efficient performance rather than cost accumulation and can be structured to provide better cash flow than traditional progress payments.
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Ask about Performance-Based PaymentsCan exceed progress payment cash flow levels when events are well-structured. Payments up to 90% of contract price can be front-loaded to critical early milestones. No requirement to link payment amounts to costs incurred, allowing strategic cash flow optimization.
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Bureauify. (2026). Performance-Based Payments — Federal Contract Intelligence. Bureauify Federal Intelligence. Retrieved , from https://bureauify.com/glossary/performance-based-payments
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