Today, the Principal Director, Defense Pricing and Contracting issued Class Deviation, 2020-O0010, Revision 2, Progress Payment Rates.
The issuance reflects the Department's decision regarding a temporary increase to customary progress payment rates issued on March 20, 2020, shortly after the Presidential declaration of a National Emergency due to COVID-19. The March 2020 document increased the progress payment rate for large business concerns from 80% to 90% and the small business progress payment rate from 90% to 95%.
The Department decided to:
- maintain, for now, the temporary 95% rate for small businesses; and
- revert the progress payment rate for large business concerns to 80%, the pre-COVID rate.
To minimize disruption to the defense industrial base, the reversion to pre-COVID rates for large businesses will apply prospectively for new contracts; it becomes effective in solicitations for contracts issued on or after July 7, 2023, and resulting contracts.
Existing contracts, task orders, and delivery orders with large business contractors will retain the higher 90% rate for the life of a given contract.
