Sec. 829. Preference for performance-based contractual payments
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Section 2307(b) of title 10, United States Code, is amended— in the subsection heading, by inserting before Preference for ; performance-based by redesignating paragraphs (1), (2), and
(3)as subparagraphs (A), (B), and (C), respectively; by striking Wherever practicable, payment under subsection
(a)shall be made and inserting
(1)Whenever practicable, payments under subsection
(a)shall be made using performance-based payments ; and by adding at the end the following new paragraphs: Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of milestones or events based on the performance outcomes listed in paragraph (1). The Secretary of Defense shall ensure that non-traditional contractors and commercial companies shall be eligible for performance based payments, consistent with best commercial practices. 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 use performance-based payments. . Not later than 120 days after the date of the enactment of this Act, the Secretary of Defense shall revise the Department of Defense Supplement to the Federal Acquisition Regulation to conform with section 2307(b) of title 10, United States Code, as amended by subsection (a).