Title 10 — Armed ForcesRelease 119-73
§3804 Conditions for progress payments
Title 10 › Subtitle Subtitle A— - General Military Law › Part PART V— - ACQUISITION › Subpart Subpart D— - General Contracting Provisions › Chapter CHAPTER 277— - CONTRACT FINANCING › § 3804
Summary
Secretary of Defense must ensure payments for work in progress match the work that meets the contract’s standards. Contractors must give the information and proof the Secretary needs. Payments may not cover more than 80 percent of work done until contract terms, specifications, and price are final. Applies to contracts over $25,000.
Full Legal Text
Title 10, §3804
Armed Forces — Source: USLM XML via OLRC
(a)The Secretary of Defense shall ensure that any payment for work in progress (including materials, labor, and other items) under a defense contract that provides for such payments is commensurate with the work accomplished that meets standards established under the contract. The contractor shall provide such information and evidence as the Secretary of Defense determines necessary to permit the Secretary to carry out the preceding sentence.
(b)The Secretary shall ensure that progress payments referred to in subsection (a) are not made for more than 80 percent of the work accomplished under a defense contract so long as the Secretary has not made the contractual terms, specifications, and price definite.
(c)This section applies to any contract in an amount greater than $25,000.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Codification The text of subsec. (e) of section 2307 of this title, which was transferred to this section and amended by Pub. L. 116–283, § 1834(e), was based on Pub. L. 100–370, § 1(f)(1)(A), July 19, 1988, 102 Stat. 846; Pub. L. 101–510, div. A, title XIII, § 1322(a)(4)(B), Nov. 5, 1990, 104 Stat. 1671; Pub. L. 102–25, title VII, § 701(d)(4), Apr. 6, 1991, 105 Stat. 114; Pub. L. 103–355, title II, § 2001(a)(5), (7), (e), Oct. 13, 1994, 108 Stat. 3301, 3302.
Amendments
2021—Pub. L. 116–283, § 1834(e)(1), transferred subsec. (e) of section 2307 of this title to this section and struck out subsec. (e) designation and heading “Conditions for Progress Payments” at beginning. Subsec. (a). Pub. L. 116–283, § 1834(e)(1)(B), (2), after transfer of section 2307(e) of this title to this section, redesignated par. (1) as subsec. (a) and inserted heading. Subsec. (b). Pub. L. 116–283, § 1834(e)(1)(B), (3), after transfer of section 2307(e) of this title to this section, redesignated par. (2) as subsec. (b), inserted heading, and substituted “subsection (a)” for “paragraph (1)”. Subsec. (c). Pub. L. 116–283, § 1834(e)(1)(B), (4), after transfer of section 2307(e) of this title to this section, redesignated par. (3) as subsec. (c), inserted heading, and substituted “This section” for “This subsection”.
Statutory Notes and Related Subsidiaries
Effective Date
Section and amendment by Pub. L. 116–283 effective Jan. 1, 2022, with additional provisions for delayed implementation and applicability of existing law, see section 1801(d) of Pub. L. 116–283, set out as an
Effective Date
of 2021 Amendment note preceding section 3001 of this title. Pilot Program To Incentivize Progress Payments Pub. L. 118–31, div. A, title VIII, § 874, Dec. 22, 2023, 137 Stat. 352, provided that: “(a) Pilot Program.—The Under Secretary of Defense for Acquisition and Sustainment shall establish and implement a pilot program to incentivize contractor performance by paying covered contractors a progress payment rate that is up to 10 percent higher than the customary progress payment rate on a contract-by-contract basis. “(b) Incentive Criteria.—The Under Secretary shall develop and establish clear and measurable criteria for the payment to contractors of higher progress payments as described in subsection (a), including criteria for qualifying for such payments and the amount of such payments. “(c) Applicability.—The Under Secretary shall apply the criteria established under subsection (b) and any associated incentive on a contract-by-contract basis when determining whether to pay a contractor a higher progress payment under the pilot program established under subsection (a) and the amount of such payment. “(d) Participation Voluntary.—Participation in the pilot program established under subsection (a) shall be on a voluntary basis. “(e) Notice and Comment.—The Under Secretary shall issue the
Regulations
implementing the pilot program established under subsection (a) and establishing the criteria required by subsection (b) after notice and an opportunity for public comment of not more than 30 days. “(f) Report.—Not later than
September 30, 2024, and annually thereafter, the Under Secretary for Acquisition and Sustainment shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on the implementation and activities of the pilot program established under subsection (a), including a comprehensive list of contractors that received increased progress payments under the pilot program and the contracts with respect to which such increased progress payments were made. “(g) Definitions.—In this section:“(1) Covered contractor.—The term ‘covered contractor’ means a contractor of the Department of Defense that is eligible for progress payments under section 3804 of title 10, United States Code. “(2) Customary progress payment rate.—The term ‘customary progress payment rate’ refers to the rate of progress payments provided for under section 3804 of title 10, United States Code, and payable in accordance with the applicable provisions of the Federal Acquisition Regulation and the Defense Federal Acquisition Regulation Supplement. “(3) Under secretary.—The term ‘Under Secretary’ means the Under Secretary for Acquisition and Sustainment. “(h) Sunset.—“(1) In general.—Except as provided by paragraph (2), the authority to carry out the pilot program established under subsection (a) shall terminate on
January 1, 2029. “(2) Existing contracts.—Notwithstanding paragraph (1), a contractor that the Under Secretary determines under the pilot program established under subsection (a) shall be paid a higher progress payment under such pilot program with respect to a contract in effect as of the date described in paragraph (1) shall receive such higher progress payments until the earlier of—“(A) the termination or expiration of the contract; or “(B) the date on which the contractor becomes ineligible for progress payments or higher progress payments under such pilot program.” Waivers of Certain Conditions for Progress Payments Under Certain Contracts During the COVID–19 National Emergency Pub. L. 116–283, div. A, title VIII, § 891, Jan. 1, 2021, 134 Stat. 3793, which related to waivers of certain conditions for progress payments under certain contracts during the COVID–19 national emergency, was repealed by Pub. L. 119–60, div. A, title VIII, § 811(b)(3)(C), Dec. 18, 2025, 139 Stat. 948.
Reference
Citations & Metadata
Citation
10 U.S.C. § 3804
Title 10 — Armed Forces
Last Updated
Apr 6, 2026
Release point: 119-73