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Title 41 — Public ContractsRelease 119-73not60

§4505 Payments for Commercial Products and Commercial Services

Title 41 › Subtitle Subtitle I— Federal Procurement Policy › Chapter 45— CONTRACT FINANCING › § 4505

Last updated Apr 5, 2026|Official source

Summary

Lets agency heads use normal commercial payment terms when buying commercial products or services, as long as those terms are in the best interest of the Federal Government. The agency must get adequate protection for its payments. If that protection is a lien, it takes priority over other liens and starts as soon as the first payment is made, without any filing or notice. Advance payments may be up to 15 percent of the contract price before work begins. The agency can skip rules in sections 4503 and 4504 if they clash with commercial terms.

Full Legal Text

Title 41, §4505

Public Contracts — Source: USLM XML via OLRC

(a)Payments under section 4501 of this title for commercial products or commercial services may be made under terms and conditions that the head of the executive agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the Federal Government.
(b)The head of the executive agency shall obtain adequate security for the payments. If the security is in the form of a lien in favor of the Federal Government, the lien is paramount to all other liens and is effective immediately on the first payment, without filing, notice, or other action by the Federal Government.
(c)Advance payments made under section 4501 of this title for commercial products or commercial services may include payments, in a total amount not more than 15 percent of the contract price, in advance of any performance of work under the contract.
(d)The conditions of section 4503 and 4504 of this title need not be applied if they would be inconsistent, as determined by the head of the executive agency, with commercial terms and conditions pursuant to this section.

Legislative History

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 450541:255(f).June 30, 1949, ch. 288, title III, § 305(f), as added Pub. L. 103–355, title II, § 2051(e), Oct. 13, 1994, 108 Stat. 3304, as amended Pub. L. 104–106, title XLIII, § 4321(a)(4), Feb. 10, 1996, 110 Stat. 671.

Editorial Notes

Amendments

2018—Pub. L. 115–232, § 836(b)(18)(B)(i), substituted “Payments for commercial products and commercial services” for “Payments for commercial items” in section catchline. Subsecs. (a), (c). Pub. L. 115–232, § 836(b)(18)(A), substituted “commercial products or commercial services” for “commercial items”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2018 AmendmentAmendment by Pub. L. 115–232 effective Jan. 1, 2020, subject to a

Savings Provision

, see section 836(h) of Pub. L. 115–232, set out as an

Effective Date

of 2018 Amendment;

Savings Provision

note under section 453b of Title 6, Domestic Security.

Reference

Citations & Metadata

Citation

41 U.S.C. § 4505

Title 41 — Public Contracts

Last Updated

Apr 5, 2026

Release point: 119-73not60