Increased Progress Payments: DoD Adjusts Procurement Rules to Increase Liquidity

Last Friday the Department of Defense (DoD) issued a deviation that will permit it to increase Progress Payments from 80% to 90% for large businesses and 85% to 95% for small businesses.  Where the provision is included, this contract financing mechanism authorizes the federal government to pay contractors 90% of the total costs they have incurred under a contract, whether or not actually paid, plus financing payments to subcontractors, while work is being performed but before supplies have been delivered.