US Code

Public Law 119-73 (01/23/2026)

10 U.S.C. § 3802

Payment

(a)

Preference for Performance-Based Payments .—

section 3801 of this titleWhenever practicable, payments under shall be made using performance-based payments on any of the following bases:
(1)
Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls.
(2)
Accomplishment of events defined in the program management plan.
(3)
Other quantifiable measures of results.
(b)

Basis for performance-based payments .—

Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes listed in subsection (a).
(c)

Contractor Accounting Systems.—

(1)
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 receive performance-based payments.
(2)
Nothing in this chapter shall be construed to grant the Defense Contract Audit Agency the authority to audit compliance with Generally Accepted Accounting Principles.
(d)

Payment Amount .—

section 3801 of this titlePayments made under may not exceed the unpaid contract price.
(e)

Eligibility of Nontraditional Defense Contractors .—

The Secretary of Defense shall ensure that nontraditional defense contractors and other private sector companies are eligible for performance-based payments, consistent with best commercial practices.

Pub. L. 116–283, div. A, title XVIII, § 1834(a)134 Stat. 4234(Added and amended , (c), , , 4235.)

Editorial Notes

Codification

section 2307 of this titlePub. L. 116–283, § 1834(c)(1)Pub. L. 103–355, title II, § 2001(b)108 Stat. 3302Pub. L. 114–328, div. A, title VIII, § 831(a)130 Stat. 2282The text of subsec. (b) of , which was transferred to this section, redesignated as subsecs. (a), (b), (c), and (e), and amended by –(5), (7), was based on , , ; , , .

section 2307 of this titlePub. L. 116–283, § 1834(c)(1)act Aug. 10, 1956, ch. 104170A Stat. 131Pub. L. 85–800, § 972 Stat. 967Pub. L. 103–355, title II, § 2001(a)(3)108 Stat. 3301The text of subsec. (c) of , which was transferred to this section, redesignated as subsec. (d), and amended by , (6), was based on , ; , , ; , (7), , .

Amendments

Pub. L. 116–283, § 1834(c)(1)section 2307 of this titlesection 3801 of this title2021—Subsec. (a). –(3), redesignated subsec. (b) of as subsec. (a) of this section, struck out par. (1) designation before “Whenever practicable”, substituted “” for “subsection (a)” in introductory provisions, and redesignated subpars. (A) to (C) as pars. (1) to (3), respectively. Amendment directing striking out par. (1) designation before “Whenever possible” was executed by striking it out before “Whenever practicable” to reflect the probable intent of Congress. Former pars. (2) to (4) of subsec. (a) redesignated subsecs. (b), (e), and (c), respectively.

Pub. L. 116–283, § 1834(c)(2)(B)section 2307(b) of this titleSubsec. (b). , (4), after redesignation of as subsec. (a) of this section, redesignated par. (2) of subsec. (a) as subsec. (b), inserted heading, and substituted “subsection (a)” for “paragraph (1)”.

Pub. L. 116–283, § 1834(c)(2)(D)section 2307(b) of this titleSubsec. (c). , (5), after redesignation of as subsec. (a) of this section, redesignated par. (4) of subsec. (a) as subsec. (c), inserted heading, redesignated subpars. (A) and (B) as pars. (1) and (2), respectively, and realigned margins, and, in par. (2), substituted “this chapter” for “this section”.

Pub. L. 116–283, § 1834(c)(1)section 2307 of this titlesection 3801 of this titleSubsec. (d). , (6), redesignated subsec. (c) of as subsec. (d) of this section and substituted “” for “subsection (a)”.

Pub. L. 116–283, § 1834(c)(2)(C)section 2307(b) of this titleSubsec. (e). , (7), after redesignation of as subsec. (a) of this section, redesignated par. (3) of subsec. (a) as subsec. (e), moved it to the end of the section, and inserted heading.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 116–283section 1801(d) of Pub. L. 116–283section 3001 of this titleSection and amendment by effective , with additional provisions for delayed implementation and applicability of existing law, see , set out as an Effective Date of 2021 Amendment note preceding .

Regulations

Pub. L. 114–328, div. A, title VIII, § 831(b)130 Stat. 2283

section 2307(b) of title 1010 U.S.C. 3802(a)“Not later than 120 days after the date of the enactment of this Act [], the Secretary of Defense shall revise the Department of Defense Federal Acquisition Regulation Supplement to conform with , United States Code [see –(c), (e)], as amended by subsection (a).”
, , , provided that: