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DoD is proposing to amend the Defense Federal Acquisition Regulation Supplement to implement section 831 of the National Defense Authorization Act for Fiscal Year 2017 to require the following:

• Performance-based payments shall not be conditioned upon costs incurred in contract performance but on the achievement of performance outcomes.
• Nontraditional defense contractors and other private sector 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 receive performance-based payments. 

Nothing in the rule shall be construed to grant the Defense Contract Audit Agency the authority to audit compliance with Generally Accepted Accounting Principles. The rule is not expected to increase costs for contractors, and the rule does not impact negotiated contract prices. The rule revises the contractual procedures for financing through performance-based payments and provides for increased utilization of this financing method for traditional and nontraditional defense contractors.