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OFFICE OF THE UNDER SECRETARY OF DEFENSE
3000 DEFENSE PENTAGON
WASHINGTON, DC 20301-3000
ACQUISITION
AND SUSTAINMENT
In reply refer to
DARS Tracking Number: 2020-O0010, Revision 2
MEMORANDUM FOR COMMANDER, UNITED STATES CYBER
COMMAND (ATTN: ACQUISITION EXECUTIVE)
COMMANDER, UNITED STATES SPECIAL OPERATIONS
COMMAND (ATTN: ACQUISITION EXECUTIVE)
COMMANDER, UNITED STATES TRANSPORTATION
COMMAND (ATTN: ACQUISITION EXECUTIVE)
DEPUTY ASSISTANT SECRETARY OF THE ARMY
(PROCUREMENT)
DEPUTY ASSISTANT SECRETARY OF THE NAVY
(PROCUREMENT)
DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE
(CONTRACTING)
DEFENSE AGENCY AND DOD FIELD ACTIVITY DIRECTORS
SUBJECT: Class Deviation—Progress Payment Rates
This Revision 2 supersedes and revises Class Deviation 2020-O0010, Revision 1,
Progress Payment Rates, to remove the clause 52.232-16, Progress Payments (DEVIATION
2020-O0010, from the deviation. Effective July 7, 2023, contracting officers shall—
• For large business concerns: When providing for progress payments, use the clause at
Federal Acquisition Regulation (FAR) 52.232-16, Progress Payments, in solicitations and
contracts when award is anticipated on or after July 7, 2023. Notwithstanding FAR
1.108(d)(3), contracting officers shall not amend existing contracts, task orders, and delivery
orders to remove clause 52.232-16, Progress Payments (DEVIATION 2020-O0010).
• For small business concerns: When providing for progress payments, continue to use the
attached clause 252.232-7004, DoD Progress Payment Rates (DEVIATION 2020-O0010), in
lieu of the clause at Defense Federal Acquisition Regulation Supplement (DFARS)
252.232-7004.
When providing for progress payments in unrestricted solicitations that could result in
award to either small or large business concerns, contracting officers are reminded to include
both the clauses at FAR 52.232-16 and at DFARS 252.232-7004 (DEVIATION 2020-O0010) in
the solicitation to enable use of the appropriate clause in the eventual award.
Class Deviation 2020-O0010, Revision 2
Progress Payment Rates
On March 20, 2020, in response to the Coronavirus Disease 2019 (COVID-19) national
emergency, DoD issued Class Deviation 2020-0010, and subsequently Revision 1, to increase
the progress payment rates at DFARS 232.501-1 to 90 percent for large business concerns and 95
percent for small business concerns. In accordance with H.J. Res 7, which was signed into law
on April 10, 2023, the national emergency declared by the President on March 13, 2020, has
been terminated. This Revision 2 reinstates the progress payment rate of 80 percent in the clause
at FAR 52.232-16, Progress Payments for new contracts with large businesses and retains the
temporary increase to the progress payment rate of 95 percent for small business concerns to
enable their continued access to cash flow through this financing method.
This class deviation remains in effect until incorporated into the FAR or DFARS or
otherwise rescinded. Please send questions and requests for additional information to
osd.pentagon.ousd-a-s.mbx.dpc-pcf@mail.mil.
John M. Tenaglia
Principal Director,
Defense Pricing and Contracting
Attachment:
As stated
Page 2 of 2
Class Deviation 2020-O0010, Revision 2
Progress Payment Rates
Attachment
252.232-7004 DoD Progress Payment Rates. (DEVIATION 2020-O0010)
Use the following deviation clause in lieu of the clause at DFARS 252.232-7004 as
prescribed in DFARS 232.502-4-70(b), if the contractor is a small business or small
disadvantaged business concern:
DOD PROGRESS PAYMENT RATES (MAR 2020) (DEVIATION 2020-O0010)
If the Contractor is a small business concern, the Progress Payments clause of this
contract is modified to change each mention of the progress payment rate and
liquidation rate (excepting paragraph (k), Limitations on Undefinitized Contract
Actions) to 95 percent.
(End of clause)