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4.70.30.15. Progress Payments

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  1. In the case of a progress payment, SACC Manual general conditions 2010A, 2029, 2030, 2035 and 2040 provide that ownership of the materials or work-in-process will be transferred to Canada upon making such payment.
  2. When a progress payment is to be used; milestones, when possible, should be specified to relate payments to measurable progress on the contract. Technical or other contractual achievement yardsticks may be used as milestones. Milestone payment is a form of progress payment addressed under the policy related to progress payments. The value of each milestone should be negotiated before contract award. SACC Manual clause H3009C may be used in contracts when progress payment against milestone will be made in accordance with an established schedule of milestones using form PWGSC- TPSGC 1111 and the amount claimed is subject to holdback. When the amount claimed is not subject to holdback, clause H3010C may be used. Either clause may be used in conjunction with H3022C or H3024C and H4012C.
  3. When progress payments against milestones are not possible because of the nature of the contract, progress payments may be made at set periods of time on a calendar basis (time payment method), or based upon the actual costs incurred for material purchases and the partial completion of work, as certified by company and government inspectors. When progress payments will be made based on cost incurred using progress claim form PWGSC- TPSGC 1111, clause H1003C may be used in conjunction with H3022C or H3024C, if applicable. The clause H1003C may also be used in conjunction with H4500C in all contracts for goods with a Canadian-based contractor when advance or progress payments will be made. When payment will be made on a monthly basis for work performed in contracts for services, clause H1008C may be used. In contracts for maintenance services invoiced monthly or bi-monthly or quarterly, the clause H3020C may be used. The clause H3018C may be used in standing offers for air charter services for the carriage of goods and people.
  4. A combination of milestone and cost incurred progress payments is also possible for different phases of the contract. The combination method can be used, for example, to pay incurred costs in the early stages of a major procurement when it would be difficult to define milestones, with payments for later and more definable stages of the production process made against specified milestone achievements.
  5. If milestone or cost incurred progress payments are not possible, the time payment method of making progress payments should be used with caution. The overriding requirement for use of this method is the existence of a project progress monitoring and control system, to provide the contracting officer with reliable indicators of the actual value of work accomplished when a payment is due. With the exception of rental and service contracts, the time payment method must be approved at the director level or above.