§ 1832.7004 - Contractual implementation.

Contracts containing milestone billing arrangements will include the following requirements:

(a) Normally, milestone billings will not be submitted after deliveries of a major end item commences upon which milestone payments have been made. In the event the period between delivery of such major end item and the next end item delivery exceeds three months, milestone payments can continue to be made for the next end item as mutually agreed for appropriate events.

(b) Completion of each milestone must be certified by the contractor and verified by the contract administration office in order for payment to be made.

(c) The processing of milestone billing vouchers shall not be delegated outside NASA without specific instructions from the contracting officer, and the periodic review of payments by the contracting officer, e.g., reviews of action taken on issues that have arisen.

(d) The relationship between milestone billing events and deliverable contract line items will be clearly established in the contract. A milestone billing event should normally be associated with only one contract line item. However, a contract line item may have more than one related milestone billing event. Upon delivery and acceptance of a contract line item on which milestone payment(s) has/have been made, the amount of the related milestone payment(s) will be deducted from the amount otherwise payable for the contract line item.

(e) Milestone billing amounts will not be subject to the “Adjusting Billing Prices” paragraph of the “Incentive Price Revision-Firm Target clause (FAR 52.216-16(f)) in fixed-price incentive contracts, and will not be adjusted for actual costs incurred above or below the contract target cost. Adjustments to milestone billing amounts shall not be made unless specifically provided for in the economic price adjustment (EPA) clause of the contract. Furthermore, any adjustment to milestone amounts arising from an EPA clause shall be made at the same time as the contract price adjustment.

(f) Milestone payments are interim payments with respect to total performance, and, as such, are fully recoverable in the case of default, in the same manner as progress payments.