48 CFR 32.1003 - Criteria for use.
The contracting officer may use performance-based payments for individual orders and contracts provided -
(a) The contracting officer and offeror agree on the performance-based payment terms;
(b) The contract, individual order, or line item is a fixed-price type;
(c) For indefinite delivery contracts, the individual order does not provide for progress payments; and
(d) For other than indefinite delivery contracts, the contract does not provide for progress payments.