108 STAT. 3302 PUBLIC LAW 103-355 —OCT. 13, 1994 (b) PERFORMANCE-BASED PAYMENTS.— Such section, as amended by subsection (a), is further amended by inserting after subsection (a) the following new subsection (b): "(b) PERFORMANCE-BASED PAYMENTS.—Whenever practicable, Eayments under subsection (a) shall be made on any of the following ases: "(1) Performance measured by objective, quantifiable methods such as delivery of acceptable items, work measurement, or statistical process controls. "(2) Accomplishment of events defined in the program management plan. "(3) Other quantifiable measures of results.". (c) TERMINOLOGY CORRECTION.—Subsection (a)(2) of such section is amended by striking out "bid". (d) EFFECTIVE DATE OF LIEN RELATED TO ADVANCE PAY- MENTS.—Such section, as amended by subsection (a)(7), is further amended in subsection (d) by inserting before the period at the end of the third sentence the following: "and is effective immediately upon the first advancement of funds without filing, notice, or any other action by the United States". (e) CONDITIONS FOR PROGRESS PAYMENTS.— Such section, as amended by subsection (a)(7), is further amended in subsection (e)- (1) in the first sentence of paragraph (1), by striking out "work, which" and all that follows through "accomplished" and inserting in lieu thereof "work accomplished that meets standards established under the contract"; and (2) by striking out paragraph (3) and inserting in lieu thereof the following: "(3) This subsection applies to any contract in an amount greater than $25,000.". (f) CONDITIONS FOR PAYMENTS FOR COMMERCIAL ITEMS. —Such section, as amended by subsection (a)(7), is further amended by inserting after subsection (e) the following new subsection (f): "(f) CONDITIONS FOR PAYMENTS FOR COMMERCL\L ITEMS.— (1) Payments under subsection (a) for commercial items may be made under such terms and conditions as the head of the agency determines are appropriate or customary in the commercial marketplace and are in the best interests of the United States. The head of the agency shall obtain adequate security for such payments. If the security is in the form of a lien in favor of the United States, such lien is paramount to all other liens and is effective immediately upon the first payment, without filing, notice, or other action by the United States. "(2) Advance payments made under subsection (a) for commercial items may include payments, in a total amount of not more than 15 percent of the contract price, in advance of any performance of work under the contract. "(3) The conditions of subsections (d) and (e) need not be applied if they would be inconsistent, as determined by the head of the agency, with commercial terms and conditions pursuant to paragraphs (1) and (2).". (g) NAVY CONTRACTS.—Such section, as amended by subsection (f), is further amended by inserting after subsection (f) the following new subsection (g): "(g) CERTAIN NAVY CONTRACTS. —(1) The Secretary of the Navy shall provide that the rate for progress payments on any contract
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