What happens if there’s a conflict between expenditure profiles in Performance Based Payments and the priced proposal?

When there is a conflict between expenditure profiles in Performance Based Payments (PBP) and the priced proposal, this situation can indeed lead to advance payments that contradict the intent of the PBP structure. Performance Based Payments are designed to incentivize the contractor to achieve specific performance outcomes and milestones before receiving payments. If the expenditure profiles do not align with the priced proposal, it may result in the contractor receiving payments ahead of achieving the agreed-upon performance milestones. This conflicts with the purpose of PBP, which is to ensure that payments are closely tied to performance and deliverables.

Hence, the discrepancy fundamentally undermines the performance-based structure intended to foster accountability and ensure that the contractor delivers on its commitments before funds are disbursed. This situation could create financial risks for the government by resulting in payments for performance that has not yet been delivered or achieved, thereby negating the incentive mechanism that PBPs are supposed to enforce.