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OMB Control Number: 90000010 Expiration Date: 8/31/2024CONTRACTOR'S REQUEST FOR PROGRESS PAYMENTIMPORTANT: See Paperwork Reduction Act Statement and complete this form in accordance with instructions.
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20a FAQ
A progress payment is a partial payment approach identified in a contract related to steps or phases toward the completion of the contract for goods and/or services. Use of this payment approach can require withhold of a percentage of payment pending completion of the entire contract and a bond.
Cost Reimbursable Contracts The project uses a cost reimbursable contract to pay the contractor for allowable expenses related to performing the work. Since the cost of the project is reimbursable, the contractor has much less risk associated with cost increases.
Cost Plus (CP) contracts are most risky for the buyers and Fixed Price (FP) contracts are most risky for the sellers.
The amount held back, frequently between 5% and 10%, should be specified in the construction contract. Retainage is typically deducted from each progress payment. For example, if a project calls for 10 payments of $50,000 and a 10% retainage is negotiated, then the owner pays $45,000 each time.
Contract Types Comparison Party 1 offersUnit priceA service + the cost of one unitBilateralServices or goods that are of value to the other partyUnilateralServices or goods that the other party requested, usually in an open requestImpliedServices or goods9 more rows • 26 Jan 2022
Fixed Price Contracts The seller and the buyer agree on a fixed price for the project. The seller often accepts a high level of risk in this type of contract. The buyer is in the least risk category since the price the seller agreed to is fixed.
The T&M contract type is the least preferred because it is the hardest to manage for both Government and contractor.
Standard Form 1443 - Contractor's Request for Progress Payment.
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