Propriety of Progress Payments

A disbursing officer requested a GAO decision on the extent of progress payments which may be allowed under a contract. The officer believed that total contract price refers to the total amount obligated so far in the contract. Under this interpretation, the contractor in question was already overpaid. By definition the contract price means the total amount fixed by the contract to be paid for complete performance of the contract. GAO determined that, although the contractor could be paid up to 80 percent of the total contract price under a progress payments clause, the payment cannot exceed the total amount of funds allotted to the contract.