Definition: Payments made to assure acceptable performance and progress on a contract.

• A. Progress payments
• B. Milestone payments
• C. Advance payments
• D. Incentive contracts

Answer: (A)

Progress payments are payments issued during the course of a contract to fund ongoing work and ensure the project advances as planned. They’re typically tied to the percentage of work completed or costs incurred, so the buyer can monitor progress and the contractor maintains cash flow to sustain performance. This arrangement helps align payment with actual progress and reduces the risk that work stalls due to funding gaps.

Advanced payments, by contrast, are made before any work begins, which can expose the buyer to risk if performance doesn’t occur. Milestone payments are made when specific deliverables or stages are reached, which helps validate completion of particular targets but doesn’t continuously fund ongoing work between milestones. Incentive contracts involve additional pay for surpassing performance targets or achieving efficiencies, rather than simply funding ongoing progress.

So, payments made to assure acceptable performance and progress on a contract align with progress payments.