Long Term Relationships

This essay discusses that specifically talking about contract financing or monetizing, there are numerous methods for contract financing. Advance payments involve the payment of money to the contractor by the government before any services or goods have been received. By doing so, the government anticipates performance by the contractor under one or more contracts thereby liquidating them from payments. Since this method of payment is not performance oriented, it differs from other modes of payment that are performance-based. Advance payments are usually employed as a method to pay prime contractors so that they may pay subcontractors. Progress payments, as the name suggests, involves the payment of money as the work progresses and costs are incurred along the way. However, this progress does not include payments based on completion of certain stages, partial deliveries, partial payments in case of contract termination, and performance oriented payments. Legal and financial government institutions such as the Federal Reserve Bank may also guarantee loans to individuals so that contractors are financed in order to pay for the acquisition of goods and services. Such financing mainly comes from the private sector under the terms of the contract. Under particular statutes, progress payments for the completion of a certain stage are authorized which is used under agency procedures as a method of payment.

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