In plain English
FAR 52.232-28, Invitation to Propose Performance-Based Payments, is a solicitation provision prescribed at FAR 32.100, most recently dated Mar 2000. The complete official text is reproduced below, verbatim, from GSA's published FAR source files.
Its text contains no sentence requiring insertion into subcontracts; see the flowdown section below for what that does and does not mean.
Does it flow down to subcontracts?
No flowdown mandate found in the clause text
This is a solicitation provision — it applies to offerors when submitting an offer, not to contract performance, so subcontract flowdown is generally not the operative question for it.
Where it's prescribed
As prescribed in 32.1005(b)(1), insert the following provision:
Prescribing reference: FAR 32.100.
The official text, verbatim
As prescribed in 32.1005(b)(1), insert the following provision:
Invitation to Propose Performance-Based Payments (Mar 2000)
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(a) The Government invites the offeror to propose terms under which the Government will make performance-based contract financing payments during contract performance. The Government will consider performance-based payment financing terms proposed by the offeror in the evaluation of the offeror’s proposal. The Contracting Officer will incorporate the financing terms of the successful offeror and the FARclause, Performance-Based Payments, at FAR 52.232-32, in any resulting contract.
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(b) In the event of any conflict between the terms proposed by the offeror and the terms in the clause at FAR 52.232-32, Performance-Based Payments, the terms of the clause at FAR 52.232-32 shall govern.
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(c) The Contracting Officer will not accept the offeror’s proposed performance-based payment financing if the financing does not conform to the following limitations:
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(1) The Government will make delivery payments only for supplies delivered and accepted, or services rendered and accepted in accordance with the payment terms of this contract.
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(2) The terms and conditions of the performance-based payments must-
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(i) Comply with FAR 32.1004;
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(ii) Be reasonable and consistent with all other technical and cost information included in the offeror’s proposal; and
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(iii) Their total shall not exceed 90 percent of the contract price if on a whole contract basis, or 90 percent of the delivery item price if on a delivery item basis.
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(3) The terms and conditions of the performance-based financing must be in the best interests of the Government.
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(d) The offeror’s proposal of performance-based payment financing shall include the following:
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(1) The proposed contractual language describing the performance-based payments (see FAR 32.1004 for appropriate criteria for establishing performance bases and performance-based finance payment amounts).
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(2) A listing of-
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(i) The projected performance-based payment dates and the projected payment amounts; and
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(ii) The projected delivery date and the projected payment amount.
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(3) Information addressing the Contractor’s investment in the contract.
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(e) Evaluation of the offeror’s proposed prices and financing terms will include whether the offeror’s proposed performance-based payment events and payment amounts are reasonable and consistent with all other terms and conditions of the offeror’s proposal.
(End of Provision)
Alternate I (Mar 2000). As prescribed in FAR 32.1005 (b)(2), add the following paragraph (f) to the basic provision:
(f) The Government will adjust each proposed price to reflect the cost of providing the proposed performance-based payments to determine the total cost to the Government of that particular combination of price and performance-based financing. The Government will make the adjustment using the procedure described in FAR 32.205(c).