FAR 52.242-2—Production Progress Reports.
Plain-English Summary
FAR 52.242-2, Production Progress Reports, is a contract clause used when the Government needs periodic reporting on the contractor’s production status. It addresses two main topics: the contractor’s duty to prepare and submit the production progress reports identified in the contract Schedule, and the Contracting Officer’s authority to withhold payment if a required report is delayed. In practice, this clause gives the Government a simple oversight tool for monitoring schedule performance, identifying production problems early, and encouraging timely reporting. It matters most in supply or production contracts where visibility into manufacturing progress, delivery risk, or bottlenecks is important. The clause is not a general reporting requirement for all contracts; it applies only when the contract specifically calls for these reports in the Schedule. It also creates a financial incentive for compliance by allowing the Contracting Officer to withhold a limited amount from payment during a reporting delay.
Key Rules
Submit scheduled reports
The contractor must prepare and submit the production progress reports that the contract Schedule specifically requires. The clause does not itself define the report format, frequency, or content; those details come from the contract Schedule.
Follow the contract schedule
Reporting obligations exist only to the extent the contract Schedule specifies them. Contractors should treat the Schedule as the controlling source for due dates, reporting periods, and any special instructions.
Withholding for late reports
If a required production progress report is delayed, the Contracting Officer may withhold payment during the delay. This is a discretionary remedy, not an automatic penalty.
Withholding cap applies
Any withholding under this clause is limited to the lesser of $25,000 or 5 percent of the contract amount. The cap limits the Government’s leverage and prevents excessive withholding.
Delay must be in required report
The withholding authority applies only when there is a delay in furnishing a production progress report required under the contract. If no report is required, or the report is not yet due, this clause does not provide a basis for withholding.
Responsibilities
Contractor
Prepare and submit each production progress report required by the contract Schedule, on time and in the form, content, and frequency specified. The contractor should also monitor reporting deadlines closely to avoid payment withholding.
Contracting Officer
Identify the required reports in the contract Schedule, receive and review the reports, and decide whether to withhold payment when a required report is delayed. If withholding is used, the Contracting Officer must keep the amount within the clause’s dollar and percentage limits.
Agency/Program Office
Define the reporting requirements in the contract Schedule when production visibility is needed, and use the reports to monitor production status, schedule risk, and performance issues.
Practical Implications
This clause is mainly a compliance and visibility tool: contractors should expect payment pressure if they miss report deadlines, even if the underlying production work is otherwise progressing.
The biggest pitfall is assuming the clause creates a reporting duty by itself; the actual obligation comes from the contract Schedule, so both sides must check the schedule language carefully.
Contractors should build internal reminders and assign ownership for report preparation, because a late report can trigger withholding even when the delay is administrative rather than operational.
Contracting Officers should use withholding judiciously and document the delay and the amount withheld, since the clause gives discretion but also imposes a clear cap.
Because the clause is limited to production progress reports, it should not be used as a substitute for broader performance remedies or for reporting requirements not actually included in the contract.
Official Regulatory Text
As prescribed in 42.1107 (a) , insert the following clause: Production Progress Reports (Apr 1991) (a) The Contractor shall prepare and submit to the Contracting Officer the production progress reports specified in the contract Schedule. (b) During any delay in furnishing a production progress report required under this contract, the Contracting Officer may withhold from payment an amount not exceeding $25,000 or 5 percent of the amount of this contract, whichever is less. (End of clause)