Lonewolf,
I would think the F-35 contract with L-M would be a progress payment type of contract. Certainly, the T&Cs would further define specific requirements. There is always a tug-a-war going on as you know, fiscal year money to be spent in the fiscal year and the question can it be spent or will it be lost if it isn't spent. So the push is on to spend the money while it is available and that is what I think you see going on, "Of course we are making progress". A classic progress payment plan example as defined in FAR regulations makes it more imperative get on with it to get the money spent (all within Federal laws):
Section I:
Contract price
$2,850,000
Change orders and unpriced orders
(to extent funds have been obligated)
$150,000
Revised contract price
$3,000,000
Section II:
Total costs incurred to date
$2,700,000
Estimated additional costs to complete
$900,000
Total costs to complete
$3,600,000
Loss ratio factor
$3,000,000/$3,600,000 = 83.3%
Total costs eligible for progress payments
$2,700,000
Loss ratio factor
× 83.3%
Recognized costs for progress payments
$2,249,100
Progress payment rate
× 80.0%
Alternate amount to be used
$1,799,280
Section III:
Factored costs of items delivered*
$750,000
Recognized costs applicable to undelivered items ($2,249,100–$750,000)
$1,499,100
*This amount must be the same as the contract price of the items delivered.