The Defence Procurement Agency is introducing advance payments for drone manufacturers, with prepayments of up to 70%

The Defence Procurement Agency is launching an advance payment mechanism for drone manufacturers on the DOT-Chain Defence marketplace. Previously, the model operated on a post-delivery payment basis. Now, if a manufacturer consistently and promptly fulfils orders, it may receive a portion of the funds in advance.

The Ministry of Defence states that this will help some companies scale and accelerate production. Access to advance payments will be available to manufacturers who have been continuously present on the marketplace for more than three months with at least one product and have no overdue debts to the agency.

The advance payment amount depends on the actual order fulfilment speed over the previous three months:

• up to 70% advance – if the average delivery period is 30 calendar days or fewer;
• up to 30% advance – if the period is longer.

The advance is issued for 60 days from the payment date. If fewer than 60 calendar days remain until the contract expires, the funds are issued until the contract’s end. If a manufacturer has not fully met its obligations, it must return any unused funds. The link contains DPA`S explanation, with examples, of how the new procurement model will work.