What are the logistics of the government purchasing an aircraft carrier? ACH has a 9 digit limit for example. Do they enter 10 separate payments for a $10B aircraft carrier into Netsuite and click "pay"? What is the actual operational detail?

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    Does the government really purchase an aircraft carrier with one payment? I would have expected multiple contractors and progress payments. Commented Sep 9, 2020 at 23:16

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While terms will vary by government and specific contract, progress payments are the typical means for financing expensive, long-term government projects.

Progress payments are periodic payments made by the government as performance on the contract proceeds. Such payments are based either on cost incurred by the contractor or on a percentage of stage of completion achieved under the contract. Perfomance-based payments are contract financing payments of predetermined amounts that are made when a contractor satisfies predefined contract events or criteria. They are not payments for accepted items but rather advances based on work performed.

Information specific to the United States.

Briefly, the US Navy requests and Congress approves the construction of ships.

This table from an Inspector General's report shows ships under construction in 2009.

Ships Under Construction

Note that with a few exceptions, financing uses progress payments.

As the ships are built, various documents are submitted to the Defense Finance Accounting Service (DFAS).

Everything from the contracts to contractor payments are processed by the Mechanization Of Contract Administration Services (MOCAS) system.

What is MOCAS?

High-Level MOCAS Processing

What Is the Oldest Computer Program Still in Use?, MIT Technology Review, August 6, 2015.

Trillions of dollars have passed through the computational records in MOCAS. In its current form the system is managing roughly $1.3 trillion in obligations and 340,000 contracts.


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