This is wrong in so many ways. In the federal agency by which I was employed for nearly 30 years (the Department of Veterans Affairs), every single procurement regulation, which derive directly from statutes, requires payment on delivery. There are some large contracts that involve partial advance or interim payments, and this is because the providing company cannot do things entirely out of its own pocket - build a new hospital, for example. I doubt very much if the Office of Procurement Policy within OMB has the legal authority to change all this.

You say that OMB has ordered... There is no such thing as "secret" policy changes of this order of magnitude - if for no other reason than how could they be implemented if agencies don't know about them? If it is a "proposed" policy, than the proposal must be published in advance for public comment. Please provide a link to your source.