32.801
Definitions
FAR 32.801 defines essential terms for assignment of claims, ensuring all parties understand their rights and obligations regarding payments and setoff in government contracts.
Overview
FAR 32.801 provides definitions for key terms used in Subpart 32.8, which governs the assignment of claims in government contracting. This section clarifies the meaning of "designated agency" and "no-setoff commitment," both of which are critical for understanding the rights and obligations of parties involved in the assignment of claims process. These definitions ensure that all parties—contractors, assignees, and government agencies—have a common understanding of the terminology used in related regulations and contract clauses.
Key Rules
- Designated Agency
- Refers to any executive branch department or agency authorized to make payments under an assignment of claims.
- No-Setoff Commitment
- Describes a contractual promise that payments to an assignee will not be reduced to offset the contractor's debts to the government, within the limits of the law.
Responsibilities
- Contracting Officers: Must use and interpret these definitions when processing assignments of claims and drafting related contract clauses.
- Contractors: Should understand these terms to ensure proper assignment of claims and to know their rights regarding payments and setoff.
- Agencies: Must apply these definitions consistently in all assignment of claims transactions and communications.
Practical Implications
- This section exists to prevent confusion and disputes over terminology in assignment of claims situations.
- Clear definitions help ensure that payments to assignees are handled correctly and that all parties understand the limits of government setoff rights.
- Misunderstanding these terms can lead to improper payment reductions or contractual disputes.