32.805 Procedure
Source: FAR 32.805 on acquisition.gov
FAR 32.805 establishes strict procedural requirements for executing, filing, and releasing assignments of claims to ensure proper payment and legal compliance in government contracts.
Overview
FAR 32.805 outlines the procedures for assigning claims under government contracts, detailing the requirements for execution, filing, notification, examination, and release of assignments. It specifies how assignments must be executed depending on the type of entity (corporation, partnership, or individual), the documentation required, the process for notifying the government, and the steps for releasing or reassigning claims. The regulation ensures that all parties involved in the assignment of claims follow a standardized process to protect the interests of both the government and the contractor.
Key Rules
- Execution of Assignments
- Corporations must have assignments executed by an authorized representative, attested by the secretary or assistant secretary, and include a corporate seal or board resolution. Partnerships require evidence of authority for the signing partner. Individuals must sign before a notary.
- Filing Requirements
- The assignee must send an original and three copies of the notice of assignment, plus a certified copy of the assignment instrument, to specified parties.
- Notice Format
- A suggested format for the notice of assignment is provided to ensure consistency and completeness.
- Government Examination
- Contracting officers must verify contract approval, assignability, scope of assignment, and assignee registration in SAM before acknowledging receipt.
- Release of Assignment
- Procedures are outlined for releasing or reassigning assignments, including required documentation and acknowledgment of receipt.
Responsibilities
- Contracting Officers: Verify compliance with assignment procedures, ensure proper documentation, and acknowledge receipt of notices.
- Contractors: Execute assignments correctly, provide required documentation, and follow procedures for release or reassignment.
- Agencies: Oversee compliance and maintain records of assignments and releases.
Practical Implications
- This section ensures the legal and procedural integrity of claim assignments, protecting all parties and facilitating proper payment processes. Failure to follow these procedures can delay payments or invalidate assignments, making compliance critical for contractors and assignees.
(a) Assignments.
(1) Assignments by corporations shall be-
(i) Executed by an authorized representative;
(ii) Attested by the secretary or the assistant secretary of the corporation; and
(iii) Impressed with the corporate seal or accompanied by a true copy of the resolution of the corporation’s board of directors authorizing the signing representative to execute the assignment.
(2) Assignments by a partnership may be signed by one partner, if the assignment is accompanied by adequate evidence that the signer is a general partner of the partnership and is authorized to execute assignments on behalf of the partner-ship.
(3) Assignments by an individual shall be signed by that individual and the signature acknowledged before a notary public or other person authorized to administer oaths.
(b) Filing. The assignee shall forward to each party specified in 32.802(e) an original and three copies of the notice of assignment, together with one true copy of the instrument of assignment. The true copy shall be a certified duplicate or photostat copy of the original assignment.
(c) Format for notice of assignment. The following is a suggested format for use by an assignee in providing the notice of assignment required by 32.802(e).
Notice of Assignment
To: ___________ [Address to one of the parties specified in 32.802(e)].
This has reference to Contract No. __________ dated ______, entered into between ______ [Contractor’s name and address] and ______ [Government agency, name of office, and address], for ________ [Describe nature of the contract].
Moneys due or to become due under the contract described above have been assigned to the undersigned under the provisions of the Assignment of Claims Act of1940, as amended, (http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title31-section3727&num=0&edition=prelim" target="_blank">31 U.S.C.3727, http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title41-section6305&num=0&edition=prelim" target="_blank">41 U.S.C. 6305).
A true copy of the instrument of assignment executed by the Contractor on ___________ [Date], is attached to the original notice.
Payments due or to become due under this contract should be made to the undersigned assignee.
Please return to the undersigned the three enclosed copies of this notice with appropriate notations showing the date and hour of receipt, and signed by the person acknowledging receipt on behalf of the addressee.
Very truly yours,
__________________________________________________ [Name of Assignee]
By _______________________________________________ [Signature of Signing Officer]
__________________________________________________ [Titleof Signing Officer]
__________________________________________________ [Address of Assignee]
Acknowledgement
Receipt is acknowledged of the above notice and of a copy of the instrument of assignment. They were received ____(a.m.) (p.m.) on ______, 20___.
__________________________________________________ [Signature]
__________________________________________________ [Title]
__________________________________________________ On behalf of
__________________________________________________ [Name of Addressee of this Notice]
(d) Examination by the Government. In examining and processing notices of assignment and before acknowledging their receipt, contracting officers should assure that the following conditions and any additional conditions specified in agency regulations, have been met:
(1) The contract has been properly approved and executed.
(2) The contract is one under which claims may be assigned.
(3) The assignment covers only money due or to become due under the contract.
(4) The assignee is registered separately in the System for Award Management unless one of the exceptions in 4.1102 applies.
(e) Release of assignment.
(1) A release of an assignment is required whenever-
(i) There has been a further assignment or reassignment under the Act; or
(ii) The contractor wishes to reestablish its right to receive further payments after the contractor’s obligations to the assignee have been satisfied and a balance remains due under the contract.
(2) The assignee, under a further assignment or reassignment, in order to establish a right to receive payment from the Government, must file with the addressees listed in 32.802(e) a-
(i) Written notice of release of the contractor by the assigning financing institution;
(ii) Copy of the release instrument;
(iii) Written notice of the further assignment or reassignment; and
(iv) Copy of the further assignment or reassignment instrument.
(3) If the assignee releases the contractor from an assignment of claims under a contract, the contractor, in order to establish a right to receive payment of the balance due under the contract, must file a written notice of release together with a true copy of the release of assignment instrument with the addressees noted in 32.802(e).
(4) The addressee of a notice of release of assignment or the official acting on behalf of that addressee shall acknowledge receipt of the notice.