32.806
Contract clauses
Contracting officers must include the appropriate assignment of claims clauses in contracts exceeding the micro-purchase threshold, ensuring compliance with agency policies and determinations.
Overview
FAR 32.806 outlines the requirements for including specific contract clauses related to the assignment of claims in government contracts. It directs contracting officers on when to use the Assignment of Claims clause (FAR 52.232-23) and its alternate, as well as the Prohibition of Assignment of Claims clause (FAR 52.232-24), based on contract value and agency determinations. The section ensures that the appropriate clauses are included to govern whether contractors can assign their right to be paid by the government to a third party, such as a bank or lender.
Key Rules
- Assignment of Claims Clause (52.232-23)
- Must be included in solicitations and contracts expected to exceed the micro-purchase threshold, unless assignment is prohibited. Not required for purchase orders, but may be used if consistent with agency policy.
- Alternate I for No-Setoff Commitment
- If a no-setoff commitment is authorized, the clause must be used with its Alternate I.
- Prohibition of Assignment of Claims Clause (52.232-24)
- Must be included if agency regulations determine that prohibiting assignment is in the Government’s interest.
Responsibilities
- Contracting Officers: Ensure the correct clauses are inserted based on contract value, agency policy, and assignment determinations.
- Contractors: Must comply with the assignment or prohibition of assignment as specified in the contract clauses.
- Agencies: Establish policies and make determinations regarding assignment of claims and no-setoff commitments.
Practical Implications
- This section ensures clarity on when contractors can assign payment rights, which can impact their ability to secure financing.
- Failure to include the correct clause can lead to disputes or payment complications.
- Contractors should review contracts for these clauses to understand their rights regarding assignment of claims.