37.303 Payments
Source: FAR 37.303 on acquisition.gov
FAR 37.303 requires clear payment terms and careful consideration of salvage value in contracts for dismantling or demolition, ensuring the Government retains valuable property and payment arrangements are fair and transparent.
Overview
FAR 37.303 addresses payment arrangements in contracts for dismantling, demolition, or removal of improvements. It allows for two primary payment structures: either the Government pays the contractor for performing the work, or the contractor pays the Government for the right to salvage and remove materials. The section also requires the contracting officer to assess the value and usefulness of salvageable property. Items more valuable to the Government than as salvage must be retained by the Government and specified in the contract. For other property, the contracting officer must determine its fair market value, as the contractor will gain title to it. This valuation is crucial for determining payment terms and any additional compensation if the contract is terminated.
(a) The contract may provide that the-
(1) Government pay the contractor for the dismantling or demolition of structures; or
(2) Contractor pay the Government for the right to salvage and remove the materials resulting from the dismantling or demolition operation.
(b) The contracting officer shall consider the usefulness to the Government of all salvageable property. Any of the property that is more useful to the Government than its value as salvage to the contractor should be expressly designated in the contract for retention by the Government. The contracting officer shall determine the fair market value of any property not so designated, since the contractor will get title to this property, and its value will therefore be important in determining what payment, if any, shall be made to the contractor and whether additional compensation will be made if the contract is terminated.