37.304
Contract clauses
FAR 37.304 mandates specific payment and property title clauses in contracts for dismantling, demolition, or removal of improvements to ensure clear, compliant arrangements between the Government and contractors.
Overview
FAR 37.304 prescribes the use of specific contract clauses for solicitations and contracts involving the dismantling, demolition, or removal of improvements. It provides guidance to contracting officers on which payment-related clauses to include based on whether the Government or the contractor retains title to the property and whether payments are due to or from the Government. The section ensures that payment arrangements and property title transfers are clearly defined in the contract, protecting both parties' interests and ensuring compliance with federal requirements.
Key Rules
- Payment by Government to Contractor (52.237-4)
- Use this clause when the Government pays the contractor for dismantling, demolition, or removal work, in addition to any property title the contractor may receive. If the Government retains all materials, use the clause with Alternate I.
- Payment by Contractor to Government (52.237-5)
- Use this clause when the contractor receives title to property and owes a net payment to the Government, unless incremental payments are more advantageous to the Government.
- Incremental Payment by Contractor to Government (52.237-6)
- Use this clause when the contractor pays the Government in increments and receives title to property incrementally, if this approach benefits the Government (e.g., encourages small business participation).
Responsibilities
- Contracting Officers: Must determine the appropriate payment and title arrangement and insert the correct clause(s) in the solicitation and contract.
- Contractors: Must comply with the payment terms and property title provisions as specified in the contract clauses.
- Agencies: Ensure oversight and compliance with the prescribed use of clauses and payment arrangements.
Practical Implications
- This section ensures clarity in payment and property transfer arrangements for dismantling, demolition, or removal contracts.
- Proper clause selection is critical to avoid disputes over payment or property rights.
- Failure to use the correct clause can result in compliance issues or financial risk for both parties.