52.232-10 Payments under Fixed-Price Architect-Engineer Contracts
Source: FAR 52.232-10 on acquisition.gov
FAR 52.232-10 requires monthly substantiated payment requests, allows for government withholdings, and mandates a release of claims before final payment on fixed-price architect-engineer contracts.
Overview
FAR 52.232-10 outlines the payment procedures for fixed-price architect-engineer (A-E) contracts. It establishes requirements for monthly progress payments based on work performed, potential withholdings to protect the Government’s interests, and the process for final payment upon contract completion. The clause also addresses limitations on progress payments for undefinitized contract actions and requires a release of claims before final payment.
Key Rules
- Monthly Estimates and Vouchers
- Contractors must submit monthly estimates of work performed, meeting contract quality standards, along with supporting data and vouchers.
- Government Review and Withholding
- The Government pays approved vouchers but may withhold up to 10% if necessary to protect its interests, based on contractor performance. Excess withholdings are released when work is substantially complete.
- Final Payment
- Upon satisfactory completion and acceptance of all work, the contractor receives the unpaid balance, including withheld amounts.
- Release of Claims
- Before final payment or settlement, contractors must provide a release of all claims against the Government, except those specifically excepted.
- Limit on Progress Payments for Undefinitized Actions
- Progress payments for undefinitized contract actions are capped at 80% of work accomplished until definitization.
Responsibilities
- Contracting Officers: Review and approve vouchers, determine and manage withholdings, ensure release of claims, and enforce payment limits on undefinitized actions.
- Contractors: Submit accurate monthly estimates and vouchers, provide supporting data, comply with withholdings, execute release of claims, and adhere to payment caps on undefinitized actions.
- Agencies: Oversee compliance with payment procedures and protect government interests.
Practical Implications
- This clause ensures timely and controlled payments for A-E contracts, balancing contractor cash flow with government risk mitigation. Contractors must maintain accurate records and be prepared for potential withholdings. Failure to provide required documentation or releases can delay payments. The 80% cap on undefinitized actions prevents overpayment before contract terms are finalized.
As prescribed in 32.111(c)(1), insert the following clause:
Payments under Fixed-Price Architect-Engineer Contracts (Apr 2010)
(a) Estimates shall be made monthly of the amount and value of the work and services performed by the Contractor under this contract which meet the standards of quality established under this contract. The estimates, along with any supporting data required by the Contracting Officer, shall be prepared by the Contractor and submitted along with its voucher.
(b) After receipt of each substantiated voucher, the Government shall pay the voucher as approved by the Contracting Officer or authorized representative. The Contracting Officer shall require a withholding from amounts due under paragraph (a) of this clause of up to 10 percent only if the Contracting Officer determines that such a withholding is necessary to protect the Government’s interest and ensure satisfactory completion of the contract. The amount withheld shall be determined based upon the Contractor’s performance record under this contract. Whenever the Contracting Officer determines that the work is substantially complete and that the amount retained is in excess of the amount adequate for the protection of the Government, the Contracting Officer shall release the excess amount to the Contractor.
(c) Upon satisfactory completion by the Contractor and final acceptance by the Contracting Officer of all the work done by the Contractor under the "Statement of Architect-Engineer Services", the Contractor will be paid the unpaid balance of any money due for work under the statement, including all withheld amounts.
(d) Before final payment under the contract, or before settlement upon termination of the contract, and as a condition precedent thereto, the Contractor shall execute and deliver to the Contracting Officer a release of all claims against the Government arising under or by virtue of this contract, other than any claims that are specifically excepted by the Contractor from the operation of the release in amounts stated in the release.
(e) Notwithstanding any other provision in this contract, and specifically paragraph (b) of this clause, progress payments shall not exceed 80 percent on work accomplished on undefinitized contract actions. A "contract action" is any action resulting in a contract, as defined in FAR subpart 2.1, including contract modifications for additional supplies or services, but not including contract modifications that are within the scope and under the terms of the contract, such as contract modifications issued pursuant to the Changes clause, or funding and other administrative changes.
(End of clause)