52.237-4 Payment by Government to Contractor
Source: FAR 52.237-4 on acquisition.gov
FAR 52.237-4 establishes clear payment, retention, and property title transfer procedures for dismantling, demolition, or removal contracts, ensuring both contractor compensation and Government protection.
Overview
FAR 52.237-4 outlines the payment terms for contracts involving the dismantling, demolition, or removal of improvements, where the Government pays the contractor in addition to any property title transferred. The clause specifies how and when payments are made, retention of payment percentages, conditions for releasing retained amounts, and the transfer of title to dismantled property. It also provides for final payment procedures and claim releases. Alternate I applies when the Government retains all materials, removing the property title transfer provision.
Key Rules
- Payment Structure
- The Government pays the contractor either in full or partial consideration, as specified in the contract.
- Progress Payments and Retention
- Progress payments are made monthly or more frequently, with a standard 10% retention until final completion unless satisfactory progress is demonstrated.
- Retention Release
- Upon substantial completion, the Contracting Officer may release excess retained amounts, keeping only what is necessary to protect the Government.
- Title to Property
- Unless otherwise specified, the contractor receives title to dismantled property not retained by the Government, with title vesting upon award or notice to proceed.
- Final Payment and Claims Release
- Final payment is made upon completion, acceptance, and submission of a proper voucher, with the contractor required to release claims against the Government unless specifically excepted.
- Alternate I
- If the Government retains all materials, the property title transfer provision is omitted.
Responsibilities
- Contracting Officers: Determine payment terms, approve progress estimates, manage retention, authorize release of retained funds, and oversee property title transfer or retention.
- Contractors: Perform work as scheduled, submit progress estimates and vouchers, comply with property removal or waiver requirements, and release claims upon final payment.
- Agencies: Ensure compliance with payment and property disposition procedures, and maintain oversight of contract execution.
Practical Implications
- This clause ensures clear payment and property transfer terms for demolition/dismantling contracts, protecting both parties’ interests. Contractors must track progress, manage documentation, and understand property rights. Common pitfalls include misunderstanding retention, failing to submit proper vouchers, or mishandling property title transfers.
As prescribed in 37.304(a), insert the following clause in solicitations and contracts solely for dismantling, demolition, or removal of improvements whenever the contracting officer determines that the Government shall make payment to the contractor in addition to any title to property that the contractor may receive under the contract:
Payment by Government to Contractor (Apr 1984)
(a) In ______ [insert "full" if Alternate I is used; otherwise insert "partial"] consideration of the performance of the work called for in the Schedule, the Government will pay to the Contractor ______________ [fill in amount].
(b) The Government shall make progress payments monthly as the work proceeds, or at more frequent intervals as determined by the Contracting Officer, on estimates approved by the Contracting Officer. Except as provided in paragraph (c) of this clause, in making progress payments the Contracting Officer shall retain 10 percent of the estimated payment until final completion and acceptance of the contract work. However, if the Contracting Officer finds that satisfactory progress was achieved during any period for which a progress payment is to be made, the Contracting Officer may authorize such payment in full, without retaining a percentage. Also, on completion and acceptance of each unit or division for which the price is stated separately, the Contracting Officer may authorize full payment for that unit or division without retaining a percentage.
(c) When the work is substantially completed, the Contracting Officer shall retain an amount considered adequate for the protection of the Government and, at the Contracting Officer’s discretion, may release all or a portion of any excess amount.
(d) In further consideration of performance, the Contractor shall receive title to all property to be dismantled or demolished that is not specifically designated as being retained by the Government. The title shall vest in the Contractor immediately upon the Government’s issuing the notice of award, or if a performance bond is to be furnished after award, upon the Government’s issuance of a notice to proceed with the work. The Government shall not be responsible for the condition of, or any loss or damage to, the property. If the Contractor does not wish to remove from the site any of the property acquired, the Contracting Officer may, upon written request, grant the Contractor permission to leave the property on the premises. As a condition to the granting of this permission, the Contractor agrees to waive any right, title, claim, or interest in and to the property.
(e) Upon completion and acceptance of all work and receipt of a properly executed voucher, the Government shall make final payment of the amount due the Contractor under this contract. If requested, the Contractor shall release all claims against the Government arising under this contract, other than any claims the Contractor specifically excepts, in stated amounts, from operation of this release.
(End of clause)
Alternate I (Apr 1984). If the contracting officer determines that the Government shall retain all material resulting from the dismantling or demolition work, delete paragraph (d) from the basic clause and renumber the remaining paragraphs.