52.237-4
Payment by Government to Contractor
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.