52.237-5 Payment by Contractor to Government
Source: FAR 52.237-5 on acquisition.gov
Contractors must pay the Government and promptly remove acquired property when receiving title under dismantling or demolition contracts, following strict payment and removal procedures.
Overview
FAR 52.237-5 establishes requirements for contracts involving the dismantling, demolition, or removal of improvements where the contractor receives title to the property and owes a net payment to the Government. This clause ensures that the transfer of property, payment obligations, and removal procedures are clearly defined to protect the Government’s interests and clarify contractor responsibilities.
Key Rules
- Transfer of Title
- The contractor receives title to all property to be dismantled, demolished, or removed (unless specified otherwise) upon notice of award or notice to proceed (if a performance bond is required).
- Removal of Property
- Contractors must promptly remove acquired property from the site and cannot store it beyond the contract completion date unless written permission is granted by the Contracting Officer.
- Payment to Government
- Contractors must pay the specified amount to the Government within the stated timeframe after notice of award and before starting work. Payment instructions and deadlines are detailed in the contract schedule.
Responsibilities
- Contracting Officers: Must ensure the clause is included in applicable contracts, specify payment amounts and deadlines, and manage requests for property storage.
- Contractors: Must pay the Government as required, promptly remove property, and comply with title transfer and waiver conditions if property is left on site.
- Agencies: Oversee compliance with payment, property removal, and title transfer provisions.
Practical Implications
- This clause protects the Government’s financial and property interests during demolition or removal contracts. Contractors must be diligent about payment, property removal, and understanding when title transfers. Delays or non-compliance can result in loss of rights to property or contract disputes.
As prescribed in 37.304(b), insert the following clause in solicitations and contracts for dismantling, demolition, or removal of improvements whenever the contractor is to receive title to dismantled or demolished property and a net amount of compensation is due to the Government, except if the contracting officer determines that it would be advantageous to the Government for the contractor to pay in increments and the Government to transfer title to the contractor for increments of property only upon receipt of those payments:
Payment by Contractor to Government (Apr 1984)
(a) The Contractor shall receive title to all property to be dismantled, demolished, or removed under this contract and not specifically designated in the Schedule 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, upon the Government’s issuing 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.
(b) The Contractor shall promptly remove from the site all property acquired by the Contractor. The Government shall not permit storage of property on the site beyond the completion date. 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 of the granting of the permission, the Contractor agrees to waive any right, title, claim, or interest in and to the property.
(c) The Contractor shall perform the work called for under this contract and within ________ days of receipt of notice of award, unless otherwise provided in the Schedule and before proceeding with the work, shall pay _________ [fill in amount]. Checks shall be made payable to the office designated in the contract and shall be forwarded to the Contracting Officer.
(End of clause)