52.237-5
Payment by Contractor to Government
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.