52.237-6
Incremental Payment by Contractor to Government
Contractors must make incremental payments to the Government to receive title to dismantled property, with strict requirements for payment, property removal, and waiver of claims if property is left on site.
Overview
FAR 52.237-6, "Incremental Payment by Contractor to Government," applies to contracts for dismantling, demolition, or removal of improvements where the contractor receives title to property and owes a net payment to the Government. This clause allows for incremental payments by the contractor, with title to property transferred in increments as payments are made. The process ensures that the Government retains control over property until payment is received, and outlines the contractor's obligations for payment, property removal, and waiver of claims if property is left on site.
Key Rules
- Incremental Payment Requirement
- Contractors must make an initial payment before starting work and continue making payments as specified in the contract schedule.
- Title Transfer Linked to Payment
- Title to property is transferred incrementally as payments are received; final title passes upon final payment unless otherwise specified.
- Property Removal and Waiver
- Contractors must promptly remove acquired property; if left on site with permission, all rights to the property are waived.
Responsibilities
- Contracting Officers: Specify payment amounts, frequency, and property increments; ensure proper title transfer and compliance.
- Contractors: Make timely payments, remove property promptly, and comply with waiver provisions if property is left on site.
- Agencies: Oversee payment and title transfer process, enforce removal and waiver requirements.
Practical Implications
- This clause protects the Government’s financial and property interests during dismantling or demolition contracts.
- Contractors must carefully track payment schedules and property removal deadlines to avoid forfeiting rights or breaching contract terms.
- Common pitfalls include late payments, failure to remove property, or misunderstanding title transfer provisions.