52.237-6 Incremental Payment by Contractor to Government
Source: FAR 52.237-6 on acquisition.gov
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.
As prescribed in 37.304(c), insert the following clause in solicitations and contracts for dismantling, demolition, or removal of improvements (a) if the Contractor is to receive title to dismantled or demolished property and a net amount of compensation is due the Government; and (b) if the Contracting Officer determines that it would be advantageous to the Government for the Contractor to pay in increments, and for the Government to transfer title to the Contractor for increments of property, only upon receipt of those payment:
Incremental Payment by Contractor to Government (Apr 1984)
(a) 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]. Thereafter, the Contractor shall make payment to the Government in the amount and frequency specified in the Schedule. Checks shall be made payable to the office designated in the contract and shall be forwarded to the Contracting Officer.
(b) Upon the Government’s receipt of each increment of payment, the Contractor shall receive title to such property as the Contracting Officer determines to be fair and reasonable for that increment of payment. Upon receipt of the Contractor’s final payment, all title that has not passed to the Contractor shall vest in the Contractor, unless specifically designated in the Schedule as being retained by the Government. The Government shall not be responsible for the condition of, or any loss or damage to, the property.
(c) The Contractor shall promptly remove from the site all property acquired by the Contractor. The Government will 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 this permission, the Contractor agrees to waive any right, title, claim, or interest in and to the property.
(End of clause)