52.241-12
Nonrefundable, Nonrecurring Service Charge
If a utility contractor’s established rules require a one-time, nonrefundable fee to start service or support construction, the contract must clearly state the charge, amount, and payment schedule before the Government pays it.
Overview
- FAR 52.241-12 is a utility-services clause used when a contractor’s tariff, rules, or regulations require a customer to pay a nonrefundable, nonrecurring service charge to begin or obtain service.
- Its purpose is to expressly authorize the Government to pay this one-time charge when it applies to utility service arrangements covered by the contract.
Key Rules
- Payment of one-time service charges
- The Government will pay a nonrefundable, nonrecurring charge if the contractor requires customers to pay for initiation of service, a contribution in aid of construction, or a nonrefundable membership fee.
- Relationship to connection charges
- The charge may be assessed in addition to or instead of a connection charge, depending on the contractor’s governing rules and rate structure.
- Contract schedule insertion
- The clause requires the contract schedule to identify the specific purpose of the charge, the dollar amount, and the dates or payment schedule.
Responsibilities
- Contracting Officers: Insert the clause when prescribed by FAR 41.501(d)(6) and complete the blanks for the charge description, amount, and payment timing.
- Contractors: Apply only those nonrefundable, nonrecurring charges required by their established rules and regulations.
- Agencies: Ensure the charge is properly documented in the contract and paid according to the stated schedule.
Practical Implications
- This clause exists to handle utility-related upfront charges that are not recurring monthly service costs.
- It helps avoid disputes by clearly stating when the Government will pay these one-time fees.
- A common pitfall is failing to document the exact charge type, amount, or payment schedule in the contract.