52.241-12 Nonrefundable, Nonrecurring Service Charge
Source: FAR 52.241-12 on acquisition.gov
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.
As prescribed in 41.501(d)(6), insert a clause substantially the same as the following:
Nonrefundable, Nonrecurring Service Charge (Feb 1995)
As provided herein, the Government will pay a nonrefundable, nonrecurring charge when the rules and regulations of a Contractor require that a customer pay (1)a charge for the initiation of service, (2)a contribution in aid of construction, or (3)a nonrefundable membership fee. This charge may be in addition to or in lieu of a connection charge. Therefore, there is hereby added to the Contractor’s schedule a nonrefundable, nonrecurring charge for ___________ in the amount of $________ dollars payable .[specify dates or schedules]
(End of clause)