52.241-13
Capital Credits
If a utility cooperative owes capital credits on a Government contract, the contractor must track them, report them in writing by contract/year/delivery point, and remit payment exactly as directed by the Contracting Officer.
Overview
- FAR 52.241-13, Capital Credits is a utility-related clause used when the Government is a member of a cooperative and is entitled to receive capital credits under that cooperative’s bylaws.
- Its purpose is to ensure the Government receives, tracks, and properly applies capital credits that accrue under the contract.
Key Rules
- Government entitlement to capital credits
- The clause states that the Government, as a cooperative member, is entitled to capital credits on the same basis as other members, consistent with the cooperative’s bylaws.
- Periodic reporting of accrued credits
- The contractor must provide the Contracting Officer, or a designated representative, a written list of accrued credits at the interval specified in the contract.
- The report must identify credits by contract number, year, and delivery point.
- Method of payment
- Capital credits must be paid by check made payable to the named agency and sent to the Contracting Officer at the address stated in the contract, unless the Contracting Officer provides different written instructions.
- Each check must reference the current or last contract number and state whether it is a partial or final payment.
Responsibilities
- Contracting Officers: insert the clause with the cooperative name, reporting period, agency name, and payment address; receive reports and payments; provide alternate written instructions if needed.
- Contractors: track accrued capital credits and submit required written reports and payments accurately.
- Agencies: ensure credits are properly identified, received, and applied.
Practical Implications
- This clause exists to prevent capital credits from being overlooked when utility services are provided through cooperatives.
- Contractors should maintain clear accounting records tied to each contract and delivery point.
- Common pitfalls include incomplete reporting, failing to cite the contract number on checks, and sending payment to the wrong payee or address.