52.241-12
Nonrefundable, Nonrecurring Service Charge
FAR 52.241-12 requires explicit contract documentation and payment of nonrefundable, one-time utility service charges when mandated by the contractor's rules.
Overview
FAR 52.241-12 addresses the payment of nonrefundable, nonrecurring service charges by the Government when acquiring utility services. This clause is used when a contractor's rules require customers to pay charges such as initiation fees, contributions in aid of construction, or nonrefundable membership fees. The clause allows these charges to be added to the contractor’s schedule and specifies that they are payable by the Government, either in addition to or instead of a connection charge. The specific type of charge, amount, and payment schedule must be clearly stated in the contract.
Key Rules
- Nonrefundable, Nonrecurring Charges
- The Government agrees to pay certain one-time charges required by the contractor for starting or establishing utility service.
- Types of Charges Covered
- Includes initiation of service fees, contributions in aid of construction, and nonrefundable membership fees.
- Contract Schedule Inclusion
- The charge must be explicitly added to the contractor’s schedule, with the type, amount, and payment timing specified.
Responsibilities
- Contracting Officers: Must ensure the clause is included when applicable and that all details (type, amount, payment schedule) are specified.
- Contractors: Must clearly identify and justify the nonrefundable, nonrecurring charges in their schedule.
- Agencies: Should verify that such charges are legitimate and in accordance with contractor rules and regulations.
Practical Implications
- This clause ensures transparency and proper authorization for one-time utility service charges, preventing disputes over unexpected fees.
- Contractors must be clear and upfront about any such charges, and contracting officers must document them in the contract.
- Common pitfalls include failing to specify the charge or payment schedule, leading to payment delays or disputes.