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Subpart 1–30.6 [Reserved)
Subpart 1-30.7-Assignment of

Claims
$ 1–30.700 Scope of subpart.

This subpart prescribes the policies and procedures relating to the assignment of claims of money due or to become due under Government contracts. § 1-30.701 General.

The Assignment of Claims Act of 1940, as amended, 54 Stat. 1029, 65 Stat. 41 (31 U.S.C. 203, 41 U.S.C. 15), hereafter referred to in this Subpart 1-30.7 as the Act, permits the assignment to a bank, trust company, or other financing institution, including any Federal lending agency of moneys due or to become due from the United States under a contract providing for payments aggregating $1.000 or more, provided the conditions specified in the Act, as set forth in § 1-30.702, are met. The Act further provides that an assignee receiving payment under an assignment is not, by reason of any liability of the assignor to the United States or any department or agency thereof, whether arising from or Independently of the assigned contract, obligated or liable to make restitution, refund or repayment to the United States. Also, under the Act, the contracts of certain specified agencies, and other agencies designated by the President, may in time of war or national emergency, provide that payments made thereunder to an assignee shall not be subject to reduction or set-off for any liability of the assignor arising independently of the assigned contract. 8 1-30.702 Conditions governing ag.

signment of claims. Moneys due or to become due from the United States, or any agency or department thereof under a contract, may be assigned under the following conditions:

(a) The contract provides for payments aggregating $1,000 or more;

(b) The payments are assigned to a bank, trust company, or other financing institution, including any Federal lending agency;

(c) The contract does not forbid assignment;

(d) Unless otherwise expressly permitted by the contract any assignment shåll cover all amounts payable under the contract and not already paid, shall not be made to more than one party, and

shall not be subject to further assignment, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing; and

(e) That in the event of any assignment, the assignee shall file written notice of the assignment, together with a true copy of the instrument of assignment with (1) the contracting officer or the head of his department or agency; (2) the surety or sureties upon the bond or bonds, if any, in connection with the assigned contract; and (3) the disbursing officer, if any, designated in the assigned contract to make payment. § 1-30.703 Contract clause-Assign

ment of Claims. The following clause shall be inserted in all contracts except it is not required to be used in construction contracts estimated not to exceed $10,000:

ASSIGNMENT OF CLAIMS (a) Pursuant to the provisions of the Assignment of Claims Act of 1940, as amended (31 U.S.C. 203, 41 U.S.C. 15), if this contraot provides for payments aggregating 81,000 or more, claims for moneys due or to become due the Contractor from the Government under this contract may be assigned to & bank, trust company, or other financing institution, including any Federal lending agency, and may thereafter be further assigned and reassigned to any such institution. Any such assignment or reassignment shall cover all amounts payable under this contract and not already paid, and shall not be made to more than one party, except that any such assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in such financing. Unless otherwise provided in this contract, payments to assignee of any moneys due or to become due under this contract shall not, to the extent provided in said Act, as amended, be subject to reduction or setoff. (The preceding sentence applies only if this contract is made in time of war or national emergency as defined in said Act and is with the Department of Defense, the General Seryices Administration, the Atomic Energy Commission, the National Aeronautics and Space Administration, the Federal Aviation Agency, or any other department or agency of the United States designated by the President pursuant to Clause 4 of the proviso of section 1 of the Assignment of Claims Act of 1940, as amended by the Act of May 15, 1951, 65 Stat. 41.)

(b) In no event shall copies of this contract or of any plans, specifications, or other simllar documents relating to work under this contract, 11 marked “Top Secret," "Secret," ACKNOWLEDGMENT Receipt is hereby acknowledged of the above notice and a copy of the above-mentioned instrument of assignment. These were received at -------- a.m. (p.m.) on

-------, 19---

(Signature)

(Title)

On behalf of

or "Confidential,” be furnished to any assignee of any claim arising under this contract or to any other person not entitled to receive the same. However, a copy of any part or all of this contract so marked may be furnished, or any information contained therein may be disclosed, to such assignee upon the prior written authorization of the Contracting Officer. The last two sentences of paragraph (a) of the foregoing clause shall be deleted from contracts entered into with foreign contractors and may, in accordance with agency procedures, be deleted in other cases where special circumstances make it advisable in the best interests of the Government. § 1-30.704 Forms for assignment and

notice of assignment. There are no forms prescribed for use as an instrument of assignment or as a notice of assignment; however, the following is a suggested format for use by the assignee in providing the notice of the assignment as required by § 1-30.702 (e).

NOTICE OF ASSIGNMENT

Date ----------To: (Address to one of the parties specified

in $ 1-30.702(e)) This has reference to Contract No. dated ---------, entered into between (contractor's name and address) and (Government Agency, Name of Ofice, and address), lor (describe nature of the contract).

PLEASE TAKE NOTICE that moneys due or to become due under the contract described above have been assigned to the undersigned pursuant to the provisions of the Assignment of Claims Act of 1940, as amended, 54 Stat. 1029; 65 Stat. 41 (31 U.S.C. 203, 41 U.S.C. 15).

A true copy of the instrument of assignment executed by the contractor on -------

(Date) is attached to the original hereoi.

Payments due or to become due after such contract should be made to the undersigned assignee.

Please return to the undersigned the three enclosed copies of this notice with appropriate notations showing the date and hour of receipt. and duly signed by the person

Receipt is hereby acknowledged of the addressee.

very truly yours.

(Name of addressee of this

notice) 81-30.705 Filing notice of assignment

and the instrument of assignment. The assignee should address a notice of assignment to each of the parties specified in § 1-30.702(e) and file with each party four signed copies of the notice, together with one true copy of the instrument of assignment (a certified true duplicate or a photostatic copy of the original). If a disbursing officer is not designated in the contract to make payment, it is not necessary that the notice be filed with any agency or department official other than the contracting officer or the head of his department or agency. § 1-30.706 Procedures upon receipt of

notice of assignment and instrument

of assignment. (a) Upon receipt of the four copies of notice of assignment, together with a true copy of the instrument of assignment, by an agency official other than the contracting officer such assignment documents should be immediately forwarded to the appropriate contracting officer of the procuring activity who should, in accordance with agency procedures:

(1) Notify the appropriate certifying or disbursing officer by memorandum of the pending assignment, and subsequently of its acknowledgment or refusal and return.

(2) Examine the notice of assignment and instrument of assignment, and the contract involved to determine that the assignment is in proper form, has been properly executed and that the contractor is empowered under the contract to make the assignment. The details concerning examination of the assignment documents are set forth in § 1-30.708.

(3) If satisfied that the assignment is in proper form, acknowledge receipt of the notice of the assignment in the space provided thereon and return three copies to the assignee.

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(4) Provide the fourth copy of the due or to become due under a contract, notice of assignment duly acknowledged upon receipt of an advance notice of and the true copy of tlie instrument of award, even though the contract has assignment for filing with the contract. neither been executed nor approved. In

(b) If, for any reason, the assignment such cases, the copies cf notices of such is one which the contract does not au- assignment should be immediately rethorize the contractor to make, or is turned to the assignee unacknowledged. not in proper form, or is not properly (b) The contract is one under which executed, the contracting officer should claims may be assigned under the provireturn the copies of the notice of assign sions of the Act. In rare cases, SECRET ment and the copy of the instrument of or CONFIDENTIAL contracts will conassignment to the assignee with an ex- tain provisions prohibiting assignment of planation of the objections to the pro claims thereunder. It should be noted posed assignment. The acknowledge that assignment of claims under SEment form on the notice of assignment CRET or CONFIDENTIAL contracts, should not be executed If, upon receipt permitting the assignment thereof, of the notice of assignment and a copy of should not be acknowledged by contractthe instrument of assignment, it appears ing officers until adequate steps have that considerable delay may occur be- been taken to protect the interest of the fore the notice of assignment can be Government. acknowledged or returned unacknowl (c) The assignment covers all edged, as the case may be, the contract amounts payable under the contract, and ing officer should advise the assignee that not already paid, and is not made to such a delay is likely to occur and should more than one person, and the assignee normally furnish the assignee a state is a bank, trust company, or other financment of the reasons for the delay.

ing institution, including any Federal

lending agency. In this connection the & 1-30.707 Further assignments and re.

following should be noted: assignments.

(1) Most contracts provide (see clause Contracts permitting the assignment prescribed in § 1-30.703) that any asof claims for moneys due or to become signment of claims thereunder shall due thereunder also permit, under the cover all amounts payable under the conclause prescribed in $ 1-30.703, such tract, and not already paid, and shall not claims to be further assigned and reas bę made to more than one party, except signed by the assignee to another bank. that assignment may be made to one trust company, or other financing insti party as agent or trustee for two or more tution, including any Federal lending parties participating in the financing of agency. Copies of a written notice of a contractor. However, under the Asfurther assignment and reassignment

signment of Claims Act there is authority and the copy of the instrument of such

.for a contract to embody terms. perfurther assignment and reassignment

mitting assignment of only a part of the should be processed in the same manner

contractor's claims for moneys due or to as copies to the initial notice of assign

become due, permitting assignment to ment and instrument of initial assign

more than one person. In the absence ment. The three acknowledged copies of

of contract provisions specifically authe notice of further assignment or re

thorizing such types of assignment, the assignment will be sent to the new as

assignments are unlawful. Because of signee designated under the assignment

the administrative burden on accountthus acknowledged.

ing and finance officers, partial assign

ments or assignments to more than one § 1-30.708 Examination of assignment. person, if permitted under a contract,

In ascertaining that an assignment is should ordinarily be limited to cases in proper form, is properly executed, and where it is in the interest of the Governis one that the contractor is entitled to ment to do so, e.g., where the contractor make under the contract, contracting of is financially obligated to Government ficers should satisfy themselves that: agencies and the assignment is made for

(a) The contract has been duly ex- protection of such Government agencies. ecuted and approved where necessary (2) Where the contract provides for (see § 1-2.407). Contractors frequently advance payments, whether or not admake assignments of claims for moneys vance payments have actually been made to the contractor, notice of assignment board of directors authorizing the represhall not be acknowledged unless:

sentative involved to execute the assign(1) The assignment expressly recites ment. that the rights of the assignee are sub (2) If the contractor is a partnership, ordinate to the rights of the Govern the instrument of assignment may be ment;

signed by one partner, provided it is (A) To withhold from the contractor accompanied by a duly acknowledged amounts required to liquidate advance certificate to the effect that the signer is payments; and

a general partner of the partnership. (B) To have deposited in the con (3) If the contractor is an individual, tractor's special advance payment bank the assignment must be signed by such account (see $ 1-30.414) all moneys pay- individual and duly acknowledged by able to the contractor which the contract him before a notary public or other perrequires the contractor to deposit in that son authorized to administer oaths. account; and

(e) If there have been previous assign(11) The contracting officer obtains ments of claims under the contract, unfrom the assignee an agreement that the less assignments to more than one perassignee will pay to the contractor all son thereunder are permitted by the conamounts which may be received by the tract provisions, the previous assignassignee and which the contractor is ments have been fully released. Note obligated by the contract to deposit in its that further assignment and reassignspecial advance payment bank account.

ment is authorized as pointed out in In special cases, additional documents $ 1-30.707. : signed by the contractor, or the assignee,

§ 1-30.709 Release of assignment. or both, thought necessary by the contracting officer to protect the interests

The release of an assignment is reof the Government against the assignee,

quired whenever there has been a further may be required by the contracting reassignment or where further payments officer.

to the contractor are anticipated under

the contract after the contractorAssignments such as those referred to in

assignor's obligation to the original asthis $ 1-30.708(c) (2) are subordinate to

signee has been satisfied. the rights of the Government against the contractor under the contract involved.

§ 1-30.710 Transfers of businesses and For the foregoing reason such assign

corporate mergers. ments are not considered to be assign Transfers of an entire business, corments of less than all amounts payable porate mergers, and assignments by under the contract nor assignments to operation of law, each of which may afmore than one person.

fect the assignment of claims under a (d) The assignment shall cover only contract, are not prohibited by the Fedclaims for moneys due or to become due eral statutes and hence do not depend under the contract involved. It must upon the Assignment of Claims Act of not cover any of the obligations or duties 1940, as amended, for their validity. of the contractor under the contract. However, in the case of transfers of a The contracting officer shall be sure that business or corporate mergers, notices of the copy of the instrument of assignment assignment of claims under the contract which is submitted to him is a duplicate made by the transferee or successor corof the original instrument, or has been poration should not be acknowledged certified as a true copy, acknowledged as until the transferee or successor corsuch before a notary public or other poration involved has been recognized officer authorized by law to administer by the procuring agency as the lawful oaths. Care shall also be taken to ascer successor in interest to the Government tain that the assignment has been contract. Similarly, before acknowledgproperly executed.

ing an assignment made by a party who (1) Assignments by corporations is a transferee by operation of law, the should be executed by an authorized contracting officer should require the representative, attested by the secretary submission of a certified copy of the docor assistant secretary of the corporation, ument evidencing the transfer by opwith the seal of the corporation im eration of law. Detailed procedures covpressed upon the assignments or in lieu ering novation agreements are set forth of such seal, accompanied by a certified in Subpart 1-26.4. copy of a resolution of the corporation (38 FR 32810, Nov. 28, 1973)

CHAPTER 2-[RESERVED]

Note: Chapter 2 was deleted at 35 F.R. 12542, Aug. 6. 1970.

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