(4) Provide the fourth copy of the notice of assignment duly acknowledged and the true copy of the instrument of assignment for filing with the contract.

(b) If, for any reason, the assignment Is one which the contract does not authorize the contractor to make, or is not in proper form, or is not properly executed, the contracting officer should return the copies of the notice of assignment and the copy of the instrument of assignment to the assignee with an explanation of the objections to the proposed assignment. The acknowledgment form on the notice of assignment should not be executed. If, upon receipt of the notice of assignment and a copy of the instrument of assignment, it appears that considerable delay may occur before the notice of assignment can be acknowledged or returned unacknowledged, as the case may be, the contracting officer should advise the assignee that such a delay is likely to occur and should normally furnish the assignee a statement of the reasons for the delay.

§ 1-30.707 Further assignments and reassignments.

Contracts permitting the assignment of claims for moneys due or to become due thereunder also permit, under the clause prescribed in § 1-30.703, such claims to be further assigned and reassigned by the assignee to another bank. trust company, or other financing institution, including any Federal lending agency. Copies of a written notice of further assignment and reassignment and the copy of the instrument of such further assignment and reassignment should be processed in the same manner as copies to the initial notice of assignment and instrument of initial assignment. The three acknowledged copies of the notice of further assignment or reassignment will be sent to the new assignee designated under the assignment thus acknowledged.

§ 1-30.708 Examination of assignment. In ascertaining that an assignment is in proper form, is properly executed, and is one that the contractor is entitled to make under the contract, contracting officers should satisfy themselves that:

(a) The contract has been duly executed and approved where necessary (see § 1-2.407). Contractors frequently make assignments of claims for moneys

due or to become due under a contract, upon receipt of an advance notice of award, even though the contract has neither been executed nor approved. In such cases, the copies of notices of such assignment should be immediately returned to the assignee unacknowledged

(b) The contract is one under which claims may be assigned under the provisions of the Act. In rare cases, SECRET or CONFIDENTIAL contracts will contain provisions prohibiting assignment of claims thereunder. It should be noted that assignment of claims under SECRET or CONFIDENTIAL contracts, permitting the assignment thereof, should not be acknowledged by contracting officers until adequate steps have been taken to protect the interest of the Government.

all

(c) The assignment covers amounts payable under the contract, and not already paid, and is not made to more than one person, and the assignee is a bank, trust company, or other financing institution, including any Federal lending agency. In this connection the following should be noted:

(1) Most contracts provide (see clause prescribed in § 1-30.703) that any assignment of claims thereunder shall cover all amounts payable under the contract, and not already paid, and shall not be made to more than one party, except that assignment may be made to one party as agent or trustee for two or more parties participating in the financing of a contractor. However, under the Assignment of Claims Act there is authority for a contract to embody terms permitting assignment of only a part of the contractor's claims for moneys due or to become due, permitting assignment to more than one person. In the absence of contract provisions specifically authorizing such types of assignment, the assignments are unlawful. Because of the administrative burden on accounting and finance officers, partial assignments or assignments to more than one person, if permitted under a contract. should ordinarily be limited to cases where it is in the interest of the Government to do so, e.g., where the contractor is financially obligated to Government agencies and the assignment is made for protection of such Government agencies.

(2) Where the contract provides for advance payments, whether or not advance payments have actually been made

to the contractor, notice of assignment shall not be acknowledged unless:

(1) The assignment expressly recites that the rights of the assignee are subordinate to the rights of the Government;

(A) To withhold from the contractor amounts required to liquidate advance payments; and

(B) To have deposited in the contractor's special advance payment bank account (see § 1-30.414) all moneys payable to the contractor which the contract requires the contractor to deposit in that account; and

(ii) The contracting officer obtains from the assignee an agreement that the assignee will pay to the contractor all amounts which may be received by the assignee and which the contractor is obligated by the contract to deposit in its special advance payment bank account. In special cases, additional documents signed by the contractor, or the assignee, or both, thought necessary by the contracting officer to protect the interests of the Government against the assignee, may be required by the contracting officer.

Assignments such as those referred to in this 1-30.708 (c) (2) are subordinate to the rights of the Government against the contractor under the contract involved. For the foregoing reason such assignments are not considered to be assignments of less than all amounts payable under the contract nor assignments to more than one person.

(d) The assignment shall cover only claims for moneys due or to become due under the contract involved. It must not cover any of the obligations or duties of the contractor under the contract. The contracting officer shall be sure that the copy of the instrument of assignment which is submitted to him is a duplicate of the original instrument, or has been certified as a true copy, acknowledged as such before a notary public or other officer authorized by law to administer oaths. Care shall also be taken to ascertain that the assignment has been properly executed.

(1) Assignments by corporations should be executed by an authorized representative, attested by the secretary or assistant secretary of the corporation, with the seal of the corporation impressed upon the assignments or in lieu of such seal, accompanied by a certified copy of a resolution of the corporation

board of directors authorizing the representative involved to execute the assignment.

(2) If the contractor is a partnership, the instrument of assignment may be signed by one partner, provided it is accompanied by a duly acknowledged certificate to the effect that the signer is a general partner of the partnership.

(3) If the contractor is an individual, the assignment must be signed by such individual and duly acknowledged by him before a notary public or other person authorized to administer oaths.

(e) If there have been previous assignments of claims under the contract, unless assignments to more than one person thereunder are permitted by the contract provisions, the previous assignments have been fully released. Note that further assignment and reassignment is authorized as pointed out in § 1-30.707.

§ 1-30.709 Release of assignment.

The release of an assignment is required whenever there has been a further reassignment or where further payments to the contractor are anticipated under the contract after the contractorassignor's obligation to the original assignee has been satisfied.

§ 1-30.710 Transfers of businesses and

corporate mergers.

Transfers of an entire business, corporate mergers, and assignments by operation of law, each of which may affect the assignment of claims under a contract, are not prohibited by the Federal statutes and hence do not depend upon the Assignment of Claims Act of 1940, as amended, for their validity. However, in the case of transfers of a business or corporate mergers, notices of assignment of claims under the contract made by the transferee or successor corporation should not be acknowledged until the transferee or successor corporation involved has been recognized by the procuring agency as the lawful successor in interest to the Government contract. Similarly, before acknowledging an assignment made by a party who is a transferee by operation of law, the contracting officer should require the submission of a certified copy of the document evidencing the transfer by operation of law. Detailed procedures covering novation agreements are set forth in Subpart 1-26.4.

[38 FR 32810, Nov. 28, 1973]