SECTION II. GENERAL INSTRUCTIONS DATES Spaces are provided in the heading of Section 11 for the entry of two dates. In the first space, enter the date of the first incurrence of costs of performance of the kind eligible for progress payments under the contract. In the second space, enter the date through which auch costs have been accumulated for inclusion in this request and are therefore shown individually, as applicable item entries in Sections II and III.

LIMITED COSTS BASIS- Cenain contracts limit the progress payment base to incurred costs of direct labor and/or direct material or other specified costa which are less than incurred "Total costs". When the contract includes such limitations only those costs eligible for progress payments under contract are to be identified and reported in Section U.

TOTAL COST BASIS Certain contracts provide that the peograds pay base will be total incurred costs. In such cases to princlude ful penses incurred for performance of the contract hicmare reasonagle, al cable to the contract, consistent with sound and geocally acepted account. ing principles and practices, and which are not otheuded by the contract. (For exclusions, see the progress payment clause of the contract.)

MANUFACTURING AND PRODUCTION EXPENSE: GENERAL AND ADMINIS. TRATIVE EXPENSE Under certain conditions, eligible incurred costs include manufacturing and production expenses and general and administrative expenses which have been incurred for performance of the contract which are reasonable, allocable to the contract, and consistent with sound and gen erally accepted accounting principles and practices.

(NOTE: In connection with the first progress payment request on a contract, attach an explanation of the method, basea and period used in delennining the amount of each of these two types of expenses. It the method, bases or periods used for computing these expenses differ in subsequent requests for progress payments under the contract, attach an explanation of auch changes to the progress payment re quest involved.)

INCURRED COSTS INVOLVING SUBCONTRACTORS if the incurred costs eligible for progress payments under the contract include costs shown on invoices of subcontractors, suppliers and others that portion of the costs computed on the basis of such invoices can only include costs for: (1) completed work to which the prime contractor has acquired title; (2) materi als delivered to which the prime contractor has acquired title; (3) services rendered; and (4) costs billed under cost reimbursement or time and mareri al subcontracts for work to which the prime contractor has acquired title.

ITEM 7-1. If applicable, enter the race used in computing general and administrative expenses and the computed dollar amount.

ITEM 7-4 Self-explanatory.

ITEM & Enter the percentage figure for progress payments stated in the contract (Paragraph (a) (1) (1) of the uniform progress payment clause) and the computed dollar amount based on that percentage, i.e., the com puted dollar amount of the entry in Item 7g.

ITEMS AND 10 Make no entry unless the contract requires progress payments to the contractor on account of progress payments to subcontractors. Include only progress payments on subcontracts which sonlom to the progress payment provisions of the prime contract.

ITEM 9. Enter only progress payments actually paid.

ITEM 9 b. Enter total progress payments recouped from subcontractors. ITEM 9. c. Self-explanatory.

ITEM 9. d. Make no entry unless the prime contract specifies progress payments on account of unpaid subcontract progress payment billing which have been approved for current payment in the ordinary course of business. Include only such approved unpaid invoices.

ITEN 10 Self-explanatory.

ITEM 11 Self-explanatory.

ITEM 11b Enter the percentage stated in the contract which limits aggregate progress payments (Paragraph (a) (4) of the uniform progrese payment clause) which can be made and compute the dollar amount based on that percentage, i.e., the computed dollar amount of the entry in item 3a.

ITEM 11c Self-explanatory.

ITEMS 12 AND 13 Self-explanatory.

SECTION III GENERAL INSTRUCTIONS This section is to be com pleted only when specifically requested by Government personael re sponsible for administration of the contract. Completion of this sec tion will be requested when the rate or quality of contract performance is not saietsryhen there is reason to believe that: (•) the comma involve pa to the contractor; or (b) insufficient costs bera allocated delivered items; or (c) outstanding progress payfair value of the work accomplished on the undelivered cort of the contract or (2) the applicable percentage of allocated to unfinished work.

SECTION III SPECIFIC INSTRUCTIONS

ITEM 14 Of the costs reported in Item 7g, compure and enter only costs which are applicable to items delivered, invoiced and accepted to the applicable date. In order of preference, these costs are so be computed on the basis of one of the following: (a) the actual unit cost of items delivered, giving proper consideration to the deferment of the starting load costs; (b) projected unit costs (based on experienced costa, plus estimated costs to complete the contract), where the contractor maintains cost data which will clearly establish the reliability of such estimates; and (c) the total contract price of items delivered. ITEM IS Self-explanatory.

ITEM 16 Enter the percentage stated in the contract limiting unliquideted progress payments in relation to eligible coms (Paragraph (a)(3)(i) of the uniform progress payment clause). Compute and enter the dollar amount based on that percentage, i.e., the percentage of the entry in icem 15.

ITEM 17 Enter the total billing price, as adjusted, of items delivered, accepted and invoiced to the applicable date.

ITEMS 18 AND 19 Self-explanatory.

ITEM 20. This entry is to be completed from the contractor's records. It is the total of all amounts which have been or are to be applied from previous billings to reduce outstanding progress payments, including amounts, if any, of paymears OTHER than those applied from previous billings. (NOTE: If the entry includes reductions effected by means other than through previous billinge, attach a statement showing details thereol.)

ITEM 21 Self-explanatory.

ITEM 22... Self-explanatory.

ITEM 22 b. Enter the percentage stated in the contract, limiting un liquidated progress payments to that percentage of the contract price of items which have not been delivered and accepted (Paragraph (a)(3)(i)) of the unilom progress payment clause).

ITEM 22 c Self-explanatory. (NOTE: If the entry in this item is less then the entry in item 21, there has been an overpayment which requires adjustment.)

ITEM 23 Self-explanatory.

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. § 1-30.702

as

Conditions governing 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 shall 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-Assignment 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 contract provides for payments aggregating $1,000 or more, claims for moneys due or to become due the Contractor from the Government under this contract may be assigned to a 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 Services 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 similar documents relating to work under this contract, if marked "Top Secret," "Secret,"

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 Office, and address), for (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

(Name of addressee of this notice)

§ 1-30.705 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.

(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.

(c) The assignment covers all 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 ad

vance payments have actually been made to the contractor, notice of assignment shall not be acknowledged unless:

(i) 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 assignments 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.