assignment of claims act far

FAC Number: 2023-01 Effective Date: 12/30/2022

52.232-23 Assignment of Claims.

As prescribed in 32.806 (a)(1) , insert the following clause:

Assignment of Claims ( May 2014)

(a) The Contractor, under the Assignment of Claims Act, as amended, 31 U.S.C.3727 , 41 U.S.C.6305 (hereafter referred to as "the Act"), may assign its rights to be paid amounts due or to become due as a result of the performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency. The assignee under such an assignment may thereafter further assign or reassign its right under the original assignment to any type of financing institution described in the preceding sentence.

(b) Any assignment or reassignment authorized under the Act and this clause shall cover all unpaid amounts payable under this contract, and shall not be made to more than one party, except that an assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in the financing of this contract.

(c) The Contractor shall not furnish or disclose to any assignee under this contract any classified document (including this contract) or information related to work under this contract until the Contracting Officer authorizes such action in writing .

(End of clause)

Alternate I ( Apr 1984) . If a no-setoff commitment is to be included in the contract (see 32.801 and 32.803 (d)), add the following sentence at the end of paragraph (a) of the basic clause:

Unless otherwise stated in this contract, payments to an assignee of any amounts due or to become due under this contract shall not, to the extent specified in the Act, be subject to reduction or setoff.

Definitions

FAC Changes

ACQUISITION.GOV

An official website of the General Services Administration

Skip to Main Content - Keyboard Accessible

48 cfr subpart 32.8 - assignment of claims.

The following state regulations pages link to this page.

subpart 232.8--assignment of claims

(Revised October 29, 2021)

232.803 Policies. 232.805 Procedure. 232.806 Contract clauses. 232.803 Policies.

(b) Only contracts for personal services may prohibit the assignment of claims.

(d) Pursuant to 41 U.S.C. 6305, and in accordance with Presidential delegation dated October 3, 1995, Secretary of Defense delegation dated February 5, 1996, and Under Secretary of Defense (Acquisition, Technology, and Logistics) delegation dated February 23, 1996, the Director of Defense Procurement determined on May 10, 1996, that a need exists for DoD to agree not to reduce or set off any money due or to become due under the contract when the proceeds under the contract have been assigned in accordance with the Assignment of Claims provision of the contract. This determination was published in the Federal Register on June 11, 1996, as required by law. Nevertheless, if departments/agencies decide it is in the Government's interest, or if the contracting officer makes a determination in accordance with FAR 32.803(d) concerning a significantly indebted offeror, they may exclude the no-setoff commitment.

232.805 Procedure.

(b) The assignee shall forward—

(i) To the administrative contracting officer (ACO), a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The ACO shall acknowledge receipt by signing and dating all copies of the notice of assignment and shall—

(A) File the true copy of the instrument of assignment and the original of the notice in the contract file;

(B) Forward two copies of the notice to the disbursing officer of the payment office cited in the contract;

(D) Advise the contracting officer of the assignment.

(ii) To the surety or sureties, if any, a true copy of the instrument of assignment and an original and three copies of the notice of assignment. The surety shall return three acknowledged copies of the notice to the assignee, who shall forward two copies to the disbursing officer designated in the contract.

(iii) To the disbursing officer of the payment office cited in the contract, a true copy of the instrument of assignment and an original and one copy of the notice of assignment. The disbursing officer shall acknowledge and return to the assignee the copy of the notice and shall file the true copy of the instrument and original notice.

232.806 Contract clauses.

(a)(1) Use the clause at 252.232-7008 , Assignment of Claims (Overseas), instead of the clause at FAR 52.232-23, Assignment of Claims, in solicitations and contracts when contract performance will be in a foreign country.

(2) Use Alternate I with the clause at FAR 52.232-23, Assignment of Claims, unless otherwise authorized under 232.803 (d).

Clause Library

52.232-23 / Alt I

Far 52.232-23 assignment of claims. alt i (apr 1984) (current).

As prescribed in 32.806 (a), (1) The contracting officer shall insert the clause at 52.232-23, Assignment of Claims, in solicitations and contracts expected to exceed the micro-purchase threshold, unless the contract will prohibit the assignment of claims (see 32.803 (b)). The use of the clause is not required for purchase orders. However, the clause may be used in purchase orders expected to exceed the micro-purchase threshold, that are accepted in writing by the contractor, if such use is consistent with agency policies and regulations.

(2) If a no-setoff commitment has been authorized (see 32.803 (d)), the contracting officer shall use the clause with its Alternate I.

Assignment of Claims Alternate I (Apr 1984) (a) The Contractor, under the Assignment of Claims Act, as amended, 31 U.S.C. 3727 , 41 U.S.C. 6305 (hereafter referred to as “the Act”), may assign its rights to be paid amounts due or to become due as a result of the performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency. The assignee under such an assignment may thereafter further assign or reassign its right under the original assignment to any type of financing institution described in the preceding sentence. Unless otherwise stated in this contract, payments to an assignee of any amounts due or to become due under this contract shall not, to the extent specified in the Act, be subject to reduction or setoff. (b) Any assignment or reassignment authorized under the Act and this clause shall cover all unpaid amounts payable under this contract, and shall not be made to more than one party, except that an assignment or reassignment may be made to one party as agent or trustee for two or more parties participating in the financing of this contract. (c) The Contractor shall not furnish or disclose to any assignee under this contract any classified document (including this contract) or information related to work under this contract until the Contracting Officer authorizes such action in writing. (End of clause)

Working with a set of FAR clauses from an RFP or contract ?

Try pasting them into our tool to instantly generate a risk profile , including the basic flow down recommendation.

Works best with Chrome and Edge browsers!

Ask a Professor

Does this fall under the definition of an "Assignment of Claims?" as described in FAR Subpart 32.8? Is the transfer of "claims" intended only for circumstances where there is a "claim" against the government so therefore the assignment of claims (in this scenario) doesn't fit the definitions, conditions, and procedures under FAR Subpart 32.8?

This response is based on the information provided. We suggest you discuss with your contracting team, program manager and/or legal department as appropriate.

This does not fall under FAR subpart 32.8, Assignment of Claims. In The assignment of claims relates to the prime contractor assigning payment due it to a party other than itself that is a bank, trust company, or other financing institution, including any Federal lending agency. The arrangement you are describing is a specific term being negotiated between the prime and one of its subcontractors. There is no pertinent information in the DFARS, AFARS, or AFFARS (we are assuming from the area code the question comes from the USA or USAF).

Please Provide Your Feedback Below

Required fields marked with *

Submitting feedback...

Thank you for your feedback.

Please note that you should expect to receive a response from our team, regarding your inquiry, within 2 business days.

The Federal Assignment of Claims Act defines how lenders or factoring companies can arrange for payments when federal contracts are part of the accounts receivable or loans made to the contractor. Essentially, if the borrower, or the contractor, uses the business's accounts receivable as collateral, then the Federal Assignment of Claims Act guides how the lender may control the collateral.

The Federal Assignment of Claims Act has been a law since the late 1930s, and it was designed to provide a roadmap for contractors working with the government to finance their projects when working on federal or government contracts. Further guiding the assignment process is the Uniform Commercial Code (UCC), which is a set of standards adopted by most of the United States.

A business that purchases goods or services may be required to send payments to a factoring company if the factoring company sends out a notice that the business’s accounts have been sold to the factoring company. Interestingly, a business may receive a Notice of Assignment form an invoice factoring company with which the business had no prior financial relationship.

How Factoring Helps Contractors Bid on Government Contracts

Government contracts represent a competitive arena where making the right bid can make all the difference in securing a contract or being passed over for another company. A contractor must research the costs of the project and ensure that his or her business can complete the project with the amount of money offered for the project's bid.

With the assistance of a government contract receivables financing company , virtually any government contracting company may bid with confidence on a project. Contractors who provide goods or services for fleet vehicles, disposable goods, and legal assistance may benefit as well as companies that provide technical assistance or which are involved in the transport of goods.

When a business must work under federal regulations and the Federal Assignment of Claims Act. There are a variety of benefits offered by government contract receivable financing. Some of those benefits include AR financing, spot factoring , and bridge financing. A contractor may also seek out same-day funding or PO financing , and enjoy industry-low rates and a quick invoice process.

Obtaining a Lucrative Government Contract

One of the reasons a contractor may seek out work with the government is the excellent pay and the reliability of a steady working relationship with the government. The federal government and the local governments around the country represent the largest employer in the United States, and companies that can secure successive government contracts may enjoy a lucrative income with the federal government as their only client.

In addition to providing the necessary funds to begin work on a government contract, the cash from government contract receivables financing may allow a company to hire additional employees for the project, expand the business, and take on additional contracts. The contractor can also buy additional equipment and ensure all invoices are paid on time.

Government Contractor Financing Solutions

Becoming a government contractor can mean that payment isn't always right around the corner. It's common for the government to offer lengthy payment cycles. A contract that requires a lengthy wait for payment may mean a contractor cannot bid on the project because of a lack of current operating cash. Government contract receivables can eliminate this problem and ensure that you can get paid.

Security Business Capital can help you work through all of your government contracting financing needs. Contact us today for a quote!

Share & Enjoy this Article

Ready to Get Started?

You are about to leave the Security Business Capital website.

Security Business Capital is not responsible for the overall website content, security, or privacy policies on third-party sites. Please review their Privacy Policy as it may differ from our Privacy Policy. We hope you found the information you were looking for from Security Business Capital.

Continue to LinkedIn No Thanks

Continue to Facebook No Thanks

IMAGES

Federal Assignment of Claims Act
Assignment of Claims Act and Federal Contracts
Federal Tort Claims Act
Fillable assignment of claim template
Federal Assignment of Claims Act
Prevent Overpayment Under False Claims Act

VIDEO

Ashanti Waugh
9 Claims lecture 9
4 Claims lecture 4
14 Claims Lec 14
3 Claims lecture 3
2 Claims lecture 2

COMMENTS

How Are You Expected to Act by Others?
Each culture has its own mores for interpersonal relationships, but one of the basic rules for interaction that has remained true across cultures is the importance of treating others the way one wants to be treated.
What Were the Effects of the Intolerable Acts?
The Intolerable Acts were the last of a series of acts levied by the British that sparked outrage among the American colonists, who called for an intercolonial conference that eventually became known as the First Continental Congress. From ...
What Is an Act of Parliament?
An Act of Parliament is a form of legislation that is passed by the parliament intended to create a new law or change an existing law. A bill must pass and win royal assent in order to become law.
Subpart 32.8
Under the Assignment of Claims Act, a contractor may assign moneys due or to become due under a contract if all the following conditions are met: (a) The
52.232-23 Assignment of Claims.
3727 , 41 U.S.C.6305 (hereafter referred to as "the Act")
48 CFR Subpart 32.8
Law about... Articles from Wex · Table of Popular Names.
673 Subpart 32.8—Assignment of Claims
Under the Assignment of Claims Act, ... agency (see FAR 32.801), except a con-.
SUBPART 232.8 ASSIGNMENT OF CLAIMS
... contracts for personal services may prohibit the assignment of claims. ... in the Federal Register on June 11, 1996, as required by law.
Activity 39: Assignment of Claims
Determine if assignment of claims is permissible. FAR 32.802 Conditions [assignment of claims]. A contractor may assign moneys due or to become due under a.
52.232-23 Assignment of Claims.
(1) The contracting officer shall insert the clause at 52.232-23, Assignment of Claims, in solicitations and contracts expected to exceed the micro-purchase
Update the Assignment of Claims processes under FAR Part 32.805
The Assignment of Claims Act (31 U.S.C. § 3727, 41 U.S.C. § 6305) was passed in 1940 and provides for an important function in government contract financing
Ask a Professor: Assignment of Claims
This does not fall under FAR subpart 32.8, Assignment of Claims. In The assignment of claims relates to the prime contractor assigning payment due it to a party
Federal Assignment of Claims Act for Government Contractors
The Federal Assignment of Claims Act defines how lenders or factoring companies can arrange for payments when federal contracts are part of
Assignment of Claims
amount of the claim is decided, and a warrant ... Other financing institution (undefined in statute or in. FAR ).