FAR sections 52.232-20 and 52.232-22

SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES

52.232-20

52.232-19 Availability of Funds for the Next Fiscal Year.
As prescribed in 32.705-1(b), insert the following clause in
solicitations and contracts if a one-year indefinite-quantity or
requirements contract for services is contemplated and the
contract (a) is funded by annual appropriations and (b) is to
extend beyond the initial fiscal year (see 32.703-2(b)):

(c) As part of the notification, the Contractor shall provide
the Contracting Officer a revised estimate of the total cost of
performing this contract.

AVAILABILITY OF FUNDS FOR THE NEXT FISCAL YEAR
(APR 1984)

(1) The Government is not obligated to reimburse the
Contractor for costs incurred in excess of (i) the estimated
cost specified in the Schedule or, (ii) if this is a cost-sharing
contract, the estimated cost to the Government specified in the
Schedule; and

Funds are not presently available for performance under
this contract beyond ________. The Government’s obligation
for performance of this contract beyond that date is contingent
upon the availability of appropriated funds from which payment for contract purposes can be made. No legal liability on
the part of the Government for any payment may arise for performance under this contract beyond _____, until funds are
made available to the Contracting Officer for performance
and until the Contractor receives notice of availability, to be
confirmed in writing by the Contracting Officer.
(End of clause)
52.232-20 Limitation of Cost.
As prescribed in 32.705-2(a), insert the following clause in
solicitations and contracts if a fully funded cost-reimbursement contract is contemplated, whether or not the contract
provides for payment of a fee. The 60-day period may be varied from 30 to 90 days and the 75 percent from 75 to
85 percent. “Task Order” or other appropriate designation
may be substituted for “Schedule” wherever that word
appears in the clause.
LIMITATION OF COST (APR 1984)
(a) The parties estimate that performance of this contract,
exclusive of any fee, will not cost the Government more than
(1) the estimated cost specified in the Schedule or, (2) if this
is a cost-sharing contract, the Government’s share of the estimated cost specified in the Schedule. The Contractor agrees
to use its best efforts to perform the work specified in the
Schedule and all obligations under this contract within the
estimated cost, which, if this is a cost-sharing contract,
includes both the Government’s and the Contractor’s share of
the cost.
(b) The Contractor shall notify the Contracting Officer in
writing whenever it has reason to believe that—
(1) The costs the Contractor expects to incur under this
contract in the next 60 days, when added to all costs previously incurred, will exceed 75 percent of the estimated cost
specified in the Schedule; or
(2) The total cost for the performance of this contract,
exclusive of any fee, will be either greater or substantially less
than had been previously estimated.

(d) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this
clause—

(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in
excess of the estimated cost specified in the Schedule, until
the Contracting Officer (i) notifies the Contractor in writing
that the estimated cost has been increased and (ii) provides a
revised estimated total cost of performing this contract. If this
is a cost-sharing contract, the increase shall be allocated in
accordance with the formula specified in the Schedule.
(e) No notice, communication, or representation in any
form other than that specified in paragraph (d)(2) of this
clause, or from any person other than the Contracting Officer,
shall affect this contract’s estimated cost to the Government.
In the absence of the specified notice, the Government is not
obligated to reimburse the Contractor for any costs in excess
of the estimated cost or, if this is a cost-sharing contract, for
any costs in excess of the estimated cost to the Government
specified in the Schedule, whether those excess costs were
incurred during the course of the contract or as a result of
termination.
(f) If the estimated cost specified in the Schedule is
increased, any costs the Contractor incurs before the increase
that are in excess of the previously estimated cost shall be
allowable to the same extent as if incurred afterward, unless
the Contracting Officer issues a termination or other notice
directing that the increase is solely to cover termination or
other specified expenses.
(g) Change orders shall not be considered an authorization
to exceed the estimated cost to the Government specified in
the Schedule, unless they contain a statement increasing the
estimated cost.
(h) If this contract is terminated or the estimated cost is not
increased, the Government and the Contractor shall negotiate
an equitable distribution of all property produced or purchased under the contract, based upon the share of costs
incurred by each.
(End of clause)
52.232-21 [Reserved]
(FAC 2005–27)

52.2-215

52.232-22

FEDERAL ACQUISITION REGULATION

52.232-22 Limitation of Funds.
As prescribed in 32.705-2(b), insert the following clause in
solicitations and contracts if an incrementally funded costreimbursement contract is contemplated. The 60-day period
may be varied from 30 to 90 days and the 75 percent from 75
to 85 percent. “Task Order” or other appropriate designation
may be substituted for “Schedule” wherever that word
appears in the clause.
LIMITATION OF FUNDS (APR 1984)
(a) The parties estimate that performance of this contract
will not cost the Government more than (1) the estimated cost
specified in the Schedule or, (2) if this is a cost-sharing contract, the Government’s share of the estimated cost specified
in the Schedule. The Contractor agrees to use its best efforts
to perform the work specified in the Schedule and all obligations under this contract within the estimated cost, which, if
this is a cost-sharing contract, includes both the Government’s
and the Contractor’s share of the cost.
(b) The Schedule specifies the amount presently available
for payment by the Government and allotted to this contract,
the items covered, the Government’s share of the cost if this
is a cost-sharing contract, and the period of performance it is
estimated the allotted amount will cover. The parties contemplate that the Government will allot additional funds incrementally to the contract up to the full estimated cost to the
Government specified in the Schedule, exclusive of any fee.
The Contractor agrees to perform, or have performed, work on
the contract up to the point at which the total amount paid and
payable by the Government under the contract approximates
but does not exceed the total amount actually allotted by the
Government to the contract.
(c) The Contractor shall notify the Contracting Officer in
writing whenever it has reason to believe that the costs it
expects to incur under this contract in the next 60 days, when
added to all costs previously incurred, will exceed 75 percent
of (1) the total amount so far allotted to the contract by the
Government or, (2) if this is a cost-sharing contract, the
amount then allotted to the contract by the Government plus
the Contractor’s corresponding share. The notice shall state
the estimated amount of additional funds required to continue
performance for the period specified in the Schedule.
(d) Sixty days before the end of the period specified in the
Schedule, the Contractor shall notify the Contracting Officer
in writing of the estimated amount of additional funds, if any,
required to continue timely performance under the contract or
for any further period specified in the Schedule or otherwise
agreed upon, and when the funds will be required.
(e) If, after notification, additional funds are not allotted by
the end of the period specified in the Schedule or another
agreed-upon date, upon the Contractor’s written request the
Contracting Officer will terminate this contract on that date in
accordance with the provisions of the Termination clause of
52.2-216

(FAC 2005–27)

this contract. If the Contractor estimates that the funds available will allow it to continue to discharge its obligations
beyond that date, it may specify a later date in its request, and
the Contracting Officer may terminate this contract on that
later date.
(f) Except as required by other provisions of this contract,
specifically citing and stated to be an exception to this
clause—
(1) The Government is not obligated to reimburse the
Contractor for costs incurred in excess of the total amount
allotted by the Government to this contract; and
(2) The Contractor is not obligated to continue performance under this contract (including actions under the Termination clause of this contract) or otherwise incur costs in
excess of—
(i) The amount then allotted to the contract by the
Government or;
(ii) If this is a cost-sharing contract, the amount then
allotted by the Government to the contract plus the Contractor’s corresponding share, until the Contracting Officer notifies the Contractor in writing that the amount allotted by the
Government has been increased and specifies an increased
amount, which shall then constitute the total amount allotted
by the Government to this contract.
(g) The estimated cost shall be increased to the extent that
(1) the amount allotted by the Government or, (2) if this is a
cost-sharing contract, the amount then allotted by the Government to the contract plus the Contractor’s corresponding
share, exceeds the estimated cost specified in the Schedule. If
this is a cost-sharing contract, the increase shall be allocated
in accordance with the formula specified in the Schedule.
(h) No notice, communication, or representation in any
form other than that specified in paragraph (f)(2) of this
clause, or from any person other than the Contracting Officer,
shall affect the amount allotted by the Government to this contract. In the absence of the specified notice, the Government
is not obligated to reimburse the Contractor for any costs in
excess of the total amount allotted by the Government to this
contract, whether incurred during the course of the contract or
as a result of termination.
(i) When and to the extent that the amount allotted by the
Government to the contract is increased, any costs the Contractor incurs before the increase that are in excess of—
(1) The amount previously allotted by the Government
or;
(2) If this is a cost-sharing contract, the amount previously allotted by the Government to the contract plus the Contractor’s corresponding share, shall be allowable to the same
extent as if incurred afterward, unless the Contracting Officer
issues a termination or other notice and directs that the
increase is solely to cover termination or other specified
expenses.

FAC 2005–27 OCTOBER 17, 2008
SUBPART 52.2—TEXT OF PROVISIONS AND CLAUSES
(j) Change orders shall not be considered an authorization
to exceed the amount allotted by the Government specified in
the Schedule, unless they contain a statement increasing the
amount allotted.
(k) Nothing in this clause shall affect the right of the Government to terminate this contract. If this contract is terminated, the Government and the Contractor shall negotiate an
equitable distribution of all property produced or purchased
under the contract, based upon the share of costs incurred by
each.
(l) If the Government does not allot sufficient funds to
allow completion of the work, the Contractor is entitled to a
percentage of the fee specified in the Schedule equalling the
percentage of completion of the work contemplated by this
contract.
(End of clause)
52.232-23 Assignment of Claims.
As prescribed in 32.806(a)(1), insert the following clause:
ASSIGNMENT OF CLAIMS (JAN 1986)
(a) The Contractor, under the Assignment of Claims Act,
as amended, 31 U.S.C. 3727, 41 U.S.C. 15 (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.

52.232-25
52.232-24 Prohibition of Assignment of Claims.
As prescribed in 32.806(b), insert the following clause:
PROHIBITION OF ASSIGNMENT OF CLAIMS (Jan 1986)
The assignment of claims under the Assignment of Claims
Act of 1940, as amended, 31 U.S.C. 3727, 41 U.S.C. 15, is
prohibited for this contract.
(End of clause)
52.232-25 Prompt Payment.
As prescribed in 32.908(c), insert the following clause:
PROMPT PAYMENT (OCT 2008)
Notwithstanding any other payment clause in this contract,
the Government will make invoice payments under the terms
and conditions specified in this clause. The Government considers payment as being made on the day a check is dated or
the date of an electronic funds transfer (EFT). Definitions of
pertinent terms are set forth in sections 2.101, 32.001, and
32.902 of the Federal Acquisition Regulation. All days
referred to in this clause are calendar days, unless otherwise
specified. (However, see paragraph (a)(4) of this clause concerning payments due on Saturdays, Sundays, and legal
holidays.)
(a) Invoice payments— (1) Due date. (i) Except as indicated in paragraphs (a)(2) and (c) of this clause, the due date
for making invoice payments by the designated payment
office is the later of the following two events:
(A) The 30th day after the designated billing
office receives a proper invoice from the Contractor (except
as provided in paragraph (a)(1)(ii) of this clause).
(B) The 30th day after Government acceptance of
supplies delivered or services performed. For a final invoice,
when the payment amount is subject to contract settlement
actions, acceptance is deemed to occur on the effective date of
the contract settlement.
(ii) If the designated billing office fails to annotate
the invoice with the actual date of receipt at the time of receipt,
the invoice payment due date is the 30th day after the date of
the Contractor’s invoice, provided the designated billing
office receives a proper invoice and there is no disagreement
over quantity, quality, or Contractor compliance with contract
requirements.
(2) Certain food products and other payments. (i) Due
dates on Contractor invoices for meat, meat food products, or
fish; perishable agricultural commodities; and dairy products,
edible fats or oils, and food products prepared from edible fats
or oils are—
(A) For meat or meat food products, as defined in
section 2(a)(3) of the Packers and Stockyard Act of 1921
(7 U.S.C. 182(3)), and as further defined in Pub. L. 98-181,
including any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable
52.2-217