52.241-9 Connection Charge.

As prescribed in 41.501(d)(3), insert a clause substantially the same as the following:

Connection Charge (Feb 1995)

(a) Charge. In consideration of the Contractor furnishing and installing at its expense the new

connection facilities described herein, the Government shall pay the Contractor a connection charge.

The payment shall be in the form of progress payments, advance payments or as a lump sum, as

agreed to by the parties and as permitted by applicable law. The total amount payable shall be either

the estimated cost of $______ less the agreed to salvage value of $______, or the actual cost less the

salvage value, whichever is less. As a condition precedent to final payment, the Contractor shall

execute a release of any claims against the Government arising under or by the virtue of such

installation.

(b) Ownership, operation, maintenance and repair of new facilities to be provided. The facilities to

be supplied by the Contractor under this clause, notwithstanding the payment by the Government of

a connection charge, shall be and remain the property of the Contractor and shall, at all times

during the life of this contract or any renewals thereof, be operated, maintained, and repaired by the

Contractor at its expense. All taxes and other charges in connection therewith, together with all

liability arising out of the construction, operations, maintenance, or repair of such facilities, shall be

the obligation of the Contractor.

(c) Credits.

(1) The Contractor agrees to allow the Government, on each monthly bill for service furnished under

this contract to the service location, a credit of ______ percent of the amount of each such bill as

rendered until the accumulation of credits shall equal the amount of such connection charge,

provided that the Contractor may at any time allow a credit up to 100 percent of the amount of each

such bill.

(2) In the event the Contractor, before any termination of this contract but after completion of the

facilities provided for in this clause, serves any customer other than the Government (regardless of

whether the Government is being served simultaneously, intermittently, or not at all) by means of

these facilities, the Contractor shall promptly notify the Government in writing. Unless otherwise

agreed by the parties in writing at that time, the Contractor shall promptly accelerate the credits

provided for under paragraph (c)(1) of this clause, up to 100 percent of each monthly bill until there

is refunded the amount that reflects the Government’s connection costs for that portion of the

facilities used in serving others.

(3) In the event the Contractor terminates this contract, or defaults in performance, prior to full

credit of any connection charge paid by the Government, the Contractor shall pay to the Government

an amount equal to the uncredited balance of the connection charge as of the date of the

termination or default.

(d) Termination before completion of facilities. The Government reserves the right to terminate this

contract at any time before completion of the facilities with respect to which the Government is to

pay a connection charge. In the event the Government exercises this right, the Contractor shall be

paid the cost of any work accomplished, including direct and indirect costs reasonably allocable to
the completed work prior to the time of termination by the Government, plus the cost of removal,

less the salvage value.

(e) Termination after completion of facilities. In the event the Government terminates this contract

after completion of the facilities with respect to which the Government has paid a connection

charge, but before the crediting in full by the Contractor of any connection charge in accordance

with the terms of this contract, the Contractor shall have the following options:

(1) To retain in place for _________ months after the notice of termination by the Government such

facilities on condition that-

(i) If, during such _______ month period, the Contractor serves any other customer by means of such

facilities, the Contractor, shall, in lieu of allowing credits, pay the Government during such period

installments in like amount, manner, and extent as the credit provided for under paragraph (c) of

this clause before such termination; and

(ii) Immediately after such ________ month period the Contractor shall promptly pay in full to the

Government the uncredited balance of the connection charge.

(2) To remove such facilities at the Contractor’s own expense within _______ months after the

effective date of the termination by the Government. If the Contractor elects to remove such

facilities, the Government shall then have the option of purchasing such facilities at the agreed

salvage value set forth herein; and provided further, that the Contractor shall, at the direction of the

Government, leave in place such facilities located on Government property which the Government

elects to purchase at the agreed salvage value.

(End of clause)

Alternate I (Feb 1995). If the Contracting Officer determines that a nonrefundable charge is to be

paid and no credits are due the Government, delete paragraphs (c) and (e), renumber paragraph (d)

as (c) and add the following as paragraph (d):

(d) Termination after completion of facilities. In the event the Government terminates this contract

after completion of the facilities with respect to which the Government is to pay a connection

charge, the Contractor shall have the following options:

(1) To retain in place for ________ months after the notice of termination by the Government. If the

Contractor and the Government have not agreed on terms for retention in place beyond ________

months, then the Contractor must remove the facilities pursuant to the terms of paragraph (d)(2) of

this clause.

(2) To remove such facilities at the Contractor's own expense within _______ months after the

effective date of the termination by the Government. If the Contractor elects to remove such

facilities, the Government shall then have the option of purchasing such facilities at the agreed

salvage value set forth herein; and provided further, that the Contractor shall, at the direction of the

Government, leave in place such facilities located on Government property which the Government

elects to purchase at the agreed salvage value.

Parent topic: 52.241 Utility Services Provisions and Clauses.