52.212-4 Contract Terms and

Conditions—Commercial Products and

Commercial Services.

As prescribed in 12.301(b)(3), insert the following clause:

Contract Terms and Conditions—Commercial Products and Commercial Services (Nov 2023)

(a) Inspection/Acceptance. The Contractor shall only tender for acceptance those items that conform

to the requirements of this contract. The Government reserves the right to inspect or test any

supplies or services that have been tendered for acceptance. The Government may require repair or

replacement of nonconforming supplies or reperformance of nonconforming services at no increase

in contract price. If repair/replacement or reperformance will not correct the defects or is not

possible, the Government may seek an equitable price reduction or adequate consideration for

acceptance of nonconforming supplies or services. The Government must exercise its postacceptance rights-

(1) Within a reasonable time after the defect was discovered or should have been discovered; and

(2) Before any substantial change occurs in the condition of the item, unless the change is due to the

defect in the item.

(b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a

result of performance of this contract to a bank, trust company, or other financing institution,

including any Federal lending agency in accordance with the Assignment of Claims Act

(31 U.S.C. 3727). However, when a third party makes payment (e.g., use of the Governmentwide

commercial purchase card), the Contractor may not assign its rights to receive payment under this

contract.

(c) Changes. Changes in the terms and conditions of this contract may be made only by written

agreement of the parties.

(d) Disputes. This contract is subject to 41 U.S.C. chapter 71, Contract Disputes. Failure of the

parties to this contract to reach agreement on any request for equitable adjustment, claim, appeal or

action arising under or relating to this contract shall be a dispute to be resolved in accordance with

the clause at Federal Acquisition Regulation (FAR) 52.233-1, Disputes, which is incorporated herein

by reference. The Contractor shall proceed diligently with performance of this contract, pending

final resolution of any dispute arising under the contract.

(e) Definitions. The clause at FAR 52.202-1, Definitions, is incorporated herein by reference.

(f) Excusable delays. The Contractor shall be liable for default unless nonperformance is caused by

an occurrence beyond the reasonable control of the Contractor and without its fault or negligence

such as, acts of God or the public enemy, acts of the Government in either its sovereign or

contractual capacity, fires, floods, epidemics, quarantine restrictions, strikes, unusually severe

weather, and delays of common carriers. The Contractor shall notify the Contracting Officer in

writing as soon as it is reasonably possible after the commencement of any excusable delay, setting

forth the full particulars in connection therewith, shall remedy such occurrence with all reasonable
dispatch, and shall promptly give written notice to the Contracting Officer of the cessation of such

occurrence.

(g) Invoice.

(1) The Contractor shall submit an original invoice and three copies (or electronic invoice, if

authorized) to the address designated in the contract to receive invoices. An invoice must include-

(i) Name and address of the Contractor;

(ii) Invoice date and number;

(iii) Contract number, line item number and, if applicable, the order number;

(iv) Description, quantity, unit of measure, unit price and extended price of the items delivered;

(v) Shipping number and date of shipment, including the bill of lading number and weight of

shipment if shipped on Government bill of lading;

(vi) Terms of any discount for prompt payment offered;

(vii) Name and address of official to whom payment is to be sent;

(viii) Name, title, and phone number of person to notify in event of defective invoice; and

(ix) Taxpayer Identification Number (TIN). The Contractor shall include its TIN on the invoice only if

required elsewhere in this contract.

(x) Electronic funds transfer (EFT) banking information.

(A) The Contractor shall include EFT banking information on the invoice only if required elsewhere

in this contract.

(B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a

proper invoice, the Contractor shall have submitted correct EFT banking information in accordance

with the applicable solicitation provision, contract clause (e.g., 52.232-33, Payment by Electronic

Funds Transfer-System for Award Management, or 52.232-34, Payment by Electronic Funds

Transfer-Other Than System for Award Management), or applicable agency procedures.

(C) EFT banking information is not required if the Government waived the requirement to pay by

EFT.

(2) Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C.3903) and Office

of Management and Budget (OMB) prompt payment regulations at 5 CFR Part 1315.

(h) Patent indemnity. The Contractor shall indemnify the Government and its officers, employees and

agents against liability, including costs, for actual or alleged direct or contributory infringement of,

or inducement to infringe, any United States or foreign patent, trademark or copyright, arising out

of the performance of this contract, provided the Contractor is reasonably notified of such claims

and proceedings.

(i) Payment.-
(1) Items accepted. Payment shall be made for items accepted by the Government that have been

delivered to the delivery destinations set forth in this contract.

(2) Prompt payment. The Government will make payment in accordance with the Prompt Payment

Act (31 U.S.C.3903) and prompt payment regulations at 5 CFR Part 1315.

(3) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see 52.212-5(b) for

the appropriate EFT clause.

(4) Discount. In connection with any discount offered for early payment, time shall be computed

from the date of the invoice. For the purpose of computing the discount earned, payment shall be

considered to have been made on the date which appears on the payment check or the specified

payment date if an electronic funds transfer payment is made.

(5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice

payment or that the Government has otherwise overpaid on a contract financing or invoice payment,

the Contractor shall-

(i) Remit the overpayment amount to the payment office cited in the contract along with a

description of the overpayment including the-

(A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation

errors, date(s) of overpayment);

(B) Affected contract number and delivery order number, if applicable;

(C) Affected line item or subline item, if applicable; and

(D) Contractor point of contact.

(ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

(6) Interest.

(i) All amounts that become payable by the Contractor to the Government under this contract shall

bear simple interest from the date due until paid unless paid within 30 days of becoming due. The

interest rate shall be the interest rate established by the Secretary of the Treasury as provided in 41

U.S.C. 7109, which is applicable to the period in which the amount becomes due, as provided in

(i)(6)(v) of this clause, and then at the rate applicable for each six-month period as fixed by the

Secretary until the amount is paid.

(ii) The Government may issue a demand for payment to the Contractor upon finding a debt is due

under the contract.

(iii) Final decisions. The Contracting Officer will issue a final decision as required by 33.211 if–

(A) The Contracting Officer and the Contractor are unable to reach agreement on the existence or

amount of a debt within 30 days;

(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within

the timeline specified in the demand for payment unless the amounts were not repaid because the

Contractor has requested an installment payment agreement; or
(C) The Contractor requests a deferment of collection on a debt previously demanded by the

Contracting Officer (see 32.607-2).

(iv) If a demand for payment was previously issued for the debt, the demand for payment included in

the final decision shall identify the same due date as the original demand for payment.

(v) Amounts shall be due at the earliest of the following dates:

(A) The date fixed under this contract.

(B) The date of the first written demand for payment, including any demand for payment resulting

from a default termination.

(vi) The interest charge shall be computed for the actual number of calendar days involved

beginning on the due date and ending on-

(A) The date on which the designated office receives payment from the Contractor;

(B) The date of issuance of a Government check to the Contractor from which an amount otherwise

payable has been withheld as a credit against the contract debt; or

(C) The date on which an amount withheld and applied to the contract debt would otherwise have

become payable to the Contractor.

(vii) The interest charge made under this clause may be reduced under the procedures prescribed in

FAR 32.608-2 in effect on the date of this contract.

(j) Risk of loss. Unless the contract specifically provides otherwise, risk of loss or damage to the

supplies provided under this contract shall remain with the Contractor until, and shall pass to the

Government upon:

(1) Delivery of the supplies to a carrier, if transportation is f.o.b. origin; or

(2) Delivery of the supplies to the Government at the destination specified in the contract, if

transportation is f.o.b. destination.

(k) Taxes. The contract price includes all applicable Federal, State, and local taxes and duties.

(l) Termination for the Government’s convenience. The Government reserves the right to terminate

this contract, or any part hereof, for its sole convenience. In the event of such termination, the

Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its

suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor

shall be paid a percentage of the contract price reflecting the percentage of the work performed

prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the

satisfaction of the Government using its standard record keeping system, have resulted from the

termination. The Contractor shall not be required to comply with the cost accounting standards or

contract cost principles for this purpose. This paragraph does not give the Government any right to

audit the Contractor’s records. The Contractor shall not be paid for any work performed or costs

incurred which reasonably could have been avoided.

(m) Termination for cause. The Government may terminate this contract, or any part hereof, for

cause in the event of any default by the Contractor, or if the Contractor fails to comply with any

contract terms and conditions, or fails to provide the Government, upon request, with adequate
assurances of future performance. In the event of termination for cause, the Government shall not

be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor

shall be liable to the Government for any and all rights and remedies provided by law. If it is

determined that the Government improperly terminated this contract for default, such termination

shall be deemed a termination for convenience.

(n) Title. Unless specified elsewhere in this contract, title to items furnished under this contract shall

pass to the Government upon acceptance, regardless of when or where the Government takes

physical possession.

(o) Warranty. The Contractor warrants and implies that the items delivered hereunder are

merchantable and fit for use for the particular purpose described in this contract.

(p) Limitation of liability. Except as otherwise provided by an express warranty, the Contractor will

not be liable to the Government for consequential damages resulting from any defect or deficiencies

in accepted items.

(q) Other compliances. The Contractor shall comply with all applicable Federal, State and local laws,

executive orders, rules and regulations applicable to its performance under this contract.

(r) Compliance with laws unique to Government contracts. The Contractor agrees to comply with 31

U.S.C. 1352 relating to limitations on the use of appropriated funds to influence certain Federal

contracts; 18 U.S.C. 431 relating to officials not to benefit; 40 U.S.C. chapter 37, Contract Work

Hours and Safety Standards; 41 U.S.C. chapter 87, Kickbacks; 49 U.S.C. 40118, Fly American; and

41 U.S.C. chapter 21 relating to procurement integrity.

(s) Order of precedence. Any inconsistencies in this solicitation or contract shall be resolved by

giving precedence in the following order:

(1) The schedule of supplies/services.

(2) The Assignments, Disputes, Payments, Invoice, Other Compliances, Compliance with Laws

Unique to Government Contracts, and Unauthorized Obligations paragraphs of this clause;

(3) The clause at 52.212-5.

(4) Addenda to this solicitation or contract, including any license agreements for computer software.

(5) Solicitation provisions if this is a solicitation.

(6) Other paragraphs of this clause.

(7) The Standard Form 1449.

(8) Other documents, exhibits, and attachments.

(9) The specification.

(t) [Reserved]

(u) Unauthorized Obligations.

(1) Except as stated in paragraph (u)(2) of this clause, when any supply or service acquired under
this contract is subject to any End User License Agreement (EULA), Terms of Service (TOS), or

similar legal instrument or agreement, that includes any clause requiring the Government to

indemnify the Contractor or any person or entity for damages, costs, fees, or any other loss or

liability that would create an Anti-Deficiency Act violation (31 U.S.C. 1341), the following shall

govern:

(i) Any such clause is unenforceable against the Government.

(ii) Neither the Government nor any Government authorized end user shall be deemed to have

agreed to such clause by virtue of it appearing in the EULA, TOS, or similar legal instrument or

agreement. If the EULA, TOS, or similar legal instrument or agreement is invoked through an "I

agree" click box or other comparable mechanism (e.g., "click-wrap" or "browse-wrap" agreements),

execution does not bind the Government or any Government authorized end user to such clause.

(iii) Any such clause is deemed to be stricken from the EULA, TOS, or similar legal instrument or

agreement.

(2) Paragraph (u)(1) of this clause does not apply to indemnification by the Government that is

expressly authorized by statute and specifically authorized under applicable agency regulations and

procedures.

(v) Incorporation by reference. The Contractor’s representations and certifications, including those

completed electronically via the System for Award Management (SAM), are incorporated by

reference into the contract.

(End of clause)

Alternate I (Nov 2021). When a time-and-materials or labor-hour contract is contemplated, substitute

the following paragraphs (a), (e), (i), (l), and (m) for those in the basic clause.

(a) Inspection/Acceptance. (1) The Government has the right to inspect and test all materials

furnished and services performed under this contract, to the extent practicable at all places and

times, including the period of performance, and in any event before acceptance. The Government

may also inspect the plant or plants of the Contractor or any subcontractor engaged in contract

performance. The Government will perform inspections and tests in a manner that will not unduly

delay the work.

(2) If the Government performs inspection or tests on the premises of the Contractor or a

subcontractor, the Contractor shall furnish and shall require subcontractors to furnish all reasonable

facilities and assistance for the safe and convenient performance of these duties.

(3) Unless otherwise specified in the contract, the Government will accept or reject services and

materials at the place of delivery as promptly as practicable after delivery, and they will be

presumed accepted 60 days after the date of delivery, unless accepted earlier.

(4) At any time during contract performance, but not later than 6 months (or such other time as may

be specified in the contract) after acceptance of the services or materials last delivered under this

contract, the Government may require the Contractor to replace or correct services or materials that

at time of delivery failed to meet contract requirements. Except as otherwise specified in paragraph

(a)(6) of this clause, the cost of replacement or correction shall be determined under paragraph (i) of

this clause, but the "hourly rate" for labor hours incurred in the replacement or correction shall be

reduced to exclude that portion of the rate attributable to profit. Unless otherwise specified below,
the portion of the "hourly rate" attributable to profit shall be 10 percent. The Contractor shall not

tender for acceptance materials and services required to be replaced or corrected without disclosing

the former requirement for replacement or correction, and, when required, shall disclose the

corrective action taken. [Insert portion of labor rate attributable to profit.]

(5)(i) If the Contractor fails to proceed with reasonable promptness to perform required replacement

or correction, and if the replacement or correction can be performed within the ceiling price (or the

ceiling price as increased by the Government), the Government may-

(A) By contract or otherwise, perform the replacement or correction, charge to the Contractor any

increased cost, or deduct such increased cost from any amounts paid or due under this contract; or

(B) Terminate this contract for cause.

(ii) Failure to agree to the amount of increased cost to be charged to the Contractor shall be a

dispute under the Disputes clause of the contract.

(6) Notwithstanding paragraphs (a)(4) and (5) above, the Government may at any time require the

Contractor to remedy by correction or replacement, without cost to the Government, any failure by

the Contractor to comply with the requirements of this contract, if the failure is due to-

(i) Fraud, lack of good faith, or willful misconduct on the part of the Contractor's managerial

personnel; or

(ii) The conduct of one or more of the Contractor’s employees selected or retained by the Contractor

after any of the Contractor’s managerial personnel has reasonable grounds to believe that the

employee is habitually careless or unqualified.

(7) This clause applies in the same manner and to the same extent to corrected or replacement

materials or services as to materials and services originally delivered under this contract.

(8) The Contractor has no obligation or liability under this contract to correct or replace materials

and services that at time of delivery do not meet contract requirements, except as provided in this

clause or as may be otherwise specified in the contract.

(9) Unless otherwise specified in the contract, the Contractor's obligation to correct or replace

Government-furnished property shall be governed by the clause pertaining to Government property.

(e) Definitions. (1) The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. As

used in this clause-

(i) "Direct materials" means those materials that enter directly into the end product, or that are used

or consumed directly in connection with the furnishing of the end product or service.

(ii) "Hourly rate" means the rate(s) prescribed in the contract for payment for labor that meets the

labor category qualifications of a labor category specified in the contract that are-

(A) Performed by the contractor;

(B) Performed by the subcontractors; or

(C) Transferred between divisions, subsidiaries, or affiliates of the contractor under a common

control.
(iii) "Materials" means-

(A) Direct materials, including supplies transferred between divisions, subsidiaries, or affiliates of

the contractor under a common control;

(B) Subcontracts for supplies and incidental services for which there is not a labor category

specified in the contract;

(C) Other direct costs (e.g., incidental services for which there is not a labor category specified in

the contract, travel, computer usage charges, etc.);

(D) The following subcontracts for services which are specifically excluded from the hourly rate:

[Insert any subcontracts for services to be excluded from the hourly rates prescribed in the

schedule.]; and

(E) Indirect costs specifically provided for in this clause.

(iv) "Subcontract" means any contract, as defined in FAR subpart 2.1, entered into with a

subcontractor to furnish supplies or services for performance of the prime contract or a subcontract

including transfers between divisions, subsidiaries, or affiliates of a contractor or subcontractor. It

includes, but is not limited to, purchase orders, and changes and modifications to purchase orders.

(i) Payments. (1) Work performed. The Government will pay the Contractor as follows upon the

submission of commercial invoices approved by the Contracting Officer:

(i) Hourly rate.

(A) The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the

contract by the number of direct labor hours performed. Fractional parts of an hour shall be payable

on a prorated basis.

(B) The rates shall be paid for all labor performed on the contract that meets the labor qualifications

specified in the contract. Labor hours incurred to perform tasks for which labor qualifications were

specified in the contract will not be paid to the extent the work is performed by individuals that do

not meet the qualifications specified in the contract, unless specifically authorized by the

Contracting Officer.

(C) Invoices may be submitted once each month (or at more frequent intervals, if approved by the

Contracting Officer) to the Contracting Officer or the authorized representative.

(D) When requested by the Contracting Officer or the authorized representative, the Contractor

shall substantiate invoices (including any subcontractor hours reimbursed at the hourly rate in the

schedule) by evidence of actual payment, individual daily job timecards, records that verify the

employees meet the qualifications for the labor categories specified in the contract, or other

substantiation specified in the contract.

(E) Unless the Schedule prescribes otherwise, the hourly rates in the Schedule shall not be varied by

virtue of the Contractor having performed work on an overtime basis.

(1) If no overtime rates are provided in the Schedule and the Contracting Officer approves overtime

work in advance, overtime rates shall be negotiated.

(2) Failure to agree upon these overtime rates shall be treated as a dispute under the Disputes
clause of this contract.

(3) If the Schedule provides rates for overtime, the premium portion of those rates will be

reimbursable only to the extent the overtime is approved by the Contracting Officer.

(ii) Materials.

(A) If the Contractor furnishes materials that meet the definition of a commercial product at FAR

2.101, the price to be paid for such materials shall not exceed the Contractor’s established catalog

or market price, adjusted to reflect the-

(1) Quantities being acquired; and

(2) Any modifications necessary because of contract requirements.

(B) Except as provided for in paragraph (i)(1)(ii)(A) and (D)(2) of this clause, the Government will

reimburse the Contractor the actual cost of materials (less any rebates, refunds, or discounts

received by the contractor that are identifiable to the contract) provided the Contractor-

(1) Has made payments for materials in accordance with the terms and conditions of the agreement

or invoice; or

(2) Makes these payments within 30 days of the submission of the Contractor’s payment request to

the Government and such payment is in accordance with the terms and conditions of the agreement

or invoice.

(C) To the extent able, the Contractor shall-

(1) Obtain materials at the most advantageous prices available with due regard to securing prompt

delivery of satisfactory materials; and

(2) Give credit to the Government for cash and trade discounts, rebates, scrap, commissions, and

other amounts that are identifiable to the contract.

(D) Other Costs. Unless listed below, other direct and indirect costs will not be reimbursed.

(1) Other Direct Costs. The Government will reimburse the Contractor on the basis of actual cost for

the following, provided such costs comply with the requirements in paragraph (i)(1)(ii)(B) of this

clause:[Insert each element of other direct costs (e.g., travel, computer usage charges, etc. Insert

"None" if no reimbursement for other direct costs will be provided. If this is an indefinite delivery

contract, the Contracting Officer may insert "Each order must list separately the elements of other

direct charge(s) for that order or, if no reimbursement for other direct costs will be provided, insert

‘None’."]

(2) Indirect Costs (Material Handling, Subcontract Administration, etc.). The Government will

reimburse the Contractor for indirect costs on a pro-rata basis over the period of contract

performance at the following fixed price:[Insert a fixed amount for the indirect costs and payment

schedule. Insert "$0" if no fixed price reimbursement for indirect costs will be provided. (If this is an

indefinite delivery contract, the Contracting Officer may insert "Each order must list separately the

fixed amount for the indirect costs and payment schedule or, if no reimbursement for indirect costs,

insert ‘None’)."]

(2) Total cost. It is estimated that the total cost to the Government for the performance of this
contract shall not exceed the ceiling price set forth in the Schedule and the Contractor agrees to use

its best efforts to perform the work specified in the Schedule and all obligations under this contract

within such ceiling price. If at any time the Contractor has reason to believe that the hourly rate

payments and material costs that will accrue in performing this contract in the next succeeding 30

days, if added to all other payments and costs previously accrued, will exceed 85 percent of the

ceiling price in the Schedule, the Contractor shall notify the Contracting Officer giving a revised

estimate of the total price to the Government for performing this contract with supporting reasons

and documentation. If at any time during the performance of this contract, the Contractor has

reason to believe that the total price to the Government for performing this contract will be

substantially greater or less than the then stated ceiling price, the Contractor shall so notify the

Contracting Officer, giving a revised estimate of the total price for performing this contract, with

supporting reasons and documentation. If at any time during performance of this contract, the

Government has reason to believe that the work to be required in performing this contract will be

substantially greater or less than the stated ceiling price, the Contracting Officer will so advise the

Contractor, giving the then revised estimate of the total amount of effort to be required under the

contract.

(3) Ceiling price. The Government will not be obligated to pay the Contractor any amount in excess

of the ceiling price in the Schedule, and the Contractor shall not be obligated to continue

performance if to do so would exceed the ceiling price set forth in the Schedule, unless and until the

Contracting Officer notifies the Contractor in writing that the ceiling price has been increased and

specifies in the notice a revised ceiling that shall constitute the ceiling price for performance under

this contract. When and to the extent that the ceiling price set forth in the Schedule has been

increased, any hours expended and material costs incurred by the Contractor in excess of the ceiling

price before the increase shall be allowable to the same extent as if the hours expended and material

costs had been incurred after the increase in the ceiling price.

(4) Access to records. At any time before final payment under this contract, the Contracting Officer

(or authorized representative) will have access to the following (access shall be limited to the listing

below unless otherwise agreed to by the Contractor and the Contracting Officer):

(i) Records that verify that the employees whose time has been included in any invoice meet the

qualifications for the labor categories specified in the contract;

(ii) For labor hours (including any subcontractor hours reimbursed at the hourly rate in the

schedule), when timecards are required as substantiation for payment-

(A) The original timecards (paper-based or electronic);

(B) The Contractor’s timekeeping procedures;

(C) Contractor records that show the distribution of labor between jobs or contracts; and

(D) Employees whose time has been included in any invoice for the purpose of verifying that these

employees have worked the hours shown on the invoices.

(iii) For material and subcontract costs that are reimbursed on the basis of actual cost-

(A) Any invoices or subcontract agreements substantiating material costs; and

(B) Any documents supporting payment of those invoices.

(5) Overpayments/Underpayments. Each payment previously made shall be subject to reduction to
the extent of amounts, on preceding invoices, that are found by the Contracting Officer not to have

been properly payable and shall also be subject to reduction for overpayments or to increase for

underpayments. The Contractor shall promptly pay any such reduction within 30 days unless the

parties agree otherwise. The Government within 30 days will pay any such increases, unless the

parties agree otherwise. The Contractor’s payment will be made by check. If the Contractor becomes

aware of a duplicate invoice payment or that the Government has otherwise overpaid on an invoice

payment, the Contractor shall-

(i) Remit the overpayment amount to the payment office cited in the contract along with a

description of the overpayment including the-

(A) Circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation

errors, date(s) of overpayment);

(B) Affected contract number and delivery order number, if applicable;

(C) Affected line item or subline item, if applicable; and

(D) Contractor point of contact.

(ii) Provide a copy of the remittance and supporting documentation to the Contracting Officer.

(6)(i) All amounts that become payable by the Contractor to the Government under this contract

shall bear simple interest from the date due until paid unless paid within 30 days of becoming due.

The interest rate shall be the interest rate established by the Secretary of the Treasury, as provided

in 41 U.S.C. 7109, which is applicable to the period in which the amount becomes due, and then at

the rate applicable for each six month period as established by the Secretary until the amount is

paid.

(ii) The Government may issue a demand for payment to the Contractor upon finding a debt is due

under the contract.

(iii) Final Decisions. The Contracting Officer will issue a final decision as required by 33.211 if-

(A) The Contracting Officer and the Contractor are unable to reach agreement on the existence or

amount of a debt in a timely manner;

(B) The Contractor fails to liquidate a debt previously demanded by the Contracting Officer within

the timeline specified in the demand for payment unless the amounts were not repaid because the

Contractor has requested an installment payment agreement; or

(C) The Contractor requests a deferment of collection on a debt previously demanded by the

Contracting Officer (see FAR 32.607-2).

(iv) If a demand for payment was previously issued for the debt, the demand for payment included in

the final decision shall identify the same due date as the original demand for payment.

(v) Amounts shall be due at the earliest of the following dates:

(A) The date fixed under this contract.

(B) The date of the first written demand for payment, including any demand for payment resulting

from a default termination.
(vi) The interest charge shall be computed for the actual number of calendar days involved

beginning on the due date and ending on-

(A) The date on which the designated office receives payment from the Contractor;

(B) The date of issuance of a Government check to the Contractor from which an amount otherwise

payable has been withheld as a credit against the contract debt; or

(C) The date on which an amount withheld and applied to the contract debt would otherwise have

become payable to the Contractor.

(vii) The interest charge made under this clause may be reduced under the procedures prescribed in

FAR 32.608-2 in effect on the date of this contract.

(viii) Upon receipt and approval of the invoice designated by the Contractor as the "completion

invoice" and supporting documentation, and upon compliance by the Contractor with all terms of

this contract, any outstanding balances will be paid within 30 days unless the parties agree

otherwise. The completion invoice, and supporting documentation, shall be submitted by the

Contractor as promptly as practicable following completion of the work under this contract, but in

no event later than 1 year (or such longer period as the Contracting Officer may approve in writing)

from the date of completion.

(7) Release of claims. The Contractor, and each assignee under an assignment entered into under

this contract and in effect at the time of final payment under this contract, shall execute and deliver,

at the time of and as a condition precedent to final payment under this contract, a release

discharging the Government, its officers, agents, and employees of and from all liabilities,

obligations, and claims arising out of or under this contract, subject only to the following exceptions.

(i) Specified claims in stated amounts, or in estimated amounts if the amounts are not susceptible to

exact statement by the Contractor.

(ii) Claims, together with reasonable incidental expenses, based upon the liabilities of the Contractor

to third parties arising out of performing this contract, that are not known to the Contractor on the

date of the execution of the release, and of which the Contractor gives notice in writing to the

Contracting Officer not more than 6 years after the date of the release or the date of any notice to

the Contractor that the Government is prepared to make final payment, whichever is earlier.

(iii) Claims for reimbursement of costs (other than expenses of the Contractor by reason of its

indemnification of the Government against patent liability), including reasonable incidental

expenses, incurred by the Contractor under the terms of this contract relating to patents.

(8) Prompt payment. The Government will make payment in accordance with the Prompt Payment

Act (31 U.S.C. 3903) and prompt payment regulations at 5 CFR part 1315.

(9) Electronic Funds Transfer (EFT). If the Government makes payment by EFT, see 52.212-5(b) for

the appropriate EFT clause.

(10) Discount. In connection with any discount offered for early payment, time shall be computed

from the date of the invoice. For the purpose of computing the discount earned, payment shall be

considered to have been made on the date that appears on the payment check or the specified

payment date if an electronic funds transfer payment is made.

(l) Termination for the Government’s convenience. The Government reserves the right to terminate
this contract, or any part hereof, for its sole convenience. In the event of such termination, the

Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its

suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor

shall be paid an amount for direct labor hours (as defined in the Schedule of the contract)

determined by multiplying the number of direct labor hours expended before the effective date of

termination by the hourly rate(s) in the contract, less any hourly rate payments already made to the

Contractor plus reasonable charges the Contractor can demonstrate to the satisfaction of the

Government using its standard record keeping system that have resulted from the termination. The

Contractor shall not be required to comply with the cost accounting standards or contract cost

principles for this purpose. This paragraph does not give the Government any right to audit the

Contractor’s records. The Contractor shall not be paid for any work performed or costs incurred that

reasonably could have been avoided.

(m) Termination for cause. The Government may terminate this contract, or any part hereof, for

cause in the event of any default by the Contractor, or if the Contractor fails to comply with any

contract terms and conditions, or fails to provide the Government, upon request, with adequate

assurances of future performance. In the event of termination for cause, the Government shall not

be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor

shall be liable to the Government for any and all rights and remedies provided by law. If it is

determined that the Government improperly terminated this contract for default, such termination

shall be deemed a termination for convenience.

Parent topic: 52.212 [Reserved]