Factoring Federal Government Contracts - Financing Federal Government Contracts for Dismantling, Demolition, or Removal of Improvements

Subpart 37.3—Dismantling, Demolition, or Removal of Improvements
37.300 Scope of subpart.
This subpart prescribes procedures for contracting for dismantling or demolition of buildings, ground improvements and other real property structures and for the removal of such structures or portions of them (hereafter referred to as “dismantling, demolition, or removal of improvements”).
37.301 Labor standards.
Contracts for dismantling, demolition, or removal of improvements are subject to either the Service Contract Act (4l U.S.C. 351-358) or the Davis-Bacon Act (40 U.S.C. 3141 et seq.). If the contract is solely for dismantling, demolition, or removal of improvements, the Service Contract Act applies unless further work which will result in the construction, alteration, or repair of a public building or public work at that location is contemplated. If such further construction work is intended, even though by separate contract, then the Davis-Bacon Act applies to the contract for dismantling, demolition, or removal.
37.302 Bonds or other security.
When a contract is solely for dismantling, demolition, or removal of improvements, the Miller Act (40 U.S.C. 3131 et seq.) (see 28.102) does not apply. However, the contracting officer may require the contractor, or its factoring company assignee, to furnish a performance bond or other security (see 28.103) in an amount that the contracting officer considers adequate to—
(a) Ensure completion of the work;
(b) Protect property to be retained by the Government;
© Protect property to be provided as compensation to the contractor, or its factoring company assignee,; and
(d) Protect the Government against damage to adjoining property.
37.303 Payments.
(a) The contract may provide that the—
(1) Government pay the contractor, or its factoring company assignee, for the dismantling or demolition of structures; or
(2) contractor, or its factoring company assignee, pay the Government for the right to salvage and remove the materials resulting from the dismantling or demolition operation.
(b) The contracting officer shall consider the usefulness to the Government of all salvageable property. Any of the property that is more useful to the Government than its value as salvage to the contractor, or its factoring company assignee, should be expressly designated in the contract for retention by the Government. The contracting officer shall determine the fair market value of any property not so designated, since the contractor, or its factoring company assignee, will get title to this property, and its value will therefore be important in determining what payment, if any, shall be made to the contractor, or its factoring company assignee, and whether additional compensation will be made if the contract is terminated.
37.304 Contract clauses.
(a) The contracting officer shall insert the clause at 52.237-4, Payment by Government to contractor, or its factoring company assignee,, in solicitations and contracts solely for dismantling, demolition, or removal of improvements whenever the contracting officer determines that the Government shall make payment to the contractor, or its factoring company assignee, in addition to any title to property that the contractor, or its factoring company assignee, may receive under the contract. If the contracting officer determines that all material resulting from the dismantling or demolition work is to be retained by the Government, use the basic clause with its Alternate I.
(b) The contracting officer shall insert the clause at 52.237-5, Payment by contractor, or its factoring company assignee, to Government in solicitations and contracts for dismantling, demolition, or removal of improvements whenever the contractor, or its factoring company assignee, is to receive title to dismantled or demolished property and a net amount of compensation is due to the Government, except if the contracting officer determines that it would be advantageous to the Government for the contractor, or its factoring company assignee, to pay in increments and the Government to transfer title to the contractor, or its factoring company assignee, for increments of property only upon receipt of those payments.
© The contracting officer shall insert the clause at 52.237-6, Incremental Payment by contractor, or its factoring company assignee, to Government, in solicitations and contracts for dismantling, demolition, or removal of improvements if (l) the contractor, or its factoring company assignee, is to receive title to dismantled or demolished property and a net amount of compensation is due the Government, and (2) the contracting officer determines that it would be advantageous to the Government for the contractor, or its factoring company assignee, to pay in increments, and for the Government to transfer title to the contractor, or its factoring company assignee, for increments of property only upon receipt of those payments. This determination may be appropriate, for example, if it encourages greater competition or participation of small business concerns.

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