FAR 52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts. Basic (Nov 2021) (Current)

As prescribed in 32.111(a)(7), the clause at 52.232-7, Payments under Time-and-Materials and Labor-Hour Contracts, in solicitations and contracts when a time-and-materials or labor-hour contract is contemplated. If the contracting officer determines that it is necessary to withhold payment to protect the Government’s interests, paragraph (a)(7) of the clause permits the contracting officer to unilaterally issue a modification requiring the contractor to withhold 5 percent of amounts due, up to a maximum of $50,000 under the contract. The contracting officer shall ensure that the modification specifies the percentage and total amount of the withhold payment. Normally, there should be no need to withhold payment for a contractor with a record of timely submittal of the release discharging the Government from all liabilities, obligations, and claims, as required by paragraph (g) of the clause.

Payments under Time-and-Materials and Labor-Hour Contracts (Nov 2021)

The Government will pay the Contractor as follows upon the submission of vouchers approved by the Contracting Officer or the authorized representative:

      (a) Hourly rate.

(1) 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-

                (i) Performed by the Contractor;

                (ii) Performed by the subcontractors; or

                (iii) Transferred between divisions, subsidiaries, or affiliates of the Contractor under a common control.

           (2) The amounts shall be computed by multiplying the appropriate hourly rates prescribed in the Schedule by the number of direct labor hours performed.

           (3) The hourly 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 employees that do not meet the qualifications specified in the contract, unless specifically authorized by the Contracting Officer.

           (4) The hourly rates shall include wages, indirect costs, general and administrative expense, and profit. Fractional parts of an hour shall be payable on a prorated basis.

           (5) Vouchers may be submitted not more than once every two weeks, to the Contracting Officer or authorized representative. A small business concern may receive more frequent payments than every two weeks. The Contractor shall substantiate vouchers (including any subcontractor hours reimbursed at the hourly rate in the schedule) by evidence of actual payment and by-

                (i) Individual daily job timekeeping records;

                (ii) Records that verify the employees meet the qualifications for the labor categories specified in the contract; or

                (iii) Other substantiation approved by the Contracting Officer.

           (6) Promptly after receipt of each substantiated voucher, the Government shall, except as otherwise provided in this contract, and subject to the terms of paragraph (e) of this clause, pay the voucher as approved by the Contracting Officer or authorized representative.

           (7) Unless otherwise prescribed in the Schedule, the Contracting Officer may unilaterally issue a contract modification requiring the Contractor to withhold amounts from its billings until a reserve is set aside in an amount that the Contracting Officer considers necessary to protect the Government's interests. The Contracting Officer may require a withhold of 5 percent of the amounts due under paragraph (a) of this clause, but the total amount withheld for the contract shall not exceed $50,000. The amounts withheld shall be retained until the Contractor executes and delivers the release required by paragraph (g) of this clause.

           (8) 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. If no overtime rates are provided in the Schedule and overtime work is approved in advance by the Contracting Officer, overtime rates shall be negotiated. Failure to agree upon these overtime rates shall be treated as a dispute under the Disputes clause of this contract. 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.

      (b) Materials. 

(1) For the purposes of 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) 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.); and

                     (D) Applicable indirect costs.

           (2) If the Contractor furnishes its own materials that meet the definition of a commercial product or commercial service in Federal Acquisition Regulation (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-

                (i) Quantities being acquired; and

                (ii) Actual cost of any modifications necessary because of contract requirements.

           (3) Except as provided for in paragraph (b)(2) of this clause, the Government will reimburse the Contractor for allowable cost of materials provided the Contractor-

                (i) Has made payments for materials in accordance with the terms and conditions of the agreement or invoice; or

                (ii) Ordinarily 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.

           (4) Payment for materials is subject to the Allowable Cost and Payment clause of this contract. The Contracting Officer will determine allowable costs of materials in accordance with FAR subpart  31.2 in effect on the date of this contract.

           (5) The Contractor may include allocable indirect costs and other direct costs to the extent they are-

                (i) Comprised only of costs that are clearly excluded from the hourly rate;

                (ii) Allocated in accordance with the Contractor's written or established accounting practices; and

                (iii) Indirect costs are not applied to subcontracts that are paid at the hourly rates.

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

                (i) Obtain materials at the most advantageous prices available with due regard to securing prompt delivery of satisfactory materials; and

                (ii) Take all cash and trade discounts, rebates, allowances, credits, salvage, commissions, and other benefits. When unable to take advantage of the benefits, the Contractor shall promptly notify the Contracting Officer and give the reasons. The Contractor shall give credit to the Government for cash and trade discounts, rebates, scrap, commissions, and other amounts that have accrued to the benefit of the Contractor, or would have accrued except for the fault or neglect of the Contractor. The Contractor shall not deduct from gross costs the benefits lost without fault or neglect on the part of the Contractor, or lost through fault of the Government.

           (7) Except as provided for in 31.205-26(e) and (f), the Government will not pay profit or fee to the prime Contractor on materials.

      (c) If the Contractor enters into any subcontract that requires consent under the clause at 52.244-2, Subcontracts, without obtaining such consent, the Government is not required to reimburse the Contractor for any costs incurred under the subcontract prior to the date the Contractor obtains the required consent. Any reimbursement of subcontract costs incurred prior to the date the consent was obtained shall be at the sole discretion of the Government.

      (d) 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 performing 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 performing 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.

      (e) 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.

      (f) Audit. At any time before final payment under this contract, the Contracting Officer may request audit of the vouchers and supporting documentation. Each payment previously made shall be subject to reduction to the extent of amounts, on preceding vouchers, that are found by the Contracting Officer or authorized representative not to have been properly payable and shall also be subject to reduction for overpayments or to increase for underpayments. Upon receipt and approval of the voucher designated by the Contractor as the "completion voucher" and supporting documentation, and upon compliance by the Contractor with all terms of this contract (including, without limitation, terms relating to patents and the terms of paragraph (g) of this clause), the Government shall promptly pay any balance due the Contractor. The completion voucher, 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 120 days (or such longer period as the Contracting Officer may approve in writing) from the date of completion.

      (g) Assignment and 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:

           (1) Specified claims in stated amounts, or in estimated amounts if the amounts are not susceptible of exact statement by the Contractor.

           (2) 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.

           (3) 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.

      (h) Interim payments on contracts for other than services. 

(1) Interim payments made prior to the final payment under the contract are contract financing payments. Contract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act.

           (2) The designated payment office will make interim payments for contract financing on the _________ [Contracting Officer insert day as prescribed by agency head; if not prescribed, insert "30th"] day after the designated billing office receives a proper payment request. In the event that the Government requires an audit or other review of a specific payment request to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the specified due date.

      (i) Interim payments on contracts for services. For interim payments made prior to the final payment under this contract, 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.

(End of clause)
 

NONE

Prime’s Interest;
C/R ✖ FFP ✖ 

52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Products and Commercial Services).

52.222-19 Child Labor-Cooperation with Authorities and Remedies.

52.204-21 Basic Safeguarding of Covered Contractor Information Systems.

52.204-23 Prohibition on Contracting for Hardware, Software, and Services Developed or Provided by Kaspersky Lab and Other Covered Entities.

52.204-24 Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment.

52.204-25 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment

52.209-13 Violation of Arms Control Treaties or Agreements-Certification.

52.209-14 Reserve Officer Training Corps and Military Recruiting on Campus.

52.212-3 Offeror Representations and Certifications-Commercial Items.

52.212-4 Contract Terms and Conditions-Commercial Items.

52.219-8 Utilization of Small Business Concerns.

52.219-9 Small Business Subcontracting Plan.

52.212-3 Offeror Representations and Certifications—Commercial Products and Commercial Services.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.242-3 Penalties for Unallowable Costs.

52.245-1 Government Property.

52.219-14 Limitations on Subcontracting.

52.219-16 Liquidated Damages-Subcontracting Plan.

52.219-27 Notice of Service-Disabled Veteran-Owned Small Business Set-Aside.

52.219-28 Post-Award Small Business Program Rerepresentation.

52.219-29 Notice of Set-Aside for, or Sole Source Award to, Economically Disadvantaged Women-Owned Small Business Concerns.

52.219-30 Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program.

52.219-33 Nonmanufacturer Rule.

52.222-18 Certification Regarding Knowledge of Child Labor for Listed End Products.

52.225-6 Trade Agreements Certificate.

52.225-9 Buy American-Construction Materials.

52.225-13 Restrictions on Certain Foreign Purchases.

52.228-11 Pledges of Assets.

52.204-2 Security Requirements.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items.

52.229-12 Tax on Certain Foreign Procurements.

52.219-1 Small Business Program Representations.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items.

52.225-23 Required Use of American Iron, Steel, and Manufactured Goods-Buy American Statute-Construction Materials under Trade Agreements.

52.208-8 Required Sources for Helium and Helium Usage Data.

52.209-7 Information Regarding Responsibility Matters.

52.212-4 Contract Terms and Conditions-Commercial Items.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items.

52.219-3 Notice of HUBZone Set-Aside or Sole Source Award.

52.219-4 Notice of Price Evaluation Preference for HUBZone Small Business Concerns.

52.219-9 Small Business Subcontracting Plan.

52.222-4 Contract Work Hours and Safety Standards -Overtime Compensation.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.219-6 Notice of Total Small Business Set-Aside.

52.219-11 Special 8(a) Contract Conditions.

52.219-12 Special 8(a) Subcontract Conditions.

52.219-13 Notice of Set-Aside of Orders.

52.219-14 Limitations on Subcontracting.

52.219-17 Section 8(a) Award.

52.219-18 Notification of Competition Limited to Eligible 8(a) Concerns

52.219-27 Notice of Service-Disabled Veteran-Owned Small Business Set-Aside.

52.219-28 Post-Award Small Business Program Rerepresentation.

52.219-29 Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program.

52.219-30 Notice of Set-Aside for, or Sole Source Award to, Women-Owned Small Business Concerns Eligible Under the Women-Owned Small Business Program.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.215-20 Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data.

52.215-21 Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data-Modifications.

52.219-9 Small Business Subcontracting Plan.

52.222-50 Combating Trafficking in Persons.

52.225-1 Buy American-Supplies

52.225-3 Buy American-Free Trade Agreements-Israeli Trade Act.

52.225-9 Buy American-Construction Materials.

52.225-11 Buy American-Construction Materials under Trade Agreements.

52.229-13 Taxes—Foreign Contracts in Afghanistan.

52.229-14 Taxes—Foreign Contracts in Afghanistan (North Atlantic Treaty Organization Status of Forces Agreement).

52.232-40 Providing Accelerated Payments to Small Business Subcontractors.

52.246-26 Reporting Nonconforming Items.

52.247-64 Preference for Privately Owned U.S.-Flag Commercial Vessels.

52.222-4 Contract Work Hours and Safety Standards —Overtime Compensation.

52.222-19 Child Labor-Cooperation with Authorities and Remedies.

52.222-30 Construction Wage Rate Requirements-Price Adjustment (None or Separately Specified Method).

52.222-31 Construction Wage Rate Requirements-Price Adjustment (Percentage Method).

52.222-32 Construction Wage Rate Requirements-Price Adjustment (Actual Method).

52.222-41 Service Contract Labor Standards.

52.222-43 Fair Labor Standards Act and Service Contract Labor Standards-Price Adjustment (Multiple Year and Option Contracts).

52.223-11 Ozone-Depleting Substances.

52.223-17 Affirmative Procurement of EPA-designated Items in Service and Construction Contracts.

52.225-7 Waiver of Buy American Statute for Civil Aircraft and Related Articles.

52.225-19 Contractor Personnel in a Designated Operational Area or Supporting a Diplomatic or Consular Mission Outside the United States.

52.225-26 Contractors Performing Private Security Functions Outside the United States.

52.228-11 Pledges of Assets.

52.228-15 Performance and Payment Bonds-Construction.

52.230-5 Cost Accounting Standards-Educational Institution.

52.234-2 Notice of Earned Value Management System-Preaward Integrated Baseline Review.

52.234-3 Notice of Earned Value Management System-Postaward Integrated Baseline Review.

52.234-4 Earned Value Management System.

52.243-7 Notification of Changes.

52.219-4 Notice of Price Evaluation Preference for HUBZone Small Business Concerns.

52.219-7 Notice of Partial Small Business Set-Aside.

52.222-55 Minimum Wages Under Executive Order 13658.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Products and Commercial Services.

52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items).

52.222-50 Combating Trafficking in Persons.

52.204-26 Covered Telecommunications Equipment or Services—Representation.

52.248-3 Value Engineering—Construction.

52.204-26 Covered Telecommunications Equipment or Services-Representation.

52.212-3 Offeror Representations and Certifications—Commercial Items.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items.

52.219-1 Small Business Program Representations.

52.219-6 Notice of Total Small Business Set-Aside.

52.219-7 Notice of Partial Small Business Set-Aside.

52.219-28 Post-Award Small Business Program Representation.

52.222-55 Minimum Wages Under Executive Order 13658.

52.209-12 Certification Regarding Tax Matters.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.204-24 Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment.

52.225-1 Buy American-Supplies

52.225-2 Buy American Certificate.

52.225-3 Buy American-Free Trade Agreements-Israeli Trade Act.

52.225-4 Buy American-Free Trade Agreements-Israeli Trade Act Certificate.

52.225-9 Buy American-Construction Materials.

52.225-11 Buy American-Construction Materials under Trade Agreements.

52.225-21 Required Use of American Iron, Steel, and Manufactured Goods-Buy American Statute-Construction Materials.

52.212-3 Offeror Representations and Certifications-Commercial Items.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders-Commercial Items.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.209-13 Violation of Arms Control Treaties or Agreements-Certification.

52.212-3 Offeror Representations and Certifications-Commercial Items.

52.213-4 Terms and Conditions-Simplified Acquisitions (Other Than Commercial Items).

52.223-3 Hazardous Material Identification and Material Safety Data.

52.225-2 Buy American Certificate.

52.225-4 Buy American-Free Trade Agreements-Israeli Trade Act Certificate.

52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items).

52.204-24 Representation Regarding Certain Telecommunications and Video Surveillance Services or Equipment.

52.204-25 Prohibition on Contracting for Certain Telecommunications and Video Surveillance Services or Equipment.

52.209-5 Certification Regarding Responsibility Matters.

52.212-3 Offeror Representations and Certifications—Commercial Items.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items.

52.228-15 Performance and Payment Bonds—Construction.

52.230-1 Cost Accounting Standards Notices and Certification.

52.230-2 Cost Accounting Standards.

52.230-3 Disclosure and Consistency of Cost Accounting Practices.

52.230-4 Disclosure and Consistency of Cost Accounting Practices—Foreign Concerns.

52.230-5 Cost Accounting Standards—Educational Institution.

52.246-26 Reporting Nonconforming Items.

52.248-1 Value Engineering.

52.213-4 Terms and Conditions—Simplified Acquisitions (Other Than Commercial Items).

52.214-26 Audit and Records—Sealed Bidding.

52.214-27 Price Reduction for Defective Certified Cost or Pricing Data—Modifications—Sealed Bidding.

52.214-28 Subcontractor Certified Cost or Pricing Data—Modifications—Sealed Bidding.

52.215-2 Audit and Records—Negotiation.

52.215-11 Price Reduction for Defective Certified Cost or Pricing Data—Modifications.

52.215-12 Subcontractor Certified Cost or Pricing Data.

52.209-13 Violation of Arms Control Treaties or Agreements-Certification.

52.215-13 Subcontractor Certified Cost or Pricing Data—Modifications.

52.215-21 Requirements for Certified Cost or Pricing Data and Data Other Than Certified Cost or Pricing Data—Modifications.

52.219-9 Small Business Subcontracting Plan.

52.203-12 Limitation on Payments to Influence Certain Federal Transactions.

52.203-16 Preventing Personal Conflicts of Interest.

52.212-3 Offeror Representations and Certifications—Commercial Items.

52.212-5 Contract Terms and Conditions Required To Implement Statutes or Executive Orders—Commercial Items.

52.222-36 Equal Opportunity for Workers with Disabilities.

52.227-1 Authorization and Consent.

52.227-2 Notice and Assistance Regarding Patent and Copyright Infringement.

252.225-7051 Prohibition on Acquisition of Certain Foreign Commercial Satellite Services.

252.204-7017 Prohibition on the Acquisition of Covered Defense Telecommunications Equipment or Services-Representation.

252.225-7050 Disclosure of Ownership or Control by the Government of a Country that is a State Sponsor of Terrorism.

252.229-7000 Invoices Exclusive of Taxes or Duties.

252.225-7052 Restriction on the Acquisition of Certain Magnets and Tungsten.

252.204-7018 Prohibition on the Acquisition of Covered Defense Telecommunications Equipment or Services.

252.245-7002 Reporting Loss of Government Property.

252.225-7975 Additional Access to Contractor and Subcontractor Records (DEVIATION 2020-O0001)

252.249-7002 Notification of Anticipated Contract Termination or Reduction.

252.225-7012 Preference for Certain Domestic Commodities.

252.227-7037 Validation of Restrictive Markings on Technical Data.

252.204-7019 Notice of NIST SP 800-171 DoD Assessment Requirements.

252.204-7020 NIST SP 800-171 DoD Assessment Requirements.

252.211-7007 Reporting of Government-Furnished Property.

552.215-71 Examination of Records by GSA (Multiple Award Schedule).

552.204-9 Personal Identity Verification Requirements.

552.243-71 Equitable Adjustments.

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