52.232-12.dita

  <p class="- topic/p " id="d3510e37">

  <ph props="autonumber" class="- topic/ph ">(b)</ph>

  <i class="+ topic/ph hi-d/i ">Special account.</i> Until (1) the Contractor has liquidated all advance payments made under the contract and related interest charges and (2) the administering office has approved in writing the release of any funds due and payable to the Contractor, all advance payments and other payments under this</p>

  xtrc="52.232-12_d3490e60"

  class="- topic/cite "

  xtrf="GFI">_____ [<i class="+ topic/ph hi-d/i ">insert the name of the financial institution</i>]</cite>. None of the funds in the special account shall be mingled with other funds of the Contractor. Withdrawals from the special account may be made only by check of the Contractor countersigned by the Contracting Officer or a Government countersigning agent designated in writing by the Contracting Officer.</p>

  <i class="+ topic/ph hi-d/i ">Use of funds</i>. The Contractor may withdraw funds from the special account only to pay for properly allocable, allowable, and reasonable costs for direct materials, direct labor, and indirect costs. Other withdrawals require approval in writing by the administering office. Determinations of whether costs are properly allocable, allowable, and reasonable shall be in accordance with generally accepted accounting principles, subject to any applicable subparts of <xref outputclass="fm:Part"

  href="Part_31.dita#FAR_Part_31"

  base="i1086363"

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  <section outputclass="Alternate" class="- topic/section "><?FM MARKER [Alt] Start?>

  <p class="- topic/p " id="d3506e498">

  <i class="+ topic/ph hi-d/i ">Alternate I </i>

  <p outputclass="NoIndent" class="- topic/p ">However, for this contract, countersignature on behalf of the Government will not be required unless it is determined necessary by the administering office.</p>

  <?FM MARKER [Alt] End?>

  <?FM MARKER [Alt] Start?>

  <p outputclass="List1" class="- topic/p ">(f) <i class="+ topic/ph hi-d/i ">Interest</i>. (1) The Contractor shall pay interest to the Government on the daily unliquidated advance payments at the daily rate specified in paragraph (f)(3) of this clause. Interest shall be computed at the end of each calendar month for the actual number of days involved. For the purpose of computing the interest charge, the following shall be observed:</p>

  <p outputclass="List3" class="- topic/p ">(i) Advance payments shall be considered as increasing the unliquidated balance as of the date of the advance payment check.</p>

  <p outputclass="List3" class="- topic/p ">(ii) Repayments by Contractor check shall be considered as decreasing the unliquidated balance as of the date on which the check is received by the Government authority designated by the Contracting Officer.</p>

  <p outputclass="List2" class="- topic/p ">(2) Interest charges resulting from the monthly computation shall be deducted from any payments on account of the fixed-fee due to the Contractor. If the accrued interest exceeds the payment due, any excess interest shall be carried forward and deducted from subsequent payments of the contract price or fixed-fee. Interest carried forward shall not be compounded. Interest on advance payments shall cease to accrue upon (i) satisfactory completion or (ii) termination of the contract for the convenience of the Government. The Contractor shall charge interest on advance payments to subcontractors in the manner described above and credit the interest to the Government. Interest need not be charged on advance payments to nonprofit educational or research subcontractors for experimental, developmental, or research work.</p>

  <?FM MARKER [Alt] End?>

  <?FM MARKER [Alt] Start?>

  <p outputclass="List1" class="- topic/p ">(b) <i class="+ topic/ph hi-d/i ">Use of funds</i>. The Contractor may use advance payment funds only to pay for properly allocable, allowable, and reasonable costs for direct materials, direct labor, and indirect costs. Determinations of whether costs are properly allocable, allowable, and reasonable shall be in accordance with generally accepted accounting principles, subject to any applicable subparts of <xref outputclass="fm:Part"

  href="Part_31.dita#FAR_Part_31"

  base="i1086363"

  <p outputclass="List1" class="- topic/p ">(c) <i class="+ topic/ph hi-d/i ">Repayment to the Government</i>. At any time, the Contractor may repay all or any part of the funds advanced by the Government. Whenever requested in writing to do so by the administering office, the Contractor shall repay to the Government any part of unliquidated advance payments considered by the administering office to exceed the Contractor's current requirements or the amount specified in paragraph (a) of this clause.</p>

  <p outputclass="List1" class="- topic/p ">(d) <i class="+ topic/ph hi-d/i ">Maximum payment.</i> When the sum of all unliquidated advance payments, unpaid interest charges, and other payments exceed <cite outputclass="SingleLine"

  xtrc="52.232-12_d3490e1056"

  xtrc="52.232-12_d3490e1062"

  class="- topic/cite "

  xtrf="GFI">____ [<i class="+ topic/ph hi-d/i ">insert an amount not higher than 10 percent of the stated contract amount inserted in this paragraph</i>]</cite>. Any payments withheld under this paragraph shall be applied to reduce the unliquidated advance payments. If full liquidation has been made, payments under the contract shall resume.</p>

  <p outputclass="List3" class="- topic/p ">(i) Advance payments shall be considered as increasing the unliquidated balance as of the date of the advance payment check;</p>

  <p outputclass="List3" class="- topic/p ">(ii) Repayments by Contractor check shall be considered as decreasing the unliquidated balance as of the date on which the check is received by the Government authority designated by the Contracting Officer; and</p>

  <p outputclass="List3" class="- topic/p ">(iii) Liquidations by deductions from Government payments to the Contractor shall be considered as decreasing the unliquidated balance as of the date of the check for the reduced payment.</p>

  <p outputclass="List1" class="- topic/p ">(f)<i class="+ topic/ph hi-d/i ">Lien on property under contract</i>. (1) All advance payments under this contract, together with interest charges, shall be secured, when made, by a lien in favor of the Government, paramount to all other liens, on the supplies or other things covered by this contract and on all material and other property acquired for or allocated to the performance of this contract, except to the extent that the Government by virtue of any other terms of this contract, or otherwise, shall have valid title to the supplies, materials, or other property as against other creditors of the Contractor.</p>

  <p outputclass="List2" class="- topic/p ">(2) The Contractor shall identify, by marking or segregation, all property that is subject to a lien in favor of the Government by virtue of any terms of this contract in such a way as to indicate that it is subject to a lien and that it has been acquired for or allocated to performing this contract. If, for any reason, the supplies, materials, or other property are not identified by marking or segregation, the Government shall be considered to have a lien to the extent of the Government's interest under this contract on any mass of property with which the supplies, materials, or other property are commingled. The Contractor shall maintain adequate accounting control over the property on its books and records.</p>

  <p outputclass="List2" class="- topic/p ">(3) If, at any time during the progress of the work on the contract, it becomes necessary to deliver to a third person any items or materials on which the Government has a lien, the Contractor shall notify the third person of the lien and shall obtain from the third person a receipt in duplicate acknowledging the existence of the lien. The Contractor shall provide a copy of each receipt to the Contracting Officer.</p>

  <p outputclass="List3" class="- topic/p ">(i) The termination inventory is sold or retained; and</p>

  <p outputclass="List3" class="- topic/p ">(ii) The sale proceeds or retention credits are applied to reduce any outstanding advance payments.</p>

  <p outputclass="List3" class="- topic/p ">(i) Insurance on plant and equipment against fire and other hazards, to the extent that similar properties are usually insured by others operating plants and properties of similar character in the same general locality;</p>

  <p outputclass="List3" class="- topic/p ">(ii) Adequate insurance against liability on account of damage to persons or property; and</p>

  <p outputclass="List3" class="- topic/p ">(iii) Adequate insurance under all applicable workers' compensation laws.</p>

  <p outputclass="List3" class="- topic/p ">(i) Maintain this insurance;</p>

  <p outputclass="List3" class="- topic/p ">(ii) Maintain adequate insurance on any materials, parts, assemblies, subassemblies, supplies, equipment, and other property acquired for or allocable to this contract and subject to the Government lien under paragraph (f) of this clause; and</p>

  <p outputclass="List3" class="- topic/p ">(iii) Furnish any evidence with respect to its insurance that the administering office may require.</p>

  <p outputclass="List1" class="- topic/p ">(h) <i class="+ topic/ph hi-d/i ">Default</i>. (1)If any of the following events occur, the Government may, by written notice to the Contractor, withhold further payments on this contract:</p>

  <p outputclass="List3" class="- topic/p ">(i) Termination of this contract for a fault of the Contractor.</p>

  <p outputclass="List4" class="- topic/p ">(A) Observe any of the conditions of the advance payment terms;</p>

  <p outputclass="List4" class="- topic/p ">(B) Comply with any material term of this contract;</p>

  <p outputclass="List4" class="- topic/p ">(C) Make progress or maintain a financial condition adequate for performance of this contract;</p>

  <p outputclass="List2" class="- topic/p ">(6) The assets of the Contractor are not subject to any lien or encumbrance of any character except for current taxes not delinquent, and except as shown in the financial statements furnished by the Contractor. There is no current assignment of claims under any contract affected by these advance payment provisions.</p>

  <p outputclass="List2" class="- topic/p ">(7) All information furnished by the Contractor to the administering office in connection with each request for advance payments is true and correct.</p>

  <p outputclass="List2" class="- topic/p ">(8) These representations shall be continuing and shall be considered to have been repeated by the submission of each invoice for advance payments.</p>

  <p outputclass="List2" class="- topic/p ">(1) Mortgage, pledge, or otherwise encumber or allow to be encumbered, any of the assets of the Contractor now owned or subsequently acquired, or permit any preexisting mortgages, liens, or other encumbrances to remain on or attach to any assets of the Contractor which are allocated to performing this contract and with respect to which the Government has a lien under this contract;</p>

  <p outputclass="List2" class="- topic/p ">(2) Sell, assign, transfer, or otherwise dispose of accounts receivable, notes, or claims for money due or to become due;</p>

  <p outputclass="List2" class="- topic/p ">(3) Declare or pay any dividends, except dividends payable in stock of the corporation, or make any other distribution on account of any shares of its capital stock, or purchase, redeem, or otherwise acquire for value any of its stock, except as required by sinking fund or redemption arrangements reported to the administering office incident to the establishment of these advance payment provisions;</p>

  class="- topic/cite "

  xtrf="GFI">______</cite> ayear;</p>

  <p outputclass="List2" class="- topic/p ">(9) Change substantially the management, ownership, or control of the corporation;</p>

  <p outputclass="List2" class="- topic/p ">(11) Deposit any of its funds except in a bank or trust company insured by the Federal Deposit Insurance Corporation or a credit union insured by the National Credit Union Administration;</p>

  <p outputclass="List2" class="- topic/p ">(12) Create or incur indebtedness for advances, other than advances to be made under the terms of this contract, or for borrowings;</p>

  <p outputclass="List2" class="- topic/p ">(13) Make or covenant for capital expenditures exceeding $<cite outputclass="SingleLine"