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Home > U Chi L Rev > Vol. 20 (1952) > Iss. 1
The Assignment of Claims Act of 1940: Assignee v. Surety
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Editors, Law Review (1952) "The Assignment of Claims Act of 1940: Assignee v. Surety," University of Chicago Law Review : Vol. 20: Iss. 1, Article 7. Available at: https://chicagounbound.uchicago.edu/uclrev/vol20/iss1/7
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32.800 Scope of subpart.
This subpart prescribes policies and procedures for the assignment of claims under the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727 , 41 U.S.C.6305 ) (hereafter referred to as "the Act").
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TOPN: Assignment of Claims Act of 1940
Laws acquire popular names as they make their way through Congress. Sometimes these names say something about the substance of the law (as with the '2002 Winter Olympic Commemorative Coin Act'). Sometimes they are a way of recognizing or honoring the sponsor or creator of a particular law (as with the 'Taft-Hartley Act'). And sometimes they are meant to garner political support for a law by giving it a catchy name (as with the 'USA Patriot Act' or the 'Take Pride in America Act') or by invoking public outrage or sympathy (as with any number of laws named for victims of crimes). History books, newspapers, and other sources use the popular name to refer to these laws. Why can't these popular names easily be found in the US Code?
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The process of incorporating a newly-passed piece of legislation into the Code is known as "classification" -- essentially a process of deciding where in the logical organization of the Code the various parts of the particular law belong. Sometimes classification is easy; the law could be written with the Code in mind, and might specifically amend, extend, or repeal particular chunks of the existing Code, making it no great challenge to figure out how to classify its various parts. And as we said before, a particular law might be narrow in focus, making it both simple and sensible to move it wholesale into a particular slot in the Code. But this is not normally the case, and often different provisions of the law will logically belong in different, scattered locations in the Code. As a result, often the law will not be found in one place neatly identified by its popular name. Nor will a full-text search of the Code necessarily reveal where all the pieces have been scattered. Instead, those who classify laws into the Code typically leave a note explaining how a particular law has been classified into the Code. It is usually found in the Note section attached to a relevant section of the Code, usually under a paragraph identified as the "Short Title".
Our Table of Popular Names is organized alphabetically by popular name. You'll find three types of link associated with each popular name (though each law may not have all three types). One, a reference to a Public Law number, is a link to the bill as it was originally passed by Congress, and will take you to the LRC THOMAS legislative system, or GPO FDSYS site. So-called "Short Title" links, and links to particular sections of the Code, will lead you to a textual roadmap (the section notes) describing how the particular law was incorporated into the Code. Finally, acts may be referred to by a different name, or may have been renamed, the links will take you to the appropriate listing in the table.
Assignment of Claims Act of 1940
Oct. 9, 1940, ch. 779, 54 Stat. 1029
Office of the Federal Register (OFR)
Executive Orders
Executive Order 10840--Designating the Federal Aviation Administration as an agency to have certain contractual authority under the Assignment of Claims Act of 1940, as amended
Source: The provisions of Executive Order 10840 of Sept. 30, 1959, appear at 24 FR 7939, 3 CFR, 1959-1963 Comp., p. 374, unless otherwise noted.
Whereas the Assignment of Claims Act of 1940 (54 Stat. 1029), as amended by the Act of September 13, 1982, 96 Stat. 976 (31 U.S.C. 3727), contains the following provisions:
During a war or national emergency proclaimed by the President or declared by law and ended by proclamation or law, a contract with the Department of Defense, the General Services Administration, the Department of Energy (when carrying out duties and powers formerly carried out by the Atomic Energy Commission), or other agency the President designates may provide, or may be changed without consideration to provide, that a future payment under the contract to an assignee is not subject to reduction or setoff. A payment subsequently due under the contract (even after the war or emergency is ended) shall be paid to the assignee without a reduction or setoff for liability of the assignor--
(1) to the Government independent of the contract; or
(2) because of renegotiation, fine, penalty (except an amount that may be collected or withheld under, or because the assignor does not comply with, the contract), taxes, social security contributions, or withholding or failing to withhold taxes or social security contributions, arising from, or independent of, the contract.
An assignee under this section does not have to make restitution of, refund, or repay the amount received because of the liability of the assignor to the Government that arises from or is independent of, the contract.
The Government may not collect or reclaim money paid to a person receiving an amount under an assignment or allotment of pay or allowances authorized by law when liability may exist because of the death of the person making the assignment or allotment.
AND WHEREAS it appears that it would be in the public interest to make those provisions applicable to the Federal Aviation Administration:
NOW, THEREFORE, by virtue of the authority vested in me by the above-quoted statutory provisions, I hereby designate the Federal Aviation Administration as an agency of the United States to which such statutory provisions shall apply in the same manner and to the same extent that they apply to the Department of Defense, the General Services Administration, and the Atomic Energy Commission. 1
Editorial note: Executive Order 10840 is amended by Executive Order 11382 of Nov. 28, 1967, 32 FR 16247, 3 CFR, 1966-1970 Comp., p. 691, and Executive Order 12608 of Sept. 9, 1987, 52 FR 34617, 3 CFR, 1987 Comp., p. 245. Additionally, section 5(b) of Executive Order 10840 states that the utilization by the Federal Aviation Administration of the authority made available to it by Executive Order 10840, as amended, shall be subject to direction and control by the Secretary of Transportation.
1 Editorial note: The Atomic Energy Commission was abolished and its functions transferred to the Energy Research and Development Administration and the Nuclear Regulatory Commission by the Energy Reorganization Act of 1974 (Pub. L. 93-438, 88 Stat. 1233). The functions of the Energy Research and Development Administration were transferred to the Department of Energy by the Department of Energy Organization Act (91 Stat. 565, 42 U.S.C. 7151), effective Oct. 1, 1977.
Assignment of Claims Act and Federal Contracts
In support of the build up for World War II, the U.S. federal government put into place a set of rules in 1940 to assist in the financing of government contracts. This is commonly called the Assignment of Claims Act of 1940 and it allows for the transfer or making over by the contractor to a bank, trust company, or other financing institution like an invoice factoring firm, as security for a loan to the contractor, of its right to be paid by the government for contract performance. The Act is described in Federal Acquisition Regulation (FAR) 32.800 and sections underneath. This Act is still in effect today.
Under the Assignment of Claims Act, a company may assign monies due or to become due under a contract to a financing institution if the contract does not expressly prohibit assignment and the assignee sends a written notice of assignment together with a true copy of the assignment instrument to the Contracting Officer or the Agency Head and the Disbursing Officer designated in the contract to make payment. Amounts due for individual orders for $1,000. or more may be assigned.
This procedure is similar to the Uniform Commercial Code (UCC) assignment and notification of assignment in state law. In practical terms a difference is that with the UCC all invoice payments to a particular supplier are assigned to the factoring company regardless of which order or contract was responsible for the payment. With the Assignment of Claims Act, a separate assignment needs to be made for each contract to be financed even if they are in the same agency.
Since the Assignment of Claims Act has been in place for over 70 years it and its procedures are widely known by contracting officers and can be put into place quickly for contracts desired to be financed.
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(a) Any assignment of claims that has been made under the Act to any type of financing institution listed in 32.802(b) may thereafter be further assigned and reassigned to any such institution if the conditions in 32.802(d) and (e) continue to be met. (b) A contract may prohibit the assignment of claims if the agency determines the prohibition to be in the Government's interest.
31 U.S. Code § 3727 - Assignments of claims. a transfer or assignment of any part of a claim against the United States Government or of an interest in the claim; or. the authorization to receive payment for any part of the claim. An assignment may be made only after a claim is allowed, the amount of the claim is decided, and a warrant for ...
Formerly, assignment of claims against the government had been barred.2 The Act of 1940 enabled lenders to accept as se-curity assignments by contractors of payments due and to become due under such contracts. Banking interests attribute the success of the World. War II V-loan program to the liberalizing effect of the 1940 Act.3.
Moneys due or to become due under the contract described above have been assigned to the undersigned under the provisions of the Assignment of Claims Act of 1940, as amended, (31 U.S.C. 3727, 41 U.S.C. 6305). A true copy of the instrument of assignment executed by the Contractor on _____ [date], is attached to the original notice.
As prescribed in 32.806 (a) (1), insert the following clause: Assignment of Claims (May 2014) (a) The Contractor, under the Assignment of Claims Act, as amended, 31 U.S.C.3727, 41 U.S.C.6305 (hereafter referred to as "the Act"), may assign its rights to be paid amounts due or to become due as a result of the performance of this contract to a ...
52.232-23 Assignment of Claims. (a) The Contractor, under the Assignment of Claims Act, as amended, 31 U.S.C.3727, 41 U.S.C.6305 (hereafter referred to as "the Act"), may assign its rights to be paid amounts due or to become due as a result of the performance of this contract to a bank, trust company, or other financing institution, including ...
The Assignment of Claims Act of 1940, as amended, referred to in subsec. (e), means act Oct. 9, 1940, ch. 779, 54 Stat. 1029, which added the second and third pars. to section 203 of former Title 31, Money and Finance, and the second and third pars. to section 15 of former Title 41, Public Contracts.
claims act of 1940. and the 1951. amendments. james m. condon*. It is clear that neither the Assignment of Claims Act of 19401 or its. 1951 amendments2 altered the priorities established by the courts. In decisions as recent as 1969 and 1970 in National Shawmut Bank. of Boston v. New Amsterdam Casualty Company and in Home.
This subpart prescribes policies and procedures for the assignment of claims under the Assignment of Claims Act of 1940, as amended, (31 U.S.C. 3727, 41 U.S.C. 6305) (hereafter referred to as the Act). [48 FR 42328, Sept. 19, 1983, as amended at 51 FR 2665, Jan. 17, 1986; 79 FR 24212, Apr. 29, 2014]
The Assignment of Claims Act (31 U.S.C. § 3727, 41 U.S.C. § 6305) was passed in 1940 and provides for an important function in government contract financing. One of the benefits of the assignment of claims policy is to authorize third-party financial institutions to collect on payments made to contractors for performance of a federal contract.
1951-Act May 15, 1951, made it clear that a bank or other financing institution taking an assignment of claims pursuant to this section would not be subject to later recovery by the Government of amounts previously paid to the bank by the assignee except in cases of fraud. 1940-Act Oct. 9, 1940, inserted second and third pars.
The Assignment of Claims Act of 1940: Assignee v. Surety. Authors. Law Review Editors Follow. Start Page. 119. Recommended Citation. Editors, Law Review (1952) "The Assignment of Claims Act of 1940: Assignee v. Surety," University of Chicago Law Review: Vol. 20: Iss. 1, Article 7.
The Assignment of Claims Act of 1940 (Assignment of Claims Act or Act) 3 . addressed this problem by allowing the government contractor to assign its government receivables as collateral for commercial loans. 4. Much of the lending to government contractors takes the form of lines
Assignment of Claims Act of 1940, as amended, 31 U. S. C. 203, 41 U. S. C. 15 (1970). Under 31 U. S. C. 203 (1970) moneys due under a Government contract may be assigned to a "bank, trust company, or other financing institution. " Assignees are required to comply -with requirement for written notice of assignments as provided in the Act. ...
On May 15,1951, an amendment to the Assignment of Claims Act of 1940 became law. Its purpose is to facilitate the financing of defense contracts by banks and other financing institutions. This legislation clarifies the rights of financing institutions taking assign ments of moneys due or to become due under government contracts as security for ...
32.800 Scope of subpart. 32.800. Scope of subpart. This subpart prescribes policies and procedures for the assignment of claims under the Assignment of Claims Act of1940, as amended, ( 31 U.S.C.3727, 41 U.S.C.6305) (hereafter referred to as "the Act"). Parent topic: Subpart 32.8 - Assignment of Claims.
Assignment of Claims Act of 1940, approved October 9,1940 (54 Stat. 1029), is amended by striking out all after clause 3 of the proviso and inserting in lieu thereof the following: "4. That in the event of any such assignment, the assignee thereof shall file written notice of the assignment^ogether with a true copy of
The United States Code is meant to be an organized, logical compilation of the laws passed by Congress. At its top level, it divides the world of legislation into fifty topically-organized Titles, and each Title is further subdivided into any number of logical subtopics. In theory, any law -- or individual provisions within any law -- passed by ...
Executive Orders. Executive Order 10840--Designating the Federal Aviation Administration as an agency to have certain contractual authority under the Assignment of Claims Act of 1940, as amended. Source: The provisions of Executive Order 10840 of Sept. 30, 1959, appear at 24 FR 7939, 3 CFR, 1959-1963 Comp., p. 374, unless otherwise noted.
We are often asked, by lenders and borrowers alike, what the current market trend is with respect to lenders requiring documentation proscribed by the Federal Assignment of Claims Act of 1940, as ...
Assignments of claims. (a) In this section, "assignment" means-. (1) a transfer or assignment of any part of a claim against the United States Government or of an interest in the claim; or. (2) the authorization to receive payment for any part of the claim. (b) An assignment may be made only after a claim is allowed, the amount of the claim is ...
Assignment of Claims Act means the Assignment of Claims Act of 1940 (41 U.S.C. Section 15, 31 U.S.C. Section 3737, and 31 U.S.C. Section 3727), including all amendments thereto and regulations promulgated thereunder. United States Bankruptcy Code means the Bankruptcy Reform Act of 1978, as amended and as codified in Title 11 of the United ...
Assignment of Claims Act and Federal Contracts. In support of the build up for World War II, the U.S. federal government put into place a set of rules in 1940 to assist in the financing of government contracts. This is commonly called the Assignment of Claims Act of 1940 and it allows for the transfer or making over by the contractor to a bank ...
the meaning of the Trustee and Wills (Emergency Provisions) Act 1940, but has some other person within the jurisdiction appointed under power of attorney to act for the person, administration may be granted to such attorney, but on behalf of the person entitled thereto, and on such terms and conditions as the Court thinks fit.