§ 15. — Transfers of contracts; assignments; assignee not subject to reduction or setoff.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 41USC15]
TITLE 41--PUBLIC CONTRACTS
CHAPTER 1--GENERAL PROVISIONS
Sec. 15. Transfers of contracts; assignments; assignee not
subject to reduction or setoff
(a) Transfer
No contract or order, or any interest therein, shall be transferred
by the party to whom such contract or order is given to any other party,
and any such transfer shall cause the annulment of the contract or order
transferred, so far as the United States is concerned. All rights of
action, however, for any breach of such contract by the contracting
parties, are reserved to the United States.
(b) Assignment
The provisions of subsection (a) of this section shall not apply in
any case in which the moneys due or to become due from the United States
or from any agency or department thereof, under a contract providing for
payments aggregating $1,000 or more, are assigned to a bank, trust
company, or other financing institution, including any Federal lending
agency, provided:
(1) That, in the case of any contract entered into after October
9, 1940, no claim shall be assigned if it arises under a contract
which forbids such assignment.
(2) That, unless otherwise expressly permitted by such contract,
any such assignment shall cover all amounts payable under such
contract and not already paid, shall not be made to more than one
party, and shall not be subject to further assignment, except that
any such assignment may be made to one party as agent or trustee for
two or more parties participating in such financing.
(3) That, in the event of any such assignment, the assignee
thereof shall file written notice of the assignment together with a
true copy of the instrument of the assignment with--
(A) the contracting officer or the head of his department or
agency;
(B) the surety or sureties upon the bond or bonds, if any,
in connection with such contract; and
(C) the disbursing officer, if any, designated in such
contract to make payment.
(c) Validity of assignment
Notwithstanding any law to the contrary governing the validity of
assignments, any assignment pursuant to this section shall constitute a
valid assignment for all purposes.
(d) Assignee liability
In any case in which moneys due or to become due under any contract
are or have been assigned pursuant to this section, no liability of any
nature of the assignor to the United States or any department or agency
thereof, whether arising from or independently of such contract, shall
create or impose any liability on the part of the assignee to make
restitution, refund, or repayment to the United States of any amount
heretofore since July 1, 1950, or hereafter received under the
assignment.
(e) Amendment of contract
Any contract of the Department of Defense, the General Services
Administration, the Department of Energy, or any other department or
agency of the United States designated by the President, except any such
contract under which full payment has been made, may, upon a
determination of need by the President, provide or be amended without
consideration to provide that payments to be made to the assignee of any
moneys due or to become due under such contract shall not be subject to
reduction or setoff. Each such determination of need shall be published
in the Federal Register.
(f) Assignor liability arising independent of contract
If a provision described in subsection (e) of this section or a
provision to the same general effect has been at any time heretofore or
is hereafter included or inserted in any such contract, payments to be
made thereafter to an assignee of any moneys due or to become due under
such contract shall not be subject to reduction or setoff for any
liability of any nature of the assignor to the United States or any
department or agency thereof which arises independently of such
contract, or hereafter for any liability of the assignor on account of--
(1) renegotiation under any renegotiation statute or under any
statutory renegotiation article in the contract;
(2) fines;
(3) penalties (which term does not include amounts which may be
collected or withheld from the assignor in accordance with or for
failure to comply with the terms of the contract); or
(4) taxes, social security contributions, or the withholding or
non withholding of taxes or social security contributions, whether
arising from or independently of such contract.
(g) Accrued rights and obligations
Except as herein otherwise provided, nothing in this section shall
be deemed to affect or impair rights or obligations heretofore accrued.
(R.S. Sec. 3737; Oct. 9, 1940, ch. 779, Sec. 1, 54 Stat. 1029; May 15,
1951, ch. 75, 65 Stat. 41; Pub. L. 103-355, title II, Sec. 2451, Oct.
13, 1994, 108 Stat. 3324; Pub. L. 104-106, div. D, title XLIII,
Sec. 4321(i)(9), Feb. 10, 1996, 110 Stat. 676.)
Codification
R.S. Sec. 3737 derived from act July 17, 1862, ch. 200, Sec. 14, 12
Stat. 596.
Amendments
1996--Subsec. (g). Pub. L. 104-106 substituted ``rights or
obligations'' for ``rights of obligations''.
1994--Pub. L. 103-355, Sec. 2451, amended section generally,
revising it as follows:
Subsec. (a), designated first par. as subsec. (a) and substituted
``is concerned'' for ``are concerned''.
Subsec. (b), designated second par. as subsec. (b) and inserted
subpar. and cl. designations; substituted in introductory provisions
``provisions of subsection (a) of this section'' for ``provisions of the
preceding paragraph'' and ``lending agency, provided:'' for ``lending
agency: Provided,''; in par. designations, ``That,'' for ``That'' and
periods for semicolons at end; and struck out former par. 1 which read
as follows: ``That in the case of any contract entered into prior to
October 9, 1940, no claim shall be assigned without the consent of the
head of the department or agency concerned;''.
Subsec. (c), designated third par. as subsec. (c) and substituted
``this section'' for ``this section,''.
Subsec. (d), designated fourth par. as subsec. (d).
Subsec. (e), designated first part of fifth par. as subsec. (e),
substituted ``Department of Energy'' for ``Atomic Energy Commission'',
``may, upon a determination of need by the President, provide'' for
``may, in time of war or national emergency proclaimed by the President
(including the national emergency proclaimed December 16, 1950) or by
Act or joint resolution of the Congress and until such war or national
emergency has been terminated in such manner, provide'', and ``subject
to reduction or set-off.'' for ``subject to reduction or set-off,'', and
inserted ``Each such determination of need shall be published in the
Federal Register.''
Subsec. (f), designated last part of fifth par. as subsec. (f),
realigned margins of pars. (1) to (4) and substituted semicolons for
commas at end, and substituted, in introductory provisions, ``If a
provision described in subsection (e) of this section or a provision to
the same general effect has been at any time heretofore or is hereafter
included or inserted in any such contract, payments to be made
thereafter to an assignee of any moneys due or to become due under such
contract shall not be subject to reduction or setoff for any liability
of any nature of the assignor to the United States or any department or
agency thereof which arises independently of such contract, or hereafter
for any liability of the assignor on account of--'' for ``and if such
provision or one to the same general effect has been at any time
heretofore or is hereafter included or inserted in any such contract,
payments to be made thereafter to an assignee of any moneys due or to
become due under such contract, whether during or after such war or
emergency, shall not be subject to reduction or set-off for any
liability of any nature of the assignor to the United States or any
department or agency thereof which arises independently of such
contract, or hereafter for any liability of the assignor on account of''
and, in par. (4), ``non withholding'' for ``nonwithholding''.
Subsec. (g), designated sixth par. as subsec. (g).
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.
Effective Date of 1996 Amendment
For effective date and applicability of amendment by Pub. L. 104-
106, see section 4401 of Pub. L. 104-106, set out as a note under
section 251 of this title.
Effective Date of 1994 Amendment
For effective date and applicability of amendment by Pub. L. 103-
355, see section 10001 of Pub. L. 103-355, set out as a note under
section 251 of this title.
Delegation of Authority
Memorandum of President of the United States, Oct. 3, 1995, 60 F.R.
52289, provided:
Memorandum for the Heads of Executive Departments and Agencies
Section 2451 of the Federal Acquisition Streamlining Act of 1994,
Public Law 103-355 ([amending] 41 U.S.C. 15) (``Act''), provides, in
part, that ``[a]ny contract of the Department of Defense, the General
Services Administration, the Department of Energy or any other
department or agency of the United States designated by the President,
except [contracts where] . . . full payment has been made, may, upon a
determination of need by the President, provide or be amended without
consideration to provide that payments to be made to the assignee of any
moneys due or to become due under [the] contract shall not be subject to
reduction or set-off.''
By the authority vested in me as President by the Constitution and
the laws of the United States of America, including section 301 of title
3, United States Code, I hereby designate all other departments and
agencies of the United States as subject to this provision. Furthermore,
I hereby delegate to the Secretaries of Defense and Energy, the
Administrator of General Services, and the heads of all other
departments and agencies, the authority under section 2451 of the Act to
make determinations of need for their respective agency's contracts,
subject to such further guidance as issued by the Office of Federal
Procurement Policy.
The authority delegated by this memorandum may be further delegated
within the departments and agencies.
This memorandum shall be published in the Federal Register.
William J. Clinton.
Non-Applicability of National Emergencies Act
The provisions of the National Emergencies Act (Pub. L. 94-412,
Sept. 14, 1976, 90 Stat. 1255) not applicable to the powers and
authorities conferred by this section and actions taken hereunder, see
section 1651 of Title 50, War and National Defense.
Moneys Due Under Letters of Commitment Issued in Connection With
Disposition of Surplus Agricultural Commodities
Moneys due under letters of commitment issued against funds or
guaranties of funds supplied by Commodity Credit Corporation in
connection with disposition of surplus agricultural commodities to
foreign countries, as assignable under the Assignment of Claims Act of
1940, which constitutes this section and former section 203 of Title 31,
Money and Finance, see section 1702 of Title 7, Agriculture.
Section Referred to in Other Sections
This section is referred to in title 22 section 2392; title 50
section 1651; title 50 App. section 1215.
