The Anti-Assignments Acts (31 U.S.C. Section 3727 and 41 U.S.C. Section 15) invalidate assignments of government contracts (assigning contract proceeds to a third party) unless specific conditions are met. The Government may waive the requirements of the Anti-Assignment Acts if it is aware of, assents to, and recognizes the assignment.
Federal Acquisition Regulation (FAR) 32.8, “Assignment of Claims”, sets forth the requirement that the assignment must be made to a “bank, trust company, or other financing institution, including any Federal lending agency.”
The Government’s actions must rise to the level of “clear assent” to the assignment to demonstrate a waiver.
On July 8, 2010, the United States Court of Appeals, Federal Circuit affirmed the decision of the Court of Federal Claims granting the government’s summary judgment on an assignment case. While the government knew about the assignment, it never clearly assented and thus the assignee third party was not entitled to the payment. Ham Investments, LLC v. U.S., 2010 WL 2788206, (C.A.Fed., July 8, 2010).
Contact Karen S Hindson of Hindon & Melton LLC for more information about your government contracts issue.