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The Assignment of Claims Act of 1940, 31 U.S.C. § 3727, 41 U.S.C. § 15 (the "Act"), permits a company to assign monies due or to become due under a contract, but only if certain conditions are met. The Act and implementing regulations, 48 C.F.R. sub-part 32.8, lay out the procedures. A contractor may assign monies due or to become due under a contract if all the following conditions are met, "

(1) the contract specifies payments aggregating $1,000.00 or more;

(2) the assignment is made to a bank, trust company, or other financing institution, including any federal lending agency;

(3) the contract does not prohibit the assignment;

(4) unless otherwise expressly provided for in the contract, the assignment---

a) covers all unpaid amounts payable under the contract;

b) is made only to one party, except that any assignment may be made to one party as agent or trustee for two or more parties participating in the financing of the contract; and

c) is not subject to further assignment.

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14y ago

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