Assignment of Claims
The federal mechanism that lets a contractor direct payment on a government contract to a financing partner.
Assignment of claims is the process — established by the Assignment of Claims Act and implemented in FAR Subpart 32.8 — that lets a government contractor assign its right to be paid under a contract to a financing institution. It's the legal foundation that makes government invoice factoring possible.
To put it in place, the financing partner files a Notice of Assignment with the contracting officer and the disbursing (payment) office. That notice directs the government to pay the financing partner instead of the contractor when the invoice comes due. A specialized GovCon funder handles this paperwork for you.
Because it's a federally established, routine process, financing your federal receivables through assignment of claims is compliant and standard — not a workaround.
Frequently asked questions
What is the Assignment of Claims Act?
A federal law (31 U.S.C. 3727, 41 U.S.C. 6305, FAR Subpart 32.8) that lets contractors assign their right to payment under a contract to a financing institution — the legal basis for government factoring.
Do I have to notify the contracting officer?
Yes. The assignment is perfected by filing a Notice of Assignment with the contracting officer and disbursing office. A specialized funding partner handles this for you.
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