Clifford announced the moves following Wednesday's practice.
The 6-foot-5 Williams was playing for the Santa Cruz Warriors of the D-League and was averaging 20.1 points, 7.6 assists and 4.3 rebounds per game.
Clifford says the team was "playing with fire" not having a true healthy backup point guard on the roster. Pargo missed the last 19 games with back soreness.
Williams was the 22nd pick in the 2010 NBA draft by Portland. He signed two 10-day contracts with Utah earlier this season.