[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR49]

[Page 914]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 49_TERMINATION OF CONTRACTS--Table of Contents
 
                     Subpart 49.1_General Principles
 
Sec.  49.108-8  Assignment of rights under subcontracts.

    (a) The termination for convenience clauses in 52.249, except the 
short-form clauses, obligate the prime contractor to assign to the 
Government, as directed by the TCO, all rights, titles, and interest 
under any subcontract terminated because of termination of the prime 
contract. The TCO shall not require the assignment unless it is in the 
Government's interest.
    (b) The termination for convenience clauses (except the short-form 
clauses) also provide the Government the right, in its discretion, to 
settle and pay any settlement proposal arising out of the termination of 
subcontracts. This right does not obligate the Government to settle and 
pay settlement proposals of subcontractors. As a general rule, the prime 
contractor is obligated to settle and pay these proposals. However, when 
the TCO determines that it is in the Government's interest, the TCO 
shall, after notifying the contractor, settle the subcontractor's 
proposal using the procedures for settlement of prime contracts. An 
example in which the Government's interest would be served is when a 
subcontractor is a sole source and it appears that a delay by the prime 
contractor in settlement or payment of the subcontractor's proposal will 
jeopardize the financial position of the subcontractor. Direct 
settlements with subcontractors are not encouraged.

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