[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 921-922]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 49_TERMINATION OF CONTRACTS--Table of Contents
 
Subpart 49.2_Additional Principles for Fixed-Price Contracts Terminated 
                             for Convenience
 
Sec.  49.206-1  Submission of settlement proposals.

    (a) Subject to the provisions of the termination clause, the 
contractor should promptly submit to the TCO a settlement proposal for 
the amount claimed because of the termination.

[[Page 922]]

The final settlement proposal must be submitted within one year from the 
effective date of the termination, unless the period is extended by the 
TCO. Termination charges under a single prime contract involving two or 
more divisions or units of the prime contractor may be consolidated and 
included in a single settlement proposal.
    (b) The settlement proposal must cover all cost elements including 
settlements with subcontractors and any proposed profit. With the 
consent of the TCO, proposals may be filed in successive steps covering 
separate portions of the contractor's costs. Such interim proposals 
shall include all costs of a particular type, except as the TCO may 
authorize otherwise.
    (c) Settlement proposals must be on the forms prescribed in 49.602 
unless the forms are inadequate for a particular contract. Settlement 
proposals must be in reasonable detail supported by adequate accounting 
data. Actual, standard (appropriately adjusted), or average costs may be 
used in preparing settlement proposals if they are determined under 
generally recognized accounting principles consistently followed by the 
contractor. When actual, standard, or average costs are not reasonably 
available, estimated costs may be used if the method of arriving at the 
estimates is approved by the TCO. Contractors shall not be required to 
maintain unduly elaborate cost accounting systems merely because their 
contracts may subsequently be terminated.
    (d) The contractor may use the Settlement Proposal (Short Form), SF 
1438 (see 49.602-1(d) and 53.249), when the total proposal is less than 
$10,000, unless otherwise instructed by the TCO. Settlement proposals 
that would normally be included in a single settlement proposal; e.g., 
those based on a series of separate orders for the same item under one 
contract, should be consolidated whenever possible and not divided to 
bring them below $10,000.
    (e) The Schedule of Accounting Information, SF 1439, must be 
submitted for each termination under a contract for which a settlement 
proposal is submitted, except when the Standard Form 1438 is used. 
Although several interim proposals may be submitted, SF 1439 need be 
submitted only once unless, subsequent to filing the original form, 
major changes occur in the information submitted.