[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR49]



[Page 929-930]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 49_TERMINATION OF CONTRACTS--Table of Contents

 

                     Subpart 49.1_General Principles

 

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)



[[Page 930]]



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.