[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 934-935]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 49_TERMINATION OF CONTRACTS--Table of Contents

 

                     Subpart 49.1_General Principles

 

49.115  Settlement of terminated incentive contracts.



    (a) Fixed-price incentive contracts. The TCO shall settle terminated 

fixed-price incentive (FPI) contracts under the provisions of paragraph 

(j) of the clause at 52.216-16, Incentive Price Revision--Firm Target, 

and 52.249-2, Termination for Convenience of the Government (Fixed-

Price).

    (1) Partial termination. Under a partially terminated contract, the 

TCO shall negotiate a settlement as provided in the termination clause 

of the contract, and paragraph (j) of the clause at 52.216-16, Incentive 

Price Revision--Firm Target, or paragraph (1) of the clause at 52.216-

17, Incentive Price Revision--Successive Targets. The contracting 

officer shall apply the incentive price revision provisions to completed 

items accepted by the Government, including any for which the contractor 

may request reimbursement in the settlement proposal. The TCO shall 

reimburse the contractor at target price for completed articles included 

in the settlement proposal for which a final price has not been 

established. The TCO shall incorporate in the settlement agreement an 

appropriate reservation as to final price for these completed articles.

    (2) Complete termination. If any items were delivered and accepted 

by the Government, the contracting officer shall establish prices under 

the incentive provisions of the contract. On the terminated portion of 

the contract, the provisions of the termination clause (see 52.249-2, 

Termination for Convenience of the Government (Fixed-Price)) shall 

govern and the provisions of the incentive clause shall not apply. The 

TCO responsible for the termination settlement will ensure, on the basis 

of evidence considered proper (including coordination with the 

contracting officer), that no portion of the costs considered in the 

negotiations under the incentive provisions are included in the 

termination settlement.

    (b) Cost-plus-incentive-fee contracts. The TCO shall settle 

terminated cost-plus-incentive-fee contracts under the clause at 52.249-

6, Termination (Cost-Reimbursement).

    (1) Partial termination. Under a partial termination, the TCO shall 

limit the



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settlement to an adjustment of target fee as provided in paragraph (e) 

of the clause at 52.216-10, Incentive Fee. The settlement agreement 

shall include a reservation regarding any adjustment of target cost 

resulting from the partial termination. The contracting officer shall 

adjust the target cost, if required.

    (2) Complete termination. The parties shall negotiate the settlement 

under the provisions of subpart 49.3 and the clause at 52.249-6, 

Termination (Cost-Reimbursement). The fee shall be adjusted on the basis 

of the target fee, and the incentive provisions shall not be applied or 

considered.