[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 937]

 

            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

 

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. 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.