The formats to be used for termination agreements for convenience should be presented for the most part as set out in this section (see 49.109). However, Termination Agreement Delegates (TCO`s) may modify the content of these agreements in order to comply with special termination clauses prescribed or permitted by their agencies (e.g. B see 49.501 and 49.505 (c)). The easiest way for the government to cope with its burden is to obtain authorization from the contractor. The Defense Contract Audit Agency Contract Audit Manual advises DCAA auditors (who perform termination comparison audits for many agencies in addition to the Department of Defense) to invite the contractor to provide an estimate of the portion of the contract concluded. 70 However, as the manual acknowledges, `there is no contractual obligation on the part of the contractor to submit an estimate`. 71 However, many contractors, without knowing their rights or the consequences of their actions, voluntarily give an estimate. Instead, contractors should carefully consider whether it is advantageous for them to respond to a government request according to an estimate. These two briefing papers focus on the costs to be claimed. They are the accompanists of Briefing Papers No. 97-11, Preparing Termination for Convenience Settlement Proposals for Fixed-Priced Contracts, a previous paper by one of the authors that focused on how costs can be claimed by conforming to a proposal for effective termination for comfort.

4 A contractor whose fixed-price contract is terminated for the convenience of government is entitled to (a) reimbursable expenses incurred in performing the work, (b) reasonable profit for the work performed, (c) reasonable settlement costs, and (d) certain “continuing” costs (after termination). 13 A contractor is not entitled to recover the benefit of the transfer costs. 14 If you receive partial notice for convenience, be sure to make a request for an appropriate adjustment of the increased costs for performing the unfinished work. As explained below, the “termination for convenience” clause gives a contractor less time to make a request for a fair accommodation of unfinished work than to submit a proposal for a termination transaction. Nevertheless, the courts have granted contractors some flexibility in claiming costs, either as a request for equitable accommodation of unfinished work or as costs related to the terminated portion of the contract in their proposed termination transaction. 97 Once you have reached an agreement with your employer, they will normally write it down. 13. Note that the FAR suggests that a NA consider including in a settlement agreement a full termination clause that would require contractors to remedy defects, provide warranty work on delivered goods, and perform other completed work. You should not accept such a provision without adequate compensation. The government must process the request for partial payment “immediately”.

85 An immediate partial payment may allow the contractor to avoid being forced to accept an excessively weak public transaction offer because it needs immediate liquidity. You must therefore always file an SF 1440 “Partial Payment Request” with your cancellation transaction proposal. 86 The “Termination for Convenience” clause for commercial property contracts (paragraph l of CLAUSE FAR 52.212-4) does not set a time limit for the submission of a proposed termination transaction after termination for convenience. If a fixed-price contract has been performed at a loss, the contractor is not entitled to profits and the request for termination is subject to a loss adjustment. . . .

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