Contract Termination Forms

Document Sample
Contract Termination Forms Powered By Docstoc
					                                 Federal Acquisition Regulation                                                                          49.601–2

                                        Subpart 49.6—Contract                                                  Contracting Officer
                                    Termination Forms and Formats                               [48 FR 42447, Sept. 19, 1983, as amended at 65
                                                                                                FR 36031, June 6, 2000]
                                 49.601 Notice of termination for con-
                                     venience.                                                  49.601–2 Letter notice.
                                   (See 49.402–3(g) for notice of termi-                          The following letter notice of termi-
                                 nation for default.)                                           nation is suggested for use if a contract
                                                                                                for supplies is being terminated for
                                 49.601–1       Telegraphic notice.                             convenience. With appropriate modi-
                                   (a) Complete termination. The fol-                           fications, it may be used in termi-
                                 lowing telegraphic notice is suggested                         nating contracts for other than sup-
                                 for use if a supply contract is being                          plies and in terminating subcontracts.
                                 completely terminated for conven-                              This notice shall be sent by certified
                                 ience. If appropriately modified, the                          mail, return receipt requested. If no
                                 notice may be used for other than sup-                         prior telegraphic notice was issued, use
                                 ply contracts.                                                 the alternate notice that follows this
                                 XYZ Corporation                                                    NOTICE OF TERMINATION TO PRIME
                                 New York, NY 12345                                                          CONTRACTORS
                                    Contract No. ............... is completely ter-                [At the top of the notice, set out all special de-
                                 minated under clause ..........., effective                    tails relating to the particular termination; e.g.,
                                 ..........     [insert     ‘‘immediately’’   or  ‘‘on          name and address of company, contract number
                                 ..............., 20..’’, or ‘‘as soon as you have de-          of terminated contract, items, etc.]
                                 livered, including prior deliveries, the fol-                     (a) Effective date of termination. This con-
                                 lowing items:’’ (list)]. Immediately stop all                  firms the Government’s telegram to you
                                 work, terminate subcontracts, and place no                     dated .........., 20...., terminating ..............
                                 further orders except to the extent [insert if                 [insert ‘‘completely’’ or ‘‘in part’’] Contract
                                 applicable ‘‘necessary to complete items not                   No. ...... (referred to as ‘‘the contract’’) for
                                 terminated or’’] that you or a subcontractor                   the Government’s convenience under the
                                 wish to retain and continue for your own ac-                   clause entitled ......... [insert title of appro-
                                 count any work-in-process or other mate-                       priate termination clause]. The termination is
                                 rials. Telegraph similar instructions to all                   effective on the date and in the manner stat-
                                 subcontractors and suppliers. Detailed in-                     ed in the telegram.
                                 structions follow.                                                (b) Cessation of work and notification to im-
                                 llllllllllllllllllllllll                                       mediate subcontractors. You shall take the fol-
                                                                                                lowing steps:
                                                  Contracting Officer                              (1) Stop all work, make no further ship-
                                                                                                ments, and place no further orders relating
                                   (b) Partial termination. The following                       to the contract, except for—
                                 telegraphic notice is suggested for use                           (i) The continued portion of the contract,
                                                                                                if any;
                                 if a supply contract is being partially
                                                                                                   (ii) Work-in-process or other materials
                                 terminated for convenience. If appro-                          that you may wish to retain for your own ac-
                                 priately modified, the notice may be                           count; or
                                 used for other than supply contracts.                             (iii) Work-in-process that the Contracting
                                                                                                Officer authorizes you to continue (A) for
                                 DATEllllllllll                                                 safety precautions, (B) to clear or avoid dam-
                                 XYZ Corporation                                                age to equipment, (C) to avoid immediate
                                 New York, NY 12345                                             complete spoilage of work-in-process having
                                   Contract No. ..... is partially terminated                   a definite commercial value, or (D) to pre-
                                 under clause ...................., effective ..............    vent any other undue loss to the Govern-
                                 [insert ‘‘immediately’’ or ‘‘on ...............,               ment. (If you believe this authorization is
                                 20..’’]. Reduce items to be delivered as fol-                  necessary or advisable, immediately notify
                                 lows: [insert instructions]. Immediately stop                  the Contracting Officer by telephone or per-
                                 all work, terminate subcontracts, and place                    sonal conference and obtain instructions.)
                                 no further orders except as necessary to per-                     (2) Keep adequate records of your compli-
                                 form the portion not terminated or that you                    ance with subparagraph (1) above showing
                                 or a subcontractor wish to retain and con-                     the—
                                 tinue for your account any work-in-process                        (i) Date you received the Notice of Termi-
                                 or other materials. Telegraph similar in-                      nation;
                                 structions to all subcontractors and sup-                         (ii) Effective date of the termination; and
                                 pliers. Detailed instructions follow.                             (iii) Extent of completion of performance
                                 llllllllllllllllllllllll                                       on the effective date.


VerDate jul<14>2003   04:16 Oct 23, 2003   Jkt 200196   PO 00000    Frm 00935    Fmt 8010      Sfmt 8010   Y:\SGML\200196T.XXX   200196T
                                 49.601–2                                                               48 CFR Ch. 1 (10–1–03 Edition)
                                   (3) Furnish notice of termination to each                   (2) Instruments of license or assignment on
                                 immediate subcontractor and supplier that                  all inventions, discoveries, and patent appli-
                                 will be affected by this termination. In the               cations made in the performance of the con-
                                 notice—                                                    tract.
                                   (i) Specify your Government contract num-                   (g) Employees affected. (1) If this termi-
                                 ber;                                                       nation, together with other outstanding ter-
                                   (ii) State whether the contract has been                 minations, will necessitate a significant re-
                                 terminated completely or partially;                        duction in your work force, you are urged
                                   (iii) Provide instructions to stop all work,             to—
                                 make no further shipments, place no further                   (i) Promptly inform the local State Em-
                                 orders, and terminate all subcontracts under               ployment Service of your reduction-in-force
                                 the contract, subject to the exceptions in                 schedule in numbers and occupations, so
                                 subparagraph (1) above;                                    that the Service can take timely action in
                                   (iv) Provide instructions to submit any                  assisting displaced workers;
                                 settlement proposal promptly; and                             (ii) Give affected employees maximum
                                   (v) Request that similar notices and in-                 practical advance notice of the employment
                                 structions be given to its immediate sub-                  reduction and inform them of the facilities
                                 contractors.                                               and services available to them through the
                                   (4) Notify the Contracting Officer of all                local State Employment Service offices;
                                 pending legal proceedings that are based on                   (iii) Advise affected employees to file ap-
                                 subcontracts or purchase orders under the                  plications with the State Employment Serv-
                                 contract, or in which a lien has been or may               ice to qualify for unemployment insurance,
                                 be placed against termination inventory to                 if necessary;
                                 be reported to the Government. Also,                          (iv) Inform officials of local unions having
                                 promptly notify the Contracting Officer of                 agreements with you of the impending reduc-
                                 any such proceedings that are filed after re-              tion-in-force; and
                                 ceipt of this Notice.                                         (v) Inform the local Chamber of Commerce
                                   (5) Take any other action required by the                and other appropriate organizations which
                                 Contracting Officer or under the Termi-                    are prepared to offer practical assistance in
                                 nation clause in the contract.                             finding employment for displaced workers of
                                   (c) Termination inventory. (1) As instructed             the impending reduction-in-force.
                                 by the Contracting Officer, transfer title and
                                                                                               (2) If practicable, urge subcontractors to
                                 deliver to the Government all termination
                                                                                            take similar actions to those described in
                                 inventory of the following types or classes,
                                                                                            subparagraph (1) above.
                                 including subcontractor termination inven-
                                 tory that you have the right to take:                         (h) Administrative. The contract adminis-
                                 [Contracting Officer insert proper identification          tration office named in the contract will
                                 or ‘‘None’’].                                              identify the Contracting Officer who will be
                                                                                            in charge of the settlement of this termi-
                                   (2) To settle your proposal, it will be nec-
                                                                                            nation and who will, upon request, provide
                                 essary to establish that all prime and sub-
                                                                                            the necessary settlement forms. Matters not
                                 contractor termination inventory has been
                                                                                            covered by this notice should be brought to
                                 properly accounted for. For detailed infor-
                                                                                            the attention of the undersigned.
                                 mation, see part 45.
                                   (d) Settlements with subcontractors. You re-                (i) Please acknowledge receipt of this no-
                                 main liable to your subcontractors and sup-                tice as provided below.
                                 pliers for proposals arising because of the                llllllllllllllllllllllll
                                 termination of their subcontracts or orders.
                                 You are requested to settle these settlement                              (Contracting Officer)
                                 proposals as promptly as possible. For pur-
                                 poses of reimbursement by the Government,                  llllllllllllllllllllllll
                                 settlements will be governed by the provi-                 llllllllllllllllllllllll
                                 sions of part 49.
                                   (e) Completed end items. (1) Notify the Con-                              (Name of Office)
                                 tracting Officer of the number of items com-
                                 pleted under the contract and still on hand
                                 and arrange for their delivery or other dis-               llllllllllllllllllllllll
                                 posal (see 49.205).
                                   (2) Invoice acceptable completed end items
                                 under the contract in the usual way and do
                                 not include them in the settlement proposal.                            Acknowledgment of Notice
                                   (f) Patents. If required by the contract,
                                 promptly forward the following to the Con-                   The undersigned acknowledges receipt of a
                                 tracting Officer:                                          signed copy of this notice on ............, 20.......
                                   (1) Disclosure of all inventions, discoveries,           Two signed copies of this notice are re-
                                 and patent applications made in the per-                   turned.
                                 formance of the contract.                                  llllllllllllllllllllllll


VerDate jul<14>2003   04:16 Oct 23, 2003   Jkt 200196   PO 00000   Frm 00936   Fmt 8010    Sfmt 8010   Y:\SGML\200196T.XXX   200196T
                                 Federal Acquisition Regulation                                                                     49.602–4
                                                (Name of Contractor)                         tlement proposals resulting from the
                                                                                             termination of cost-reimbursement
                                 By llllllllllllllllllllll                                   contracts (see 49.302).
                                                                                               (d) Standard Form 1438, Settlement
                                                                                             Proposal (Short Form), shall be used to
                                                                                             submit settlement proposals resulting
                                                                                             from the termination of fixed-price
                                                          (Title)                            contracts if the total proposal is less
                                                                                             than $10,000 (see 49.206–1(d)).
                                                   (End of notice)                           49.602–2      Inventory schedule forms.
                                   Alternate notice. If no prior tele-                         The following forms shall be used to
                                 graphic notice was issued, substitute                       support settlement proposals sub-
                                 the following paragraph (a) for para-                       mitted on the forms specified in 49.602–
                                 graph (a) of the notice above:                              1(a), (b), and (c) (see 45.606):
                                    (a) Effective date of termination. You are no-             (a) Standard Form 1426, Inventory
                                 tified that Contract No. ...... (referred to as             Schedule A (Metals in Mill Product
                                 ‘‘the contract’’) is terminated ..............              Form), and Standard Form 1427, Inven-
                                 [insert ‘‘completely’’ or ‘‘in part’’] for the              tory Schedule A—Continuation Sheet
                                 Government’s convenience under the clause                   (Metals in Mill Product Form).
                                 entitled .............. [insert title of appropriate
                                 termination clause]. The termination is effec-                (b) Standard Form 1428, Inventory
                                 tive .............. [insert either ‘‘immediately            Schedule B, and Standard Form 1429,
                                 upon receipt of this Notice’’ or ‘‘on ...........,          Inventory Schedule B—Continuation
                                 20...,’’ or ‘‘as soon as you have delivered, in-            Sheet (used for reporting raw mate-
                                 cluding prior deliveries, the following                     rials, purchased parts, finished compo-
                                 items:’’ (list)]. Reduce items to be delivered
                                                                                             nents, finished product, plant equip-
                                 as follows: [insert instructions].
                                                                                             ment, and miscellaneous inventory).
                                 [48 FR 42447, Sept. 19, 1983, as amended at 65                (c) Standard Form 1430, Inventory
                                 FR 36031, June 6, 2000]
                                                                                             Schedule C—(Work-in-Process), and
                                 49.602 Forms for settlement of termi-                       Standard Form 1431, Inventory Sched-
                                     nated contracts.                                        ule C—Continuation Sheet (Work-in-
                                   The standard forms listed below shall                     Process).
                                 be used for settling terminated prime                         (d) Standard Form 1432, Inventory
                                 contracts. The forms at 49.602–1 and                        Schedule D (Special Tooling and Spe-
                                 49.602–2 may also be used for settling                      cial Test Equipment), and Standard
                                 terminated     subcontracts.   Standard                     Form 1433, Inventory Schedule D—Con-
                                 forms are illustrated in subpart 53.3.                      tinuation Sheet (Special Tooling and
                                                                                             Special Test Equipment).
                                 49.602–1 Termination settlement pro-                          (e) Standard Form 1434, Termination
                                     posal forms.
                                                                                             Inventory Schedule E (Short Form for
                                   (a) Standard Form 1435, Settlement                        use with SF 1438 Only).
                                 Proposal (Inventory Basis), shall be
                                 used to submit settlement proposals re-                     49.602–3 Schedule of accounting infor-
                                 sulting from the termination of fixed-                          mation.
                                 price contracts if the proposals are                          Standard Form 1439, Schedule of Ac-
                                 computed on an inventory basis (see                         counting Information, shall be filed in
                                                                                             support of a settlement proposal unless
                                   (b) Standard Form 1436, Settlement
                                                                                             the proposal is filed on Standard Form
                                 Proposal (Total Cost Basis), shall be
                                 used to submit settlement proposals re-                     1438, Settlement Proposal (Short Form)
                                 sulting from the termination of fixed-                      (see 49.206–1(e)).
                                 price contracts if the proposals are
                                                                                             49.602–4      Partial payments.
                                 computed on a total cost basis (see
                                 49.206–2(b)).                                                 Standard Form 1440, Application for
                                   (c) Standard Form 1437, Settlement                        Partial Payment, shall be used to
                                 Proposal for Cost-Reimbursement Type                        apply for partial payments (see 49.112–
                                 Contracts, shall be used to submit set-                     1).


VerDate jul<14>2003   04:16 Oct 23, 2003   Jkt 200196   PO 00000    Frm 00937   Fmt 8010    Sfmt 8010   Y:\SGML\200196T.XXX   200196T

Shared By:
Description: Contract Termination Forms document sample