1849.101 Authorities and responsibilities.
1849.101-70 Appointment/delegation.
(a) Heads of installations shall appoint a termination contracting officer (TCO) (see FAR 2.101) to perform specific duties relating to contract termination as one of that individual's primary functions. Such duties should include--
(1) Receiving and reviewing NASA Forms 1412, Termination Authority;
(2) Reviewing the contract and related documents before issuing the notice of termination, to ensure protection of the Government's rights under the contract;
(3) Issuing notices of termination, reinstatement, and recision to contractors;
(4) Assigning termination docket control numbers;
(5) Developing, maintaining, and managing basic controls relating to contract termination and settlement actions; and
(6) Carrying out the duties, functions, and responsibilities described in FAR Part 49 and this Part 1849.
(b) Contracting offices shall utilize the services of the Department of Defense and other Government agencies whenever possible to administer and negotiate settlement of terminated contracts. Delegation of the termination function shall be made in accordance with FAR Subpart 42.2 and Subpart 1842.2 of this Regulation.
1849.101-71 Termination authority.
NASA Form 1412, Termination Authority, is prescribed for use by NASA installations when initiating action to terminate a contract for convenience or default. The project manager or the activity initiating the procurement request should initiate the action by completing NASA Form 1412 and submitting it to the contracting officer.
1849.102 Notice of termination.
1849.102-70 Prior clearance of significant contract terminations.
(a) Any information on contract termination involving a reduction in employment of 100 or more contractor employees must have prior NASA Headquarters clearance before it is released. Release of information to Congress or the public is the responsibility of the NASA Headquarters Office of Legislative Affairs (Code LB). A reduction of fewer than 100 may be significant and, if so, should be similarly cleared.
(b) The contracting officer shall submit the following information to Code LB:
(1) Contract number.
(2) Date of award.
(3) Type of contract.
(4) Name of company.
(5) Nature of contract or end item.
(6) Reasons for the termination.
(7) Contract price of items terminated.
(8) Total number of contractor employees involved, including the Government's estimate of the number that may be discharged.
(9) Anticipated impact on the company and the community.
(10) Name of the community affected.
(11) Area labor category.
(12) Whether contractor is large or small business.
(13) Any known impact on disadvantaged employment programs.
(14) Total number of subcontractors involved and the impact in this area, if known.
(15) Unclassified draft of suggested press release.
(c) After the decision has been made to terminate a contract, the contracting officer shall immediately request clearance to release the information. Pending receipt of the clearance, "For Official Use Only" handling shall be used unless classified information is involved. The contracting officer shall furnish copies of the request to Code LB and the cognizant program office.
(d) Code LB shall act promptly on the request (not days after receipt) to avoid the accrual of termination costs.
1849.105 Duties of termination contracting officer after issuance of notice of termination.
1849.105-70 Termination docket checklist.
The termination contracting officer shall complete NASA Form 1413, Termination Docket Checklist, to ensure adequacy of records under FAR 49.105.
1849.110 Settlement negotiation memorandum.
Formats for negotiation memoranda for settlements requiring Settlement Review Board action appear in 1849.603-70.
1849.111 Review of proposed settlements.
1849.111-70 Settlement Review Boards.
Procurement officers at each NASA installation shall establish a Settlement Review Board (the Board) to review pro posed settlements or determinations as required by 1849.111-71(a). Each Board should be composed of at least three qualified employees of the installation with broad business and contracting experience. Each Board should include a lawyer, an engineer or industrial specialist, and, in appropriate cases, an accountant. Three members of the Board shall constitute a quorum; the Board may act by a majority of the members present. No person may serve as a member of a Board in reviewing a settlement in which that member has participated.
1849.111-71 Required review and approval.
(a) When required. Before executing a settlement agreement, issuing a determination of the amount due under the termination clause of a contract, or approving or ratifying a subcontract settlement, the TCO shall submit it for review and approval by the Board if--
(1) It involves $1,000,000 or more (see FAR 49.002(d));
(2) It is limited to adjustment of the fee of a cost-reimbursement contract or subcontract and (i) in the case of a complete termination, the fee, as adjusted, is $100,000 or more, or (ii) in the case of a partial termination, the fee, as adjusted, with respect to the terminated portion of the contract or subcontract is $50,000 or more;
(3) The procurement officer concerned determines that a review is desirable; or
(4) The TCO desires review by the Board.
(b) Submission of information. The TCO shall submit to the Board the Termination Settlement Supplemental Agreement and supporting documentation. The documentation should include copies of (1) the contractor's or subcontractor's settlement proposal, (2) the audit report, (3) termination inventory schedules, (4) consolidated SF 1424, Inventory Disposal Report, (5) the TCO's negotiation memorandum explaining the settlement (see FAR 49.110), and (6) the opinion of any other Board that previously reviewed the settlement. The Board will prescribe the number of copies and may require the submission of additional information.
1849.111-72 Scope of review.
The function of the Board is to review the reasonableness of the proposed settlement agreement or determination. The Board may vary the scope and intensity of its review as circumstances warrant. While it is not intended that the Board examine in detail every element of the proposed settlement agreement or determination, the Board may review some elements to assure its overall reasonableness.
1849.111-73 Action by the Board.
The Board shall submit to the TCO a written opinion approving or disapproving the proposed settlement agreement or determination. Failure of the Board to submit a written opinion within 30 days after submission to the Board of all the information required under 1849.111-71(b) shall operate as an approval.
1849.111-74 Subcontracts.
A TCO may authorize the contract administration office cognizant of a lower-tier subcontractor to grant approval or ratification, including necessary Board approvals, of proposed subcontractor settlements described in FAR 49.108-3(c), that are first reviewed and referred by the prime contractor to the TCO. This procedure is not applicable to settlements between the contractor and its first tier subcontractors.
1849.505 Other termination clauses.
1849.505-70 NASA contract clause.
The contracting officer shall insert the clause at 1852.249-72, Termination (Utilities), in all solicitations and contracts for utilities services.
1849.603 Formats for termination for convenience settlement agreements.
Termination contracting officers (TCOs) must use the format shown in 1849.603-70 for the settlement memorandum (see FAR 49.110). Contractors and subcontractors are encouraged to use this format appropriately modified to cover subcontract settlements submitted for review and approval.
1849.603-70 Termination Contracting Officer's Settlement Memorandum.
(a) General information. The TCO shall include the following information regarding the contractor, contract, and termination notice:
(1) Identification. TCOs shall identify the purpose and content of the memorandum.
(i) The TCO shall give the name and address of the contractor and discuss any pertinent affiliation between prime contractors and subcontractors relative to the overall settlement.
(ii) The TCO shall list the names and titles of contractor and Government personnel who participated in the negotiation.
(2) Description of terminated contract. The TCO shall state the--
(i) Date of contract;
(ii) Contract number;
(iii) Type of contract;
(iv) General description of contract items;
(v) Total contract price; and
(vi) Applicable contract termination provisions and clause.
(3) Termination notice. The TCO shall reference the termination notice and state--
(i) The effective date of termination;
(ii) The scope and nature of termination (complete or partial);
(iii) The items terminated;
(iv) The unit prices;
(v) The total price of items terminated for fixed-price contracts or the estimated cost and fee applicable to items terminated for cost-reimbursement type contracts;
(vi) Whether the termination notice was amended and, if so, why;
(vii) Whether the contractor stopped work on the termination effective date (if it did not, furnish details) and whether subcontracts were terminated promptly;
(viii) Any redirection of common items and return of goods to the contractor's suppliers; and
(ix) The extent of contract performance and timely deliveries by the contractor.
(b) Contractor's settlement proposal. The TCO shall summarize the contractor's settlement proposal. The summary shall include the following:
(1) Date and amount. The TCO shall identify the date and location where the claim was filed and its gross amount (if interim settlement proposals were filed, information shall be furnished for each claim).
(2) Basis of claim. The TCO shall identify the basis of the claim, e.g., inventory, total cost, or other basis. The TCO shall explain any approvals granted in connection with submission on other than an inventory basis.
(3) Examination of proposal. The TCO shall identify the types of reviews made and by whom (audit, engineering, legal, or other).
(c) Tabular summary of contractor's claim. The TCO shall summarize the proposed settlement in tabular form. The summary shall include the cost elements/items, the amounts claimed, the Government recommended position (including auditor and technical personnel recommendations), and the negotiated settlement amounts. This summary shall include, if appropriate, the previous reimbursed and unreimbursed costs applicable to the prime contractor and subcontractor, previous profit/fees paid and unpaid; settlement cost less disposal credit or other credits, and a recapitulation of previous settlements. The TCO shall expand the format to include field recommendations that will be considered.
(d) Settlement summary. The TCO shall address the settlements reached on the following items:
(1) Contractor's cost. See FAR 15.808(a) for format.
(2) Profit/Fee. See FAR 15.808(a)(10).
(3) Settlement expenses. The TCO shall discuss and summarize those expenses not included in the audit.
(4) Subcontractor settlements. The TCO shall identify the number and dollar amount of any settlements approved by the TCO and concluded by the contractor under delegation of authority.
(5) Partial payments. The TCO shall furnish the total amount of any partial payments.
(6) Progress or advance payments. The TCO shall furnish the total of unliquidated progress or advance payments.
(7) Claims of the Government against the contractor included in settlement agreement reservations. The TCO shall list any outstanding claims the Government has against the contractor regarding the terminated contract.
(8) Assignments. The TCO shall list any assignments, identifying the name and address of each assignee.
(9) Disposal credits. The TCO shall furnish information as to any applicable disposal credits and quantify them.
(10) Plant clearance. The TCO shall state whether all plant clearance actions have been completed and all inventory sold, retained, or otherwise properly disposed of in accordance with applicable plant clearance regulations. The TCO shall discuss any unusual matters pertaining to plant clearance. The TCO shall attach a consolidated closing plant clearance report, if applicable.
(11) Government property. The TCO shall state whether all Government property has been accounted for.
(12) Special tooling. The TCO shall discuss the disposition of any special tooling, if applicable.
(13) Summary of settlement. The TCO shall summarize the complete or partial settlement in tabular form. The summary shall include, at a minimum, the amount claimed and allowed for contractor and/or subcontractor changes, disposal, prior payment credits, and contract price.
(14) Exclusions. The TCO shall describe any proposed reservation of rights to the Government or to the contractor.
(e) Recommendation. The TCO shall state (1) the amount of the gross settlement recommended and (2) that it is fair and reasonable to the Government and the contractor.
(f) Signature. The TCO shall sign and date the memorandum.