1-8.804 Formats of miscellaneous forms. 1-8.804-1 Format 804-1, Schedule of Accounting Information.

1-8.804-2 Format 804-2, Application for Partial Payment. Scrap warranty.

1-8.805 1-8.806 1-8.806-1

1-8.806-2

1-8.806-3

Formats of settlement agreement. Settlement agreement for use in settling fixed-price prime contracts after complete termi

nation. Settlement agreement for use in

settling fixed-price prime contracts after partial termination. Partial settlement agreement, for use in settling fixed-price prime contracts after complete or partial termination where settlement pertains only to settlements with subcontractors. 1-8.806-4 Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement includes costs. Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement is limited to fee.

1-8.806-5

1-8.806-6

No-cost settlement agreementpartial termination.

1-8.806-7 No-cost settlement agreementcomplete termination.

AUTHORITY: The provisions of this Part 1-8 issued under sec. 205 (c), 63 Stat. 390; 40 U.S.C. 486 (c).

SOURCE: The provisions of this Part 1-8 appear at 29 F.R. 10196, July 24, 1964, unless otherwise noted.

§ 1-8.000 Scope and applicability of part.

(a) This part sets forth policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default, and sets forth policies and procedures relating to the settlement of claims arising therefrom. It includes contract clauses, with respect to termination and excusable delay, and suggested formats of notices, forms, warranties, and agreements related to the termination and settlement of contracts.

(b) This part applies to contracts which initially or by amendment provide for termination for the convenience of the Government or for the default of the contractor, whether or not the clauses in the contract with respect to termination are those set forth in Subpart 1-8.7. However, to the extent that clauses actually used in contracts are inconsistent with the provisions of this part, the provisions of the clauses actually used shall control. Where a termination for convenience clause has not been included in a contract, this part may also be used for guidance in negotiating a settlement agreement, or in making an (see equitable adjustment § 1-8.601

(c)).

(c) This part also applies to the disposal of contractor inventory arising out of any modification of a cost-reimbursement type contract pursuant to the Changes clause.

(d) When the head of a procuring activity so authorizes, the provisions of this part may be utilized:

(1) In determining any equitable adjustment as a result of modification of any contract, other than a cost-reimbursement type contract, pursuant to the Changes clause;

(2) In the disposal of any property which has become obsolete or excess for any reason under a contract whenever the cost of such property is made the basis of a claim by the contractor against the Government; or

(3) In the disposal of contractor inventory generally.

1-8.805 1-8.806 1-8.806-1

1-8.806-2

1-8.806-3

1-8.806-4

1-8.806-5

1-8.806-6

Formats of settlement agreement. Settlement agreement for use in settling fixed-price prime contracts after complete termination.

Settlement agreement for use in

settling fixed-price prime contracts after partial termination. Partial settlement agreement, for use in settling fixed-price prime contracts after complete or partial termination where settlement pertains only to settlements with subcontractors. Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement includes costs. Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement is limited to fee.

No-cost settlement agreementpartial termination.

1-8.806-7 No-cost settlement agreementcomplete termination.

AUTHORITY: The provisions of this Part 1-8 issued under sec. 205 (c), 63 Stat. 390; 40 U.S.C. 486 (c).

SOURCE: The provisions of this Part 1-8 appear at 29 F.R. 10196, July 24, 1964, unless otherwise noted.

§ 1-8.000 Scope and applicability of part.

(a) This part sets forth policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default, and sets forth policies and procedures relating to the settlement of claims arising therefrom. It includes contract clauses, with respect to termination and excusable delay, and suggested formats of notices, forms, warranties, and agreements related to the termination and settlement of contracts.

(b) This part applies to contracts which initially or by amendment provide for termination for the convenience of the Government or for the default of the contractor, whether or not the clauses in the contract with respect to termination are those set forth in Subpart 1-8.7. However, to the extent that clauses actually used in contracts are inconsistent with the provisions of this part, the provisions of the clauses actually used shall control. Where a termination for convenience clause has not been included in a contract, this part may also be used for guidance in negotiating a settlement agreement, or in making an equitable adjustment (see § 1-8.601 (c)).

(c) This part also applies to the disposal of contractor inventory arising out of any modification of a cost-reimbursement type contract pursuant to the Changes clause.

(d) When the head of a procuring activity so authorizes, the provisions of this part may be utilized:

(1) In determining any equitable adjustment as a result of modification of any contract, other than a cost-reimbursement type contract, pursuant to the Changes clause;

(2) In the disposal of any property which has become obsolete or excess for any reason under a contract whenever the cost of such property is made the basis of a claim by the contractor against the Government; or

(3) In the disposal of contractor inventory generally.

As used in this part, the following terms have the meanings stated:

(a) “Amount of claim" or "amount of settlement" means that amount which (1) does not have deducted from the gross claim or settlement (i) credits for retention or other disposal of termination inventory allocated to the claim, (ii) credits for advance payments, and (iii) credits for partial payments (see § 18.212-1); but (2) does have deducted from the gross claim or settlement (i) -the amount payable for completed articles or work at the contract price, and (ii) amounts payable for the settlement or discharge of termination claims of subcontractors. (This definition applies only when the taking of an action depends upon the amount of a termination claim or settlement; e.g., the amount which determines whether audit of a prime contract claim is required, or the amount which determines whether a settlement must be reviewed by a settleIment review board.)

(b) "Common items" means materials which are common in nature to both the terminated contract and the contractor's other work.

(c) "Continued portion of the contract" means that portion of a partially terminated contract which relates to work or end items not already completed and accepted prior to the effective date of termination and which the contractor must continue to perform.

(d) "Contractor-acquired property" means property procured or otherwise provided by the contractor for the performance of a contract, whether or not the Government has title by the terms of the contract or exercises its contractual right to take title.

(e) "Contractor inventory" means (1) any property acquired by and in the possession of a contractor or subcontractor (including Government-furnished property) under a contract pursuant to the terms of which title is vested in the Government, and in excess of the amounts needed to complete full performance under the entire contract; and (2) any property which the Government is obligated to or has an option to take over under any type of contract as a result either of any changes in the specifications or plans thereunder or of the ter

mination of such contract (or subcontract thereunder), prior to completion of the work, for the convenience or at the option of the Government.

(f) "Effective date of termination" means the date upon which the notice of termination first requires the contractor to stop performance, in whole or in part, under the contract. If, however, the termination notice is received subsequent to the date fixed for termination, then the effective date of termination means the date on which the notice is received.

(g) "Government-furnished property" means property in the possession of or acquired directly by the Government, and subsequently delivered or otherwise made available to the contractor.

(h) "Government property" means all property owned by or leased to the Government or acquired by the Government under the terms of a contract; except that property to which the Government has acquired a lien or title solely as a result of partial, advance, or progress payments shall not be classified as Government property. With this exception, Government property includes (1) Government-furnished property, and (2) that part of contractor-acquired property title to which is vested in the Government.

(i) "Material" means property which may be incorporated into or attached to an end item to be delivered under a contract or which may be consumed or expended in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies which may be consumed in normal use in the performance of the contract.

(j) "Other work" means any current or scheduled work of the contractor, whether Government or commercial, other than work related to the terminated contract.

(k) "Plant clearance period" means, for each particular property classification (such as raw materials, purchased parts, and work in process) at any one plant or location, a period beginning with the effective date of the termination for convenience and ending 90 days after receipt by the contracting officer of acceptable inventory schedules covering all items of that particular property classification in the termination inventory at that plant or location, or ending