needed in a particular case. Where greater accuracy or completeness may be achieved by a reference to the number of the contract clause or provision covering the matter in question, this method of enumerating reserved rights and liabilities may be followed. Omit any of the following which are not applicable and add any additional exceptions or reservations required.]

(a) All rights and liabilities, if any, of the parties under the Renegotiation Act of 19— [insert reference to applicable Renegotiation Act].

(b) All rights and liabilities, if any, of the parties under those clauses inserted in the contract because of the requirements of statutes and Executive orders, including, without limitation, any applicable clauses relating to the following topics: labor law, contingent fees, domestic articles, employment of aliens, and "officials not to benefit." [If the contract contains clauses of this character inserted for reasons other than requirements of statutes or Executive orders, the suggested language should be appropriately modified.]

(c) All rights and liabilities of the parties arising under the contract articles, if any, or otherwise which relate to reproduction rights, patent infringements, inventions, and applications for patents, including rights to assignments, invention reports and licenses, covenants of indemnity against patent risks, and bonds for patent indemnity obligations, together with all rights and liabilities under any such bond.

(d) All rights and liabilities of the parties arising under the contract, or otherwise, concerning defects in, or guarantees or warranties relating to, any articles or component parts furnished to the Government by the Contractor pursuant to the contract or this agreement.

(e) All rights and liabilities of the parties with respect to any contract termination inventory stored for the Government pursuant to Article 2 hereof.

In Witness Whereof, etc.

(hereinafter called "the Contractor"). WITNESSETH THAT:

WHEREAS, the Contractor and the Government have entered into Contract No. under date of --, 19— which, together

with any and all amendments, changes, modifications, and supplements thereto, is hereinafter referred to as "the contract";

and

WHEREAS, the Termination for Convenience of the Government clause of the contract provides that the performance of work under the contract may at the convenience of the Government be terminated by the Government in whole, or from time to time in part, whenever the Contracting Officer shall determine that such termination is in the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount to be paid to the Contractor by reason of such termination; and

WHEREAS, by notice of termination dated the Government advised the Contractor of the [complete termination of the contract for the convenience of the Government;] 2 [partial termination of the contract for the convenience of the Government as of the date and to the extent provided in such notice, to which reference is hereby made as to the part terminated, and said part is hereinafter referred to as "the terminated portion of the contract";]2 and

WHEREAS, the Contractor, in connection with the performance of the contract, has entered into the following subcontracts [among others]: [Insert here a list of the terminated subcontracts included in this settlement], which subcontracts were terminated by the Contractor in accordance with the termination for convenience clause of the contract and in accordance with the Notice of Termination received by him from the Government; and

WHEREAS, the parties desire to settle that portion of the termination claim of the Contractor which is based upon the termination of the subcontracts listed herein; and

WHEREAS, as used herein, the following terms shall have the meanings hereinafter set forth:

(a) The term "termination inventory" means any items of physical property purchased, supplied manufactured, furnished, or otherwise acquired for performance of the contract and properly allocable to the terminated portion of the contract. The term does not include any facilities, material, production or other equipment, or special tooling, which are subject to a separate contract or a special contract provision governing the use or disposition thereof. Termination inventory may include contractor-ac

2Insert appropriate phrase. 3Insert where appropriate.

quired property and Government-furnished property as defined below.

(1) "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.

(2) "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.

(b) The term "subcontract" means any contracts, as defined in § 1-1.208 of the Federal Procurement Regulations (41 CFR 11.208), other than a prime contract, entered into by a prime contractor or a subcontractor, calling for supplies or services required for the performance of any one or more prime contracts.

(c) The term "scrap" means property which has no reasonable prospect of being sold except for the recovery value of its basic material content.

NOW, THEREFORE, the parties hereto do mutually agree as follows:

ARTICLE 1. (a) The contractor certifies that, prior to the execution of this agreement, each of the Contractor's immediate subcontractors whose claim is included in the claim settled by this agreement has furnished to the Contractor a certificate stating (1) that all his subcontract termination inventory (including scrap), has been retained or otherwise acquired by him, sold to third parties, returned to suppliers, stored, for the Government, delivered to the Government, or otherwise properly accounted for, and all proceeds or retention prices thereof, if any, were taken into account in arriving at the settlement of the subcontract or subcontracts, and (2) that the subcontractor has received from each of the immediate subcontractors whose claim was included in his claim a substantially similiar certificate.

(b) The Contractor hereby transfers and conveys to the Government all the right, title, and interest, if any, which the Contractor has received, or is entitled to receive, in and to such subcontract termination inventory, to the extent that it is not otherwise properly accounted for, and hereby assigns to the Government any and all of his rights relating thereto.

ARTICLE 2. In all cases where the Contractor has not previously made such payments, the Contractor shall, within ten (10) days after receipt of the payment provided for hereunder, pay to each of his immediate subcontractors (or to their respective assignees) the respective amounts to which they are entitled, after deducting, if the Contractor so elects, any amounts then due and payable to the Contractor by such subcontractors.

ARTICLE 3. The Contractor certifies that, with respect to all items of subcontract termination inventory the costs of which were taken into account in arriving at the amount of this settlement or in the settlement of any subcontract claim included in this settlement; (a) all such items are properly allocable to the terminated portion of the contract; (b) such items are not in excess of the reasonable quantitative requirements of the terminated portion of the contract; (c) such items do not include any items reasonably usable, without loss to the Contractor, on his other work; and (d) the Contractor has informed the Contracting officer of any substantial change in the status of such items between the dates of his termination inventory schedules and the date of this agreement.

ARTICLE 4. Upon execution of this agreement the Government agrees to pay to the Contractor or his assignee, upon presentation of proper invoices or vouchers, the sum of $--- which sum, [together with the amount of $- heretofore paid the Contractor as partial, progress, or advance payments], constitutes payment in full and complete settlement, except as hereinafter provided in Article 5, of the amount due the Contractor with respect to that portion of his termination claim which is based upon termination of the subcontracts listed hereinabove. [The first sum to be inserted above should be the net amount of this partial settlement, arrived at by deducting from the gross amount of settlements with subject subcontractors as approved by the Contracting Officer; the second amount to be inserted above, which is that portion of partial, progress, or advance payments liquidated by this agreement.]

ARTICLE 5. Notwithstanding any other provision of this agreement, the following rights and liabilities of the parties under the contract are hereby reserved:

[Insert here a list of the reserved or excepted rights and liabilities of the Government and the Contractor (see § 1-8.209-2). Reference is made to instructions set forth in Article 6 of the agreement set forth in § 1-8.806-1 and Article 7 of the agreement set forth in § 1-8.806-2 and to the reserved or excepted rights and liabilities set forth in those articles, which may be used as appropriately modified to meet the requirements of any given settlement hereunder.] In Witness Whereof, etc.

WHEREAS, the Termination for Default or Convenience of the Government clause of the contract provides that the performance of work under the contract may at the convenience of the Government be terminated by the Government in whole, or from time to time in part, whenever the Contracting Officer shall determine that such termination is in the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount to be paid to the Contractor by reason of such termination; and

-

WHEREAS, by notice of termination dated the Government advised the Contractor of the complete termination of the contract for the convenience of the Government; and

WHEREAS, as used herein, the following terms shall have the meanings hereinafter set forth:

(a) The term "termination inventory" means any items of physical property purchased, supplied, manufactured, furnished, or otherwise acquired for performance of the contract and properly allocable to the terminated portion of the contract. The term does not include any facilities, material, production or other equipment, or special tooling, which are subject to a separate contract or a special contract provision governing the use or disposition thereof. Termination inventory may include contractor-acquired property and Government-furnished property as defined below.

(1) "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. (2) "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.

(b) The term "subcontract" means any contract, as defined in § 1-1.208 of the Fed

NOW, THEREFORE, the parties hereto do mutually agree as follows:

ARTICLE 1. The Contractor certifies that all contract termination inventory (including scrap) has been retained or otherwise acquired by him, sold to third parties, returned to suppliers, stored for the Government, delivered to the Government, or otherwise properly accounted for, and all proceeds or retention prices thereof, if any, have been taken into account in arriving at this agreement.

ARTICLE 2. (a) The Contractor certifies that, prior to the execution of this agreement, each of the Contractor's immediate subcontractors whose claim is included in the claim settled by this agreement has furnished to the Contractor a certificate stating (1) that all of his subcontract termination inventory (including scrap) has been retained or otherwise acquired by him, sold to third parties, returned to suppliers, stored for the Government, delivered to the Government, or otherwise properly accounted for, and all proceeds or retention prices thereof, if any, were taken into account in arriving at the settlement of the subcontract or subcontracts, and (2) that the subcontractor has received from each of the immediate subcontractors whose claim was inIcluded in his claim a substantially similar certificate.

(b) The Contractor hereby transfers and conveys to the Government all the right, title, and interest, if any, which the Contractor has received, or is entitled to receive, in and to subcontract termination inventory, if any, not otherwise properly accounted for, and hereby assigns to the Government any and all of his rights relating thereto.

ARTICLE 3. The Contractor certifies that, with respect to all items of termination inventory the costs of which were taken into account in arriving at the amount of this settlement, or in the settlement of any subcontract claim included in this settlement: (a) all such items are properly allocable to the terminated portion of the contract; (b) such items are not in excess of the reasonable quantitative requirements of the terminated portion of the contract; (c) such items do not include any items reasonably usable, without loss to the Contractor, on his other work; and (d) the Contractor has informed the Contracting Officer of any substantial change in the status of such items between

§ 1-8.806-4

quired property and Gov property as defined below

(1) "Contractor-acquire property procured or oth the contractor for the per tract, whether or not th title by the terms of the cises its contractual right

(2) "Government-fur means property in the p quired directly by the Go sequently delivered or ot] able to the Contractor.

(b) The term "subcor contracts, as defined in § eral Procurement Regul 1.208), other than a prim into by a prime contract tor, calling for supplies for the performance of prime contracts.

(c) The term "scrap which has no reasonable sold except for the rec basic material content.

2

nation inventory his agreement. here the Contrace such payments, in ten (10) days nt provided for his immediate espective assignto which they if the Contracthen due and such subcon

NOW, THEREFORE, the mutually agree as follows ARTICLE 1. (a) The c that, prior to the execu ment, each of the Cont subcontractors whose cl the claim settled by this nished to the Contracto ing (1) that all his subcc inventory (including SCL tained or otherwise acqu third parties, returned tE IL for the Government, de. ernment, or otherwise for, and all proceeds thereof, if any, were tal arriving at the settlem tract or subcontracts, ar contractor has received f mediate subcontractors cluded in his claim a su certificate.

r has received of work and es delivered, he effective ernment as ent hereby right of the ions of Arheretofore nstitutes a which the and final

austers and

1 of this to pay to 1 preseners, the f settleom the of setcle 5(a) resent

the Conreceive. E invenaccounte GovernEs relating

(b) The Contractor he conveys to the Governi title, and interest, if ar tractor has received, or i in and to such subcontr ventory, to the extent ty wise properly accounted signs to the Governmen ere taken into rights relating thereto. ount of this

tifies that. nation in

ment of any sub

S payo the

liquist, of

ARTICLE 2. In all cases this settlement: tor has not previously mely allocable to the Contractor shall, Wthe contract; (b) after receipt of the pas of the reasonhereunder, pay to eacrents of the termisubcontractors (or to theact; (c) such items

ees) the respective amo reasonably are entitled, after deduc actor,

usable.

osal preern

I on his other

tor so elects, any amoctor has informed

payable to the Contract of

tractors.

any

ein

substantial between

such items

of

t],

re

ed language of the enumerated excep items on the list may be varied in the da tion of the Contracting Officer to c more accurately the exceptions needed particular case. Where greater accurac completeness may be achieved by a re ence to the number of the contract clause: provision covering the matter in quest this method of enumerating reserved ne and liabilities may be followed. Omit any: the following rights which are not appl ble and add any additional exceptions: reservations required.]

(a) Claims by the Contractor against Government for items of cost which are: subject of General Accounting Office exte tions (or other items of cost of the s nature), which are excluded from the se ment without prejudice to the rights either party, as follows: [Insert the amo and describe the claims not waived by Cz tractor.]

(b) Claims by the Contractor against Government, as to which his right of bursement is disputed, which are exclu without prejudice to the rights of eithe party as follows: [Insert the amounts describe the claims with respect to whe findings have been made by the Contract Officer disallowing the item and with spect to which the contractor has taken : intends to take, timely appeal.]

(c) Claims by the Contractor against Government which are unknown in amo and which involve costs claimed to be re bursable under the contract, as follow [Insert the estimated amounts and descr the claims.]

(d) Claims by the Contractor against Government whose existence is unknow based upon responsibility of the Contract to third parties and which involves costs imbursable under the contract.

(e) Claims by the Government against Contractor which are based upon refund rebates, credits, or other accounts not n known to the Government, together with terest thereon, now due or which m become due the Contractor from third p ties to the extent that such amounts ara out of transactions for which reimburs ment has been made to the Contract under the contract. Any such amour which may hereafter become due to Contractor from any third party or other source shall be paid to the Governmen within 30 days after receipt by the Contrac tor. Interest at the rate established by th Secretary of the Treasury pursuant Public Law 92-41 (50 U.S.C. Ant 1215(b)(2)) for the Renegotiation Boar shall accrue and shall be paid to the G ernment on any such accounts as rema inpaid after the 30-day period. (f) All rights and liabilities, if any, of th arties un the Renegotiation Act of 19

erence to applicable Renegoti

ghts and liabilities of the parties der the contract articles, if any or which relate to reproduction atent infringements, inventions, cations for patent and patents, inghts to assignments, invention relicenses, covenants of indemnity atent risks, and bonds for patent

obligations, together with all I liabilities under any such bond. rights and liabilities of the parties le contract relating to options ptions to continue or increase the er the contract), covenants not to and covenants of indemnity.

ights and liabilities of the parties eements with respect to the future disposition by the Contractor of ent-owned property remaining in ly.

rights and liabilities of the parties e contract with respect to any conmination inventory stored for the ent pursuant to Article 1 hereof. rights and liabilities of the parties e contract with respect to any and rnment property furnished to or acy the Contractor for the performhis contract.

rights and liabilities of the parties under the contract, or otherwise, ng defects in, or guarantees or warrelating to, any articles or comports furnished to the Government by tractor pursuant to the contract or eement.

l rights and liabilities, if any, of the under those clauses inserted in the because of the requirements of and Executive orders, including, limitation, any applicable clauses to the following topics: labor law, ent fees, domestic articles, employf aliens, and "officials not to benethe contract contains clauses of this er inserted for reasons other than ments of statutes or Executive the suggested language should be riately modified.]

itness Whereof, etc.

10196, July 24, 1964, as amended at #3081, Aug. 26, 1977]

06-5 Settlement agreement for use settling cost-reimbursement type me contracts after complete termition where settlement is limited to

2.

S SUPPLEMENTAL AGREEMENT OF SETTLEentered into this day of

etween the UNITED STATES OF AMERICA nafter called "the Government") rep

resented by the Contracting Officer executing this contract, and

(a) A corporation organized and existing under the laws of the State of

(b) A partnership consisting of (c)

An individual doing business as

(hereinafter called "the Contractor"). WITNESSETH THAT:

WHEREAS, the Contractor and the Government have entered into Contract No. under date of 19- which, together with any and all amendments, changes, modifications, and supplements thereto, is hereinafter referred to as "the contract";

and

WHEREAS, the Termination for Default or for Convenience of the Government clause of the contract provides that the performance of work under the contract may at the convenience of the Government be terminated by the Government in whole, or from time to time in part, whenever the Contracting Officer shall determine that such termination is in the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount to be paid to the Contractor by reason of such termination; and

WHEREAS, by notice of termination dated the Government advised the Contractor of the complete termination of the contract for the convenience of the Government; and

WHEREAS, this settlement agreement is limited to adjustment of the fee.

NOW, THEREFORE, the parties hereto do mutually agree as follows:

ARTICLE 1. (a) The Contractor has received the sum of $-- on account of his fee under the contract prior to the effective date of termination.

(b) In addition, upon execution of this agreement, the Government agrees to pay to the Contractor or his assignee, upon presentation of proper invoices or vouchers, the sum of $- [insert net amount to be paid on account of feel. Said sum, together with all other sums heretofore paid on account of fee, constitutes payment in full and complete settlement of the amount due the Contractor on account of his fee under the contract.

ARTICLE 2. The Contractor's allowable costs under the contract will be paid in accordance with the applicable provisions of the contract and of Part 1-8 of the Federal Procurement Regulations (41 CFR Part 18). [Insert this Article 2 only if there are costs to be vouchered out (see § 1-8.402(a)) or if there are costs to be covered later by a separate settlement agreement.]

ARTICLE 3. Notwithstanding any other provision of this agreement the following rights and liabilities of the parties under the contract are hereby reserved: