ATTACHMENT 1

+-------------+-------------------------------------------+-----------+
| Important   |                                           |           |
| Definitions |                                           |           |
| and         |                                           |           |
| References: |                                           |           |
+-------------+-------------------------------------------+-----------+
| Contracting | Conservation Programs Manual              | **CPM     |
| Policy      |                                           | Part      |
|             | Part 512 -- Conservation Program          | 512**     |
|             | Contracting                               |           |
+-------------+-------------------------------------------+-----------+
| Definitions |                                           |           |
+-------------+-------------------------------------------+-----------+
| C           | Cancellation is an equitable remedy that  | **CPM     |
| ancellation | allows both parties to the contract to    | 512.57**  |
|             | end the contractual relationship.         |           |
|             | Participants must request cancellation in |           |
|             | writing and provide reasons for the       |           |
|             | cancellation.                             |           |
|             |                                           |           |
|             | **-** Initiated by participant in writing |           |
|             |                                           |           |
|             | **-** Preferred method for ending         |           |
|             | contract   **-** May or may not result in |           |
|             | cost recovery (see  liquidated damage     |           |
|             |                                           |           |
|             | Matrix                                    |           |
|             |                                           |           |
|             | \- Liquidated damages may be assessed for |           |
|             | specific situations (see                  |           |
|             |                                           |           |
|             | liquidated damage matrix)                 |           |
+-------------+-------------------------------------------+-----------+
| Termination | A contract is subject to termination as a | **CPM     |
|             | result of a material breach of the terms  | 512.57**  |
|             | and conditions including in the           |           |
|             | Conservation Program Contract (CPC).      |           |
|             |                                           |           |
|             | **-** Initiated by NRCS - Participant is  |           |
|             | usually non-responsive                    |           |
|             |                                           |           |
|             | \- May or may not result in cost recovery |           |
|             | (see liquidated damage                    |           |
|             |                                           |           |
|             | matrix)                                   |           |
|             |                                           |           |
|             | \- Usually results in an assessment of    |           |
|             | liquidated damages for a                  |           |
|             |                                           |           |
|             | recovery of costs associated with         |           |
|             | administration of the breached            |           |
|             |                                           |           |
|             | contract (see liquidated damage matrix)   |           |
+-------------+-------------------------------------------+-----------+
| Note on     |                                           |           |
| \"Recovery  |                                           |           |
| of Costs\": |                                           |           |
| This is a   |                                           |           |
| term of     |                                           |           |
| policy that |                                           |           |
| generally   |                                           |           |
| includes    |                                           |           |
| both        |                                           |           |
| subjects of |                                           |           |
| *recovery   |                                           |           |
| of          |                                           |           |
| financial   |                                           |           |
| assistance  |                                           |           |
| (contract   |                                           |           |
| payments)   |                                           |           |
| [and]{      |                                           |           |
| .underline} |                                           |           |
| the         |                                           |           |
| assessment  |                                           |           |
| of          |                                           |           |
| technical   |                                           |           |
| assistance* |                                           |           |
| costs       |                                           |           |
| (*adm       |                                           |           |
| inistrative |                                           |           |
| cost        |                                           |           |
| recovery*/  |                                           |           |
| *liquidated |                                           |           |
| damages).*  |                                           |           |
| Refer to    |                                           |           |
| CPM, Part   |                                           |           |
| 512.58 for  |                                           |           |
| detailed    |                                           |           |
| e           |                                           |           |
| xplanation. |                                           |           |
| Following   |                                           |           |
| are         |                                           |           |
| generalized |                                           |           |
| d           |                                           |           |
| efinitions. |                                           |           |
+-------------+-------------------------------------------+-----------+
| Cost        | NRCS may require participant(s) to:       | **CPM     |
| Recovery    |                                           | 512.58**  |
|             | \- Refund, with interest, payment(s)      |           |
|             | received through the program              | *         |
|             |                                           | *CCC-1200 |
|             | contract. Recoveries of payments made are | Appendix  |
|             | associated with                           | EQIP-7    |
|             |                                           | CFR       |
|             | Financial Assistance (FA) funds paid      | 1466.26** |
|             | through the contract                      |           |
|             |                                           | **5       |
|             | \- Assessment of liquidated damages based | 115.116** |
|             | upon an estimation of                     |           |
|             |                                           | **        |
|             | actual damages to be recovered by NRCS    | WHIP-7CFR |
|             | for cost of administrative                | 636.12**  |
|             |                                           |           |
|             | and technical service cost provided.      | **CPM     |
|             |                                           | 517.46**  |
|             |                                           |           |
|             |                                           | *(A       |
|             |                                           | ssessment |
|             |                                           | of        |
|             |                                           | l         |
|             |                                           | iquidated |
|             |                                           | damages   |
|             |                                           | does not  |
|             |                                           | apply for |
|             |                                           | WHIP      |
|             |                                           | co        |
|             |                                           | ntracts)* |
+-------------+-------------------------------------------+-----------+
| Adm         | NRCS may require participant(s) to pay    |           |
| inistrative | administrative cost recovery/liquidated   |           |
| Cost        | damages for recovery of administrative    |           |
| Recovery    | costs and technical services provided and |           |
| /Liquidated | are not considered a penalty. As NRCS is  |           |
| Damages     | unable to quantify with certainty the     |           |
|             | substantial cost in administering the     |           |
|             | contract and services, rule and policy    |           |
|             | generally allow assessment of liquidated  |           |
|             | damage up to an amount equal to 20        |           |
|             | percent of the total financial assistance |           |
|             | obligated to the participant at the time  |           |
|             | of cancellation.                          |           |
+-------------+-------------------------------------------+-----------+