PART 1849

**TERMINATION OF CONTRACTS**

**TABLE OF CONTENTS**

**SUBPART [1849.1](#OLE_LINK1) GENERAL PRINCIPLES**

1849.101 Authorities and responsibilities.

1849.101-70 NASA authorities and responsibilities.

1849.101-71 Termination authority.

1849.102 Notice of termination.

1849.102-70 Prior clearance of significant contract terminations.

1849.102-71 Prior clearance of contract terminations resulting from a
major

breach of safety or security.

1849.105 Duties of termination contracting officer after issuance of
notice of termination.

1849.105-70 Termination docket checklist.

1849.110 Settlement negotiation memorandum.

1849.110-70 Memorandum contents.

1849.111 Review of proposed settlements.

**SUBPART [1849.5](#OLE_LINK5) CONTRACT TERMINATION CLAUSES**

1849.505 Other termination clauses.

1849.505-70 NASA contract clause.

PART 1849

**TERMINATION OF CONTRACTS**

**Subpart** []{#OLE_LINK1 .anchor}**1849.1\--General Principles**

**1849.101**  **Authorities and responsibilities.**

**1849.101-70** NASA authorities and responsibilities.

\(a\) Installations shall appoint a termination contracting officer
(TCO) (see [**FAR
2.101**](http://www.arnet.gov/far/current/html/Subpart_2_1.html#1046493))
to perform specific duties relat­ing to contract termination as one of
that individual\'s primary functions. In addition to the
responsibilities described in this part and [**FAR Part
49**](http://www.arnet.gov/far/current/html/Subpart_49_1.html#1047831),
such duties should include \--

\(1\) 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; and

\(3\) Issuing notices of termination, rein­statement, and recision to
contractors;

\(b\) 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
negotiation of termination settlement function shall be made in
accordance with [**FAR Subpart
42.2**](http://www.arnet.gov/far/current/html/Subpart_42_2.html#1046609)
and
[**1842.2**](http://www.hq.nasa.gov/office/procurement/regs/1842.htm#P111_6740).

**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.**

\(a\) Congressional notification is required for any termination
involving a reduction in employment of 100 or more contractor employees.
Proposed terminations must be cleared through the Headquarters Office of
Legislative Affairs (Code LB) before release of the termination notice,
or any information on the proposed termination, to the contractor.
Proposed terminations expected to result in a reduc­tion of fewer than
100 should be similarly cleared if the installation believes it to be
significant.

\(b\) The contracting officer shall submit the following information to
Code LB, and a copy to the Office of Procurement (Code HS), as soon as
possible after the decision to terminate is made. Until clearance is
obtained, this information shall be treated as "For Official Use Only"
unless the information is classified.

\(1\) 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.

\(c\) To minimize termination costs, Code LB shall act promptly on the
request and provide a response not later than two working days after
receipt of the information in paragraph (b) of this section.

1849.102-71 Prior clearance of contract terminations resulting from a
major breach of safety or security.

The Assistant Administrator for Procurement (Code HS) must be notified
prior to taking any action to terminate because of a major breach of
safety or security.

**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.

**1849.110 Settlement negotiation memorandum.**

**1849.110-70 Memorandum contents.**

The TCO shall include the following information in the settlement
negotiation memorandum. Contractors and subcontractors are encouraged to
use this format appropriately modified for subcontract settlements
submitted for review and approval.

\(a\) *General information.*

\(1\) *Identification.*

\(i\) Name and address of the contractor and any pertinent affiliation
between prime contractors and subcontractors rela­tive to the overall
settlement.

\(ii\) Names and titles of contractor and Govern­ment person­nel who
participated in the negotiation.

\(2\) *Description of terminated contract.*

\(i\) Contract number

\(ii\) Date of award;

\(iii\) Contract type;

\(iv\) General description of con­tract items;

\(v\) Total contract price; and

\(vi\) Applicable contract termi­nation provisions and clause.

\(3\) *Termination notice.*

\(i\) Date of the termination notice;

\(ii\) Effective date of termi­na­tion;

\(iii\) Scope and nature of termi­na­tion (complete or partial);

\(iv\) Items terminated;

\(v\) Unit prices;

\(vi\) Total price of items termi­nated for fixed-price contracts or the
estimated cost and fee applicable to items terminated for
cost-reimbursement type contracts;

\(vii\) Whether the termination no­tice was amended and, if so, why;

\(viii\) Whether the contractor stopped work on the termination
effective date (if it did not, furnish details) and whether subcontracts
were terminated promptly;

\(ix\) Any redirection of common items and return of goods to the
contractor\'s suppliers; and

\(x\) Extent of contract perfor­mance and timely deliveries by the
contractor.

\(b\) *Contractor\'s settlement proposal.*

\(1\) *Date and amount.* 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.* E.g., inventory, total cost, or other basis,
including an explanation of any approvals granted in connec­tion with
submission on other than an inventory basis.

\(3\) *Examination of proposal.* Types of reviews made and by whom
(audit, engineering, legal, or other).

\(c\) *Tabular summary of contractor\'s claim and the settlement.* The
cost elements/items, the amounts claimed, the Government recom­mended
position (includ­ing auditor, field, and technical personnel
recommendations), and the negotiated settlement amounts. This summary
shall include, if appropriate, previously 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 summary
of the negotiated settlement shall include the amount claimed and
allowed for contractor and/or subcontractor changes, disposal, prior
pay­ment credits, and contract price.

\(d\) *Settlement narrative summary.*

\(1\) Contractor\'s cost.

\(2\) Profit/Fee*.*

\(3\) Settlement expenses not included in the audit.

\(4\) Number and dollar amount of any subcontractor settlements approved
by the TCO and concluded by the contractor under delegation of
authority.

\(5\) Total amount of any partial payments.

\(6\) Total of unliquidated progress or advance payments.

\(7\) Claims of the Government against the contractor included in
settlement agree­ment reservations.

\(8\) Assignments, including the name and ad­dress of each assignee.

\(9\) Disposal credits.

\(10\) Status of plant clearance actions and all inventory sold,
retained, or otherwise properly dis­posed of in accordance with
applicable plant clear­ance regulations, including a consoli­dated closing
plant clearance report, if applicable.

\(11\) Status of Government property accountability.

\(12\) Disposition of any special tool­ing, if applicable.

\(13\) Proposed reservations of rights to the Government or to the
contractor.

\(e\) *Recommendation.* Amount of the gross settlement rec­ommended and
TCO statement that it is fair and reason­able to the Government and the
contractor.

\(f\) *TCO Signature and date.*

**1849.111 Review of proposed settlements.**

**(1)** Settlements shall be reviewed in accordance with
center-prescribed procedures.

**(2)** The TCO may authorize the contract adminis­tration office
cognizant of a lower-tier subcontractor to grant approval or
ratifica­tion of proposed subcontractor settle­ments de­scribed in [**FAR
49.108-3(c)**](http://www.arnet.gov/far/current/html/Subpart_49_1.html#1046720)
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.

**Subpart** []{#OLE_LINK5 .anchor}**1849.5\--Contract** **Termination
Clauses**

**1849.505**  **Other** **termination** **clauses.**

**1849.505-70 NASA contract clause.**

The contracting officer shall insert the clause at
[**1852.249-72**](http://www.hq.nasa.gov/office/procurement/regs/5245-end.htm#1852.249-72),
Termination (Utili­ties), in all solicitations and contracts for
utilities services.