49.105-2 Release of excess funds
Source: FAR 49.105-2 on acquisition.gov
Promptly releasing excess funds after contract termination ensures efficient fund management and compliance with settlement requirements.
Overview
FAR 49.105-2 outlines the procedures for releasing excess funds after a contract termination notice has been issued. The Termination Contracting Officer (TCO) must estimate the funds needed to settle the termination and recommend the release of any excess funds to the contracting officer within 30 days of receiving the termination notice. The contracting officer (or TCO, if delegated) should promptly deobligate these excess funds. The TCO should not recommend releasing amounts under $1,000 unless specifically requested. Ongoing monitoring of required funds is necessary to ensure timely release of any further excess funds, and if a shortage occurs due to previous releases, the TCO must notify the contracting officer for prompt reinstatement of funds within 30 days.
Key Rules
- Initial Release of Excess Funds
- TCO must estimate settlement funds and recommend release of excess funds within 30 days of termination notice.
- Deobligation Process
- Contracting officer or TCO (if delegated) must promptly deobligate excess funds.
- Minimum Release Threshold
- Do not recommend release of amounts under $1,000 unless requested by the contracting officer.
- Ongoing Surveillance
- TCO must continuously monitor fund requirements and recommend further releases as appropriate.
- Shortage Correction
- If a shortage occurs, TCO must notify the contracting officer, who must reinstate funds within 30 days.
Responsibilities
- Contracting Officers: Deobligate excess funds promptly and reinstate funds within 30 days if a shortage is identified.
- Contractors: Be aware of potential changes in available funds after contract termination.
- Agencies: Ensure oversight of fund management and compliance with release and reinstatement timelines.
Practical Implications
- Ensures efficient management of government funds after contract termination.
- Prevents unnecessary retention of funds and supports timely settlement.
- Delays or errors in fund release or reinstatement can impact settlement and compliance.
(a) The TCO shall estimate the funds required to settle the termination, and within 30 days after the receipt of the termination notice, recommend the release of excess funds to the contracting officer. The initial deobligation of excess funds should be accomplished in a timely manner by the contracting officer, or the TCO, if delegated the responsibility. The TCO shall not recommend the release of amounts under $1,000, unless requested by the contracting officer.
(b) The TCO shall maintain continuous surveillance of required funds to permit timely release of any additional excess funds (a recommended format for release of excess funds is in 49.604). If previous releases of excess funds result in a shortage of the amount required for settlement, the TCO shall promptly inform the contracting officer, who shall reinstate the funds within 30 days.