General
Settlement agreements after contract termination must be executed on SF 30 and must comprehensively address government setoffs and all subcontractor settlement proposals unless specifically excluded.
Overview
FAR 49.109-1 outlines the general requirements for executing a settlement agreement following the negotiation of a termination settlement. Once all necessary reviews are complete, both the contractor and the Termination Contracting Officer (TCO) must formalize the settlement using Standard Form 30 (SF 30). The agreement must address any government setoffs against the contractor related to the terminated contract and must include all subcontractor settlement proposals, unless specifically excluded and reserved for separate settlement. This ensures that all financial and contractual obligations are resolved in a single, comprehensive agreement, streamlining the closeout process after contract termination.
Key Rules
- Execution of Settlement Agreement
- Settlement agreements must be executed on Standard Form 30 after negotiations and required reviews.
- Inclusion of Setoffs and Subcontractor Proposals
- The agreement must account for any government setoffs and all subcontractor settlement proposals, except those specifically excluded.
Responsibilities
- Contracting Officers: Ensure all reviews are complete, execute the settlement on SF 30, and include all required elements in the agreement.
- Contractors: Cooperate in the negotiation, ensure all subcontractor proposals are submitted, and sign the SF 30.
- Agencies: Oversee the review process and ensure compliance with settlement procedures.
Practical Implications
- This section ensures that all financial matters related to a terminated contract are resolved in a single agreement, reducing the risk of future disputes.
- Contractors must be diligent in gathering and submitting all subcontractor proposals and understanding any government setoffs that may apply.
- Failure to properly execute the settlement agreement can delay contract closeout and final payment.