49.109-6 Joint settlement of two or more settlement proposals
Source: FAR 49.109-6 on acquisition.gov
Joint settlement of multiple contract terminations with one contractor is allowed with their consent, but requires clear documentation, proper apportionment, and distribution of agreements for each contract involved.
Overview
FAR 49.109-6 addresses the process for joint settlement of two or more termination settlement proposals submitted by the same contractor under different contracts, which may even span different contracting offices or agencies. With the contractor's consent, Termination Contracting Officers (TCOs) can negotiate these settlements together to streamline the process and consolidate accounting work. The regulation outlines specific requirements for documenting and apportioning the settlement when multiple contracts are involved, ensuring clarity and proper record-keeping across all affected contracts.
Key Rules
- Joint Negotiation with Contractor Consent
- TCOs may jointly negotiate settlements for multiple contracts with the same contractor, provided the contractor agrees.
- Consolidated Accounting
- Accounting work should be consolidated as much as practical during joint settlements.
- Settlement Agreement Requirements
- If a single agreement covers multiple contracts, it must: clearly identify all contracts, assign amendment/modification numbers, apportion the settlement amount reasonably, include a schedule of apportionment, and be distributed/attached to each contract as with other modifications.
Responsibilities
- Contracting Officers: Obtain contractor consent, ensure proper documentation, assign modification numbers, apportion settlement amounts, and distribute agreements appropriately.
- Contractors: Provide consent for joint settlement and cooperate in consolidated accounting and documentation.
- Agencies: Oversee compliance with joint settlement procedures and ensure proper record-keeping.
Practical Implications
- This section facilitates efficient resolution of multiple contract terminations with a single contractor, reducing administrative burden and potential inconsistencies. Proper documentation and apportionment are critical to avoid disputes and ensure transparency. Common pitfalls include failing to clearly identify contracts or improperly apportioning settlement amounts.
(a) With the consent of the contractor, the TCO or TCO’s concerned may negotiate jointly two or more termination settlement proposals of the same contractor under different contracts, even though the contracts are with different contracting offices or agencies. In such cases, accounting work shall be consolidated to the greatest extent practical. The resulting settlement may be evidenced by one settlement agreement covering all contracts involved or by a separate agreement for each contract involved.
(b) When the settlement agreement covers more than one contract, it shall-
(1) Clearly identify the contracts involved,
(2) Assign an amendment modification number to each contract,
(3) Apportion the total amount of the settlement among the several contracts on some reasonable basis,
(4) Have attached or incorporated a schedule showing the apportionment, and
(5) Be distributed and attached to each contract involved in the same manner as other contract modifications.