49.205
Completed end items
FAR 49.205 ensures that completed end items are properly inspected, accepted, and either delivered or included in the settlement proposal after a contract is terminated for convenience, preventing double payment or improper claims.
Overview
FAR 49.205 addresses the handling of completed end items when a fixed-price contract is terminated for convenience. It outlines the responsibilities of the Termination Contracting Officer (TCO) and the contractor regarding inspection, acceptance, delivery, and settlement of completed items. The section distinguishes between items to be delivered and those to be included in the termination settlement, and clarifies that accepted work in place under construction contracts is not considered a completed end item for these purposes.
Key Rules
- Inspection and Acceptance of Completed End Items
- The TCO must promptly inspect and accept all undelivered completed end items that meet contract requirements after termination.
- Determination of Delivery
- The TCO decides which accepted end items should be delivered under the contract.
- Invoicing and Settlement
- Contractors must invoice for accepted and delivered end items at the contract price and exclude them from the settlement proposal. Accepted items not delivered must be included in the settlement proposal at the contract price, adjusted for savings or credits.
- Construction Contracts Exception
- Work in place accepted under construction contracts is not treated as a completed end item, even if paid for at unit prices.
Responsibilities
- Contracting Officers: Inspect, accept, and determine disposition of completed end items; ensure proper settlement procedures.
- Contractors: Invoice for delivered items, exclude them from settlement proposals, and properly account for undelivered accepted items in settlement proposals.
- Agencies: Oversee compliance with these procedures and ensure accurate settlement of terminated contracts.
Practical Implications
- Ensures clear procedures for handling completed items after contract termination, preventing double payment or improper settlement claims.
- Contractors must carefully track which items are delivered versus included in settlement proposals.
- Misclassification or failure to follow these steps can lead to disputes or payment issues.