49.206
Settlement proposals
FAR 49.206 requires contractors to submit timely, well-documented settlement proposals and inventory schedules after a fixed-price contract is terminated for convenience.
Overview
FAR 49.206 outlines the requirements for submitting settlement proposals after a fixed-price contract is terminated for convenience. It details how contractors must prepare and submit their proposals, the acceptable bases for calculating settlement amounts, and the requirement to provide inventory disposal schedules. The section ensures that contractors follow standardized procedures to facilitate fair and efficient settlements with the government.
Key Rules
- Submission of Settlement Proposals
- Contractors must submit settlement proposals within a specified timeframe after receiving a notice of termination, using prescribed forms and formats.
- Bases for Settlement Proposals
- Proposals may be based on inventory cost, total cost, or other approved methods, depending on the contract and circumstances.
- Submission of Inventory Disposal Schedules
- Contractors must provide detailed schedules of inventory acquired or produced for the contract, supporting the settlement proposal and enabling proper disposition.
Responsibilities
- Contracting Officers: Review and approve settlement proposals, ensure compliance with submission requirements, and oversee inventory disposition.
- Contractors: Prepare and submit accurate, timely settlement proposals and inventory schedules as required.
- Agencies: Monitor compliance and provide guidance on settlement procedures.
Practical Implications
- This section exists to standardize the settlement process after contract termination, ensuring transparency and fairness.
- It impacts contractors by requiring detailed documentation and timely submission of proposals and inventory lists.
- Common pitfalls include late submissions, incomplete inventory schedules, or using incorrect bases for settlement calculations.