49.208
Equitable adjustment after partial termination
After a partial termination for convenience, contractors may request an equitable adjustment for the remaining contract work, but must ensure no costs are duplicated in both the adjustment and the termination settlement.
Overview
FAR 49.208 addresses the process for requesting and negotiating an equitable adjustment to the price of the remaining portion of a fixed-price contract after a partial termination for convenience. It ensures that contractors can seek fair compensation for changes resulting from the partial termination, but also establishes safeguards to prevent double recovery of costs between the equitable adjustment and the termination settlement. The section outlines the roles of the Termination Contracting Officer (TCO) and the contracting officer, and specifies the required proposal format.
Key Rules
- Requesting Equitable Adjustment
- Contractors may request an equitable adjustment to the price of the continued contract work after a partial termination, using the format in Table 15-2 of 15.408.
- Proposal Handling
- The TCO forwards the contractor's proposal to the contracting officer unless the TCO has been delegated negotiation authority.
- Negotiation and Settlement Safeguards
- The contracting officer (or TCO, if delegated) must ensure that costs or price increases claimed in the equitable adjustment are not also included in the termination settlement, preventing double payment.
Responsibilities
- Contracting Officers: Negotiate and execute equitable adjustments, ensuring no overlap with termination settlements.
- Contractors: Submit equitable adjustment proposals in the required format and avoid duplicating costs in both proposals.
- Agencies: Oversee compliance and proper segregation of costs between adjustments and settlements.
Practical Implications
- This section exists to ensure fair compensation for contractors while protecting the government from duplicate payments after partial terminations.
- It impacts contract administration by requiring careful documentation and coordination between the contractor, TCO, and contracting officer.
- Common pitfalls include submitting proposals in the wrong format or including the same costs in both the equitable adjustment and termination settlement.