49.304-2
Submission of settlement proposal (fee only)
Contractors must submit a substantiated, fee-only settlement proposal to the TCO within one year of partial termination, using the prescribed form or a certified letter.
Overview
FAR 49.304-2 outlines the requirements for contractors to submit a settlement proposal when only a fee adjustment is involved following a partial contract termination. The regulation specifies that the proposal must be limited to the proposed reduction in the fee amount and must be submitted to the Termination Contracting Officer (TCO) within one year of the termination's effective date, unless the TCO grants an extension. The submission can be made using the standard form referenced in FAR 49.602-1 or by a certified letter. Contractors are also required to provide substantiation for the fee amount claimed, as detailed in FAR 49.305.
Key Rules
- Fee-Only Settlement Proposal
- The proposal must address only the reduction in the contract fee due to partial termination.
- Submission Deadline
- The final proposal must be submitted within one year of the termination's effective date, unless extended by the TCO.
- Submission Format
- Proposals may be submitted using the prescribed form (FAR 49.602-1) or by a certified letter.
- Substantiation Requirement
- The contractor must substantiate the claimed fee amount as per FAR 49.305.
Responsibilities
- Contracting Officers: Review and process fee-only settlement proposals, grant extensions if justified, and ensure substantiation is adequate.
- Contractors: Submit a fee-only proposal within the required timeframe, use the correct format, and provide supporting documentation for the claimed fee.
- Agencies: Oversee compliance with submission and substantiation requirements.
Practical Implications
- This section ensures that fee adjustments after partial terminations are handled transparently and within a set timeframe.
- Contractors must be diligent in preparing and substantiating their proposals to avoid delays or rejections.
- Missing the one-year deadline or failing to provide adequate substantiation can jeopardize recovery of the fee.