49.603-9
Settlement of reservations
FAR 49.603-9 ensures that all reserved items from a contract termination are formally settled and both parties release each other from further claims, using prescribed language in SF 30.
Overview
FAR 49.603-9 provides the required language and structure for documenting the settlement of reservations in termination for convenience settlement agreements using Standard Form 30 (SF 30). This section ensures that any items previously excepted or reserved from a prior settlement agreement are formally addressed and resolved. It specifies the content to be inserted in Block 14 of SF 30, including the identification of the supplemental agreement, the listing of reserved items, the agreed payment amount, and a mutual release of further claims related to those items. The section also clarifies that if payment is due to the Government instead of the contractor, the roles should be reversed in the agreement text.
Key Rules
- Settlement of Reserved Items
- All previously excepted or reserved items from a termination settlement must be specifically listed and addressed in a supplemental agreement.
- Mutual Release of Claims
- Upon settlement and payment, both parties release each other from any further liability or claims related to the reserved items.
- Role Reversal for Payments
- If the payment flows from contractor to Government, the agreement language must be adjusted accordingly.
Responsibilities
- Contracting Officers: Must ensure the correct language is inserted in SF 30 and that all reserved items are clearly listed and settled.
- Contractors: Must review and agree to the settlement terms and ensure all claims related to reserved items are resolved.
- Agencies: Must oversee proper documentation and compliance with FAR requirements for termination settlements.
Practical Implications
- This section ensures finality and clarity in contract terminations by formally resolving any outstanding reserved items.
- It prevents future disputes by requiring a mutual release of claims once settlement is reached.
- Common pitfalls include failing to list all reserved items or using incorrect language, which can lead to unresolved liabilities.