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WHEREAS, as used herein, the following claim a substantially similar certificate. terms shall have the meanings hereinafter (b) The Contractor hereby transfers and set forth:

conveys to the Government all the right, (a) The term "termination inventory" title, and interest, if any, which the Contracmeans any items of physical property pur tor has received, or is entitled to receive, chased, supplied, manufactured, furnished, in and to subcontract termination inyenor otherwise acquired for performance of the tory, if any, not otherwise properly accontract and properly allocable to the termi counted for, and hereby assigns to the Govnated portion of the contract. The term ernment any and all of his rights relating does not include any facilities, material, pro thereto. duction or other equipment, or special tool ARTICLE 3. The Contractor certifies that, ing, which are subject to a separate contract with respect to all items of termination inor a special contract provision governing the ventory the costs of which were taken into use or disposition thereof. Termination account in arriving at the amount of this inventory may include contractor-acquired settlement, or in the settlement of any subproperty and Government-furnished prop contract claim included in this settlement: erty as defined below.

(a) all such items are properly allocable to (1) “Contractor-acquired property” means the terminated portion of the contract; (b) property procured or otherwise provided by such items are not in excess of the reasonable the Contractor for the performance of a quantitative requirements of the terminated contract, whether or not the Government has portion of the contract; (c) such items do title by the terms of the contract or exercises not include any items reasonably usable, Its contractual right to take title.

without loss to the Contractor, on his other (2) "Government-furnished property" work; and (d) the Contractor has informed means property in the possession of or the Contracting Officer of any substantial acquired directly by the Government, and change in the status of such items between subsequently delivered or otherwise made the dates of his termination inventory schedavailable to the Contractor.

ules and the date of this agreement. (b) The term "subcontract” means any ARTICLE 4. In all cases where the Contraccontract, as defined in § 1-1.208 of the Fed

tor has not previously made such payments, eral Procurement Regulations (41 CFR the Contractor shall, within ten (10) days 1-1.208), other than a prime contract, en after receipt of the payment provided for tered into by a prime contractor or a sub hereunder, pay to each of his immediate contractor, calling for supplies or services subcontractors (or to their respective asrequired for the performance of any one or signees) the respective amounts to which more prime contracts.

they are entitled, after deducting, if the (c) The term "scrap" means property Contractor so elects, any amounts then due which has no reasonable prospect of being and payable to the Contractor by such subsold except for the recovery value of its contractors basic material content.

ARTICLE 5. (a) The Contractor has received Now, THEREFORE, the parties hereto do the sum of $------ on account of work and mutually agree as follows:

services performed, or articles delivered, unARTICLE 1. The Contractor certifies that der the contract prior to the effective date all contract termination inventory (includ of termination. The Government as part of ing scrap) has been retained or otherwise this negotiated settlement hereby confirms acquired by him, sold to third parties, re and acknowledges the right of the Contracturned to suppliers. stored for the Govern. tor, subject to the provisions of Article 6 ment, delivered to the Government, or other hereof, to retain such sum heretofore paid wise properly accounted for, and all proceeds and agrees that such sum constitutes a poror retention prices thereof, if any, have been tion of the total amount to which the Contaken into account in arriving at this agree tractor is entitled in complete and final setment.

tlement of the contract. ARTICLE 2. (a) The Contractor certifies (b) In addition, upon execution of this that, prior to the execution of this agree agreement the Government agrees to pay to ment, each of the Contractor's immediate the Contractor or his assignee, upon pressubcontractors whose claim is included in the entation of proper invoices or vouchers, the claim settled by this agreement has fur

sum of $------ [insert net amount of setnished to the Contractor a certificate stating

tlement], arrived at by deducting from the (1) that all of his subcontract termination

sum of $------ (insert gross amount of setinventory (including scrap) has been re

tlement less amount set forth in Article tained or otherwise acquired by him, sold to

5(a) above), (1) the amount of $-----third parties, returned to suppliers, stored for the Government, delivered to the Gov representing all unliquidated partial or progernment, or otherwise properly accounted for, ress payments previously made on account and all proceeds or retention prices thereof, to the Contractor or his assignee and all un11 any, were taken into account in arriving liquidated advance payments (with interest, at the settlement of the subcontract or sub- of any, thereon) and (2) the amount of contracts, and (2) that the subcontractor has $------ representing all applicable property received from each of the immediate sub- disposal credits (and (3) the amount of contractors whose claim was included in his $------ representing all other amounts due

Sre paid, woment of

the Government under this contract except rebates, credits, or other accounts not now as hereinafter provided in Article 6].Said known to the Government, together with sum of $------ (insert net amount of set interest thereon, now due or which may betlement], together with all other sums here come due the Contractor from third parties tofore paid. constitutes payment in full and to the extent that such amounts arise out complete settlement of the amount due the of transactions for which reimbursement has Contractor by reason of the complete termi been made to the Contractor under the connation of work under the contract and of tract. Any such amounts which may hereall other claims and liabilities of the Con after become due to the Contractor from any tractor and the Government under the con third party or other source shall be paid to tract, except as hereinafter provided in Arti the Government within 30 days after receipt cle 6.

by the Contractor. Interest at 6 percent per ARTICLE 6. Notwithstanding any other pro annum shall accrue and shall be paid to the vision of this agreement the following rights Government on any such accounts as remain and liabilities of the parties under the con unpaid after the 30-day period. tract are hereby reserved:

(f) All rights and liabilities, if any, of the [The following list of reserved or ex- parties under the Renegotiation Act of 19.-. cepted rights and liabilities is intended to (Insert reference to applicable Renegotiation cover those which should most frequently Act.) be reserved, and which should in any event (g) All rights and liabilities of the parties be scrutinized at the time a settlement agree arising under the contract articles, if any ment is signed (see § 1-8.209–2). The sug or otherwise which relate to reproduction gested language of the enumerated excepted rights, patent infringements, inventions, and items on the list may be varied in the dis applications for patent and patents, includcretion of the Contracting Officer to covering rights to assignments, invention reports more accurately the exceptions needed in a and licenses, covenants of indemnity against particular case. Where greater accuracy or patent risks, and bonds for patent indemnity completeness may be achieved by a reference obligations, together with all rights and liato the number of the contract clause or pro bilities under any such bond. vision covering the matter in question, this (h) All rights and liabilities of the parties method of enumerating reserved rights and under the contract relating to options (exliabilities may be followed. Omit any of the cept options to continue or increase the following rights which are not applicable work under the contract), covenants not to and add any additional exceptions or reser compete, and covenants of indemnity. vations required.)

(1) All rights and liabilities of the parties (a) Claims by the Contractor against the under agreements with respect to the future Government for items of cost which are the care and disposition by the Contractor of subject of General Accounting Office excep Government-owned property remaining in tions (or other items of cost of the same his custody. nature), which are excluded from the set (1) All rights and liabilities of the parties tlement without prejudice to the rights of under the contract with respect to any coneither party, as follows: (Insert the amounts tract termination inventory stored for the and describe the claims not waived by Con Government pursuant to Article 1 hereof. tractor.]

(k) All rights and liabilities of the parties (b) Claims by the Contractor against the under the contract with respect to any and Government, as to which his right of reim all Government property furnished to or acbursement is disputed, which are excluded quired by the Contractor for the performance without prejudice to the rights of either of this contract. party as follows: (Insert the amounts and (1) All rights and liabilities of the parties describe the claims with respect to which arising under the contract, or otherwise, confindings have been made by the Contracting cerning defects in, or guarantees or warranOfficer disallowing the item and with respect ties relating to, any articles or component to which the contractor has taken, or in parts furnished to the Government by the tends to take, timely appeal.]

Contractor pursuant to the contract or this (c) Claims by the Contractor against the agreement. Government which are unknown in amount (m) All rights and liabilities, if any, of and which involve costs claimed to be re the parties under those clauses inserted in imbursable under the contract, as follows: the contract because of the requirements (Insert the estimated amounts and describe of statutes and Executive orders, including, the claims.)

without limitation, any applicable clauses (d) Claims by the Contractor against the

relating to the following topics: labor law, Government whose existence is unknown,

contingent fees, domestic articles, employbased upon responsibility of the Contractor ment of allens, and “officials not to benefit." to third parties and which involves costs re (If the contract contains clauses of this imbursable under the contract.

character inserted for reasons other than (e) Claims by the Government against the requirements of statutes or Executive orders, Contractor which are based upon refunds, the suggested language should be appropri

ately modified.] * To be inserted where appropriate.

In Witness Whereof, etc.

§ 1-8.806–5 Settlement agreement for

use in settling cost-reimbursement type prime contracts after complete termination where settlement is

limited to fee. THIS SUPPLEMENTAL AGREEMENT OF SETTLEMENT, entered into this ------ day of ----------, 19_- between the UNITED STATES OF AMERICA (hereinafter called “the Government") represented by the Contracting Officer executing this contract, and ---------

(a) A corporation organized and existing under the laws of the State of.---------;

(b) A partnership consisting of--------; (c) An individual doing business as

(hereinafter called “the Contractor"). WITNESSETH THAT:

WHEREAS, the Contractor and the Government have entered into Contract No. -----under date of ----------, 19-- which, together with any and all amendments, changes, modifications, and supplements thereto, is hereinafter referred to as "the contract”; and

WHEREAS, the Termination for Default or for Convenience of the Government clause of the contract provides that the performance of work under the contract may at the convenience of the Government be terminated by the Government in whole, or from time to time in part, whenever the contracting Officer shall determine that such termination is in the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount to be paid to the Contractor by reason of such termination; and

WHEREAS, by notice of termination dated ---------, the Government advised the Contractor of the complete termination of the contract for the convenience of the Government; and

WHEREAS, this settlement agreement is limited to adjustment of the fee.

NOW, THEREFORE, the parties hereto do mutually agree as follows:

ARTICLE 1. (a) The Contractor has received the sum of $------ on account of his fee under the contract prior to the effective date of termination.

(b) In addition, upon execution of this agreement, the Government agrees to pay to the Contractor or his assignee, upon presentation of proper invoices or vouchers, the sum of $------ [insert net amount to be paid on account of fee). Said sum, together with all other sums heretofore paid on account of fee, constitutes payment in full and complete settlement of the amount due the Contractor on account of his fee under the contract.

ARTICLE 2. The Contractor's allowable costs under the contract will be paid in accordance with the applicable provisions of the contract and of Part 1-8 of the Federal Procurement Regulations (41 CFR 1-8). [Insert this Article 2 only if there are costs

to be vouchered out (see § 1-8.402(a)) or if there are costs to be covered later by a separate settlement agreement.)

ARTICLE 3. Notwithstanding any other provision of this agreement the following rights and liabilities of the parties under the contract are hereby reserved:

The following list of reserved or excepted rights and liabilities is intended to cover those which should most frequently be reserved, and which should in any event be scrutinized at the time a settlement agreement is signed (see § 1-8.209–2). The suggested language of the enumerated excepted items on the list may be varied in the discretion of the Contracting Officer to cover more accurately the exceptions needed in a particular case. Where greater accuracy or completeness may be achieved by a reference to the number of the contract clause or provision covering the matter in question, this method of enumerating reserved rights and liabilities may be followed. Omit any of the following which are not applicable and add. any additional exceptions or reservations required.]

(a) All rights and liabilities, if any, of the parties under the Renegotiation Act of 19.- [insert reference to applicable Renegotiation Act].

(b) All rights and liabilities of the parties arising under the contract articles, if any, or otherwise which relate to reproduction. rights, patent infringement, inventions, and applications for patent and patents, including rights to assignments, invention reports and licenses, covenants of indemnity against patent risks, and bonds for patent indemnity obligations, together with all rights and liabilities under any such bond.

(c) All rights and liabilities of the parties under the contract relating to options (except options to continue or increase the work under the contract), Covenants not to compete, and covenants of indemnity.

(d) All rights and liabilities of the parties under agreement with respect to the future care and disposition by the Contractor of Government-owned property remaining in his custody.

(e) All rights and liabilities of the parties under the contract with respect to any and all Government property furnished to or acquired by the Contractor for the performance of this contract.

(f) All rights and liabilities of the parties arising under the contract, or otherwise, concerning defects in, or guarantees or warranties relating to, any articles or component parts furnished to the Government by the Contractor pursuant to the contract or this agreement.

(g) All rights and liabilities, if any, of the parties under those clauses inserted in the contract because of the requirements of statutes and Executive orders, including, without limitation, any applicable clauses relating to the following topics: labor law, contingent fees, domestic articles, employment of aliens, and “officials not to benefit."

further payments or to carry out other undertakings in connection with said terminated portion, and the Government acknowledges that the Contractor has no obligation to perform further work or services or to make further deliveries of articles or materials under the terminated portion of the contract: Provided, however, That nothing herein contained shall impair or affect in any way any other covenants, terms or conditions of the contract: And provided further, That, with respect to the terminated portion of the contract, the following rights and liabilities of the parties are reserved :

(List reserved or excepted rights and liabilities; see $ 1-8.209–2 and Article 7 of the agreement set forth in § 1-8.806-2.]

In Witness Whereof, etc. § 1-8.806–7 No-cost settlement agree

ment-complete termination. THIS SUPPLEMENTAL AGREEMENT OF SETTLEMENT, entered into this -----day of

---------, 19.- between the UNITED STATES OF AMERICA (hereinafter called “the Government”), represented by the Contracting Officer executing this contract, and -----

(a) A corporation organized and existing under the laws of the State of --

(b) A partnership consisting of ---------; (c) An individual doing business as

[If the contract contains clauses of this character inserted for reasons other than requirements of statutes or Executive orders, the suggested language should be appropriately modified.]

In Witness Whereof, etc. § 1-8.806–6 No-cost settlement agree

ment- partial termination. THIS SUPPLEMENTAL AGREEMENT OF SETTLEMENT, entered into this ------ day of ----------, 19.-, between the UNITED STATES OF AMERICA (hereinafter called “the Government”), represented by the Contracting Officer executing this contract, and ----

(a) A corporation organized and existing under the laws of the State of ----------;

(b) A partnership consisting of ---------;

(C) An individual doing business as ----------; (hereinafter called “the Contractor"). WITNESSETH THAT:

WHEREAS, the Contractor and the Government have entered into Contract No. -----under date of ----------, 19.- which, together with any and all amendments, changes, modifications, and supplements thereto, is hereinafter referred to as "the contract"; and

WHEREAS, the contract provides that the performance of work thereunder may at the convenience or option of the Government be terminated by the Government in whole, or from time to time in part, whenever any such termination is determined to be for the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of such termination; and WHEREAS, by notice of termination dated

-------, 19.-, the Government advised the Contractor of the partial termination of the contract for the convenience or at the option of the Government as of the date and to the extent provided in such notice, to which reference is hereby made as to the part terminated, and said part is hereinafter referred to as “the terminated portion of the contract”; and

WHEREAS, the Contractor is willing to waive unconditionally any claim against the Government by reason of such termination.

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE 1. The terminated portion of the contract is designated as follows: (Specify the terminated portion clearly as to items including (a) item numbers, (b) descriptions, (c) quantity terminated, (d) unit price of items, (e) total price of terminated items, and (f) any other explanation necessary to avoid uncertainty or misunderstanding.)

ARTICLE 2. The Contractor hereby unconditionally waives any claim against the Government arising under the terminated portion of the contract or by reason of its termination including, without limitaton, all obligation of the Government to make

(hereinafter called “the Contractor”). WITNESSETH THAT:

WHEREAS, the Contractor and the Government have entered into Contract No. -----under date of ---------, 19.- which, together with any and all amendments, changes, modifications, and supplements thereto, is hereinafter referred to as "the contract”; and

WHEREAS, the contract provides that the performance of work thereunder may at the convenience or option of the Government be terminated by the Government in whole, or from time to time in part, whenever any such termination is determined to be for the best interest of the Government, and that the Contractor and Contracting Officer may agree upon the whole or any part of the amount or amounts to be paid to the Contractor by reason of such termination; and

WHEREAS, by notice of termination dated ------------, 19--, the Government advised the Contractor of the termination of the contract for the convenience or at the option of the Government; and

WHEREAS, the Contractor is willing to waive unconditionally any claim against the Government by reason of such termination.

Now, THEREFORE, the parties hereto agree as follows:

ARTICLE 1. The Contractor hereby unconditionally waives any claim against the Goyernment by reason of the termination of the contract and, except as set forth below, releases it from any and all obligations arising under the contract or by reason of its termination; and the Government agrees that

all obligations arising under the contract or

Subpart 1-10.3— Insurance General by reason of its termination, shall be deemed

Sec. to be concluded; except as follows:

1-10.300 (List reserved or excepted rights and lia

Scope of subpart.

1-10.301 General bilities; see 1-8.209–2 and Article 6 of the

1-10.302 Notice agreements set forth in § 1-8.806–1.]

of cancellation or In Witness Whereof, etc.

change. 1-10.303 Responsibility for loss of or

damage to Government propPART 1-9 [RESERVED]

erty. 1-10.304 Insurance against loss of or

damage to Government propPART 1-10_BONDS AND

erty. INSURANCE

1-10.305 Procedures to be followed in Sec.

the event of loss or damage to 1–10.000 Scope of part.

Government property.
Subpart 1-10.1—Bonds

Subpart 1-10.4— Insurance Under Fixed-Price

Contracts 1-10.100 Scope of subpart. 1-10.101 Applicability.

1-10.400 Scope of subpart. 1-10.102 Definitions.

1-10.401

Policy. 1-10.102-1 Bond.

1-10.402 Workimen's Compensation in1-10.102–2 Bid guarantee.

surance overseas. 1-10.102-3 Performance bond.

Subpart 1-10.5-Insurance Under Cost1-10.102-4 Payment bond.

Reimbursement Type Contracts 1-10.102-5 Advance payment bond. 1-10.102-6 Patent infringement bond.

1-10.500 Scope of subpart. 1-10.102-7 Construction contract.

1-10.501 Policy. 1-10.102-8 Annual bid bond.

1-10.502 Types of insurance. 1-10.102-9 Annual performance bond.

1-10.502–1 Workmen's compensation and 1-10.102–10 Consent of surety.

employers' liability insurance. 1-10.102–11 Penal sum or amount.

1-10.502–2 General liability insurance. 1-10.103 Bid guarantees.

1-10.502-3 Automobile liability insurance. 1–10.103-1 Policy on use.

1-10.502-4 Aircraft public and passenger 1-10.103—2 Amount required.

liability insurance. 1-10.103-3 Invitation for bids provisions. 1-10.502–5 Vessel collision liability and 1-10.103–4 Failure to submit proper bid

protection and indemnity liguarantee.

ability insurance. 1-10.104 Performance bonds.

1-10.503 Self-insurance. 1-10.104-1 Construction contracts.

1-10.504 Government property 1-10.104–2 Other than construction con

[Reserved]. tracts.

AUTHORITY: The provisions of this part 11-10.104-3 Annual performance bonds.

10 issued under sec. 205(c), 63 Stat. 390; 40 1-10.105 Payment bonds.

U.S.C. 486(C). 1-10.105–1 Construction contracts. 1-10.105–2 Other than construction con

SOURCE: The provisions of this Part 1-10 tracts.

appear at 29 F.R. 10247, July 24, 1964, unless 1-10.105–3 Furnishing information to sub

otherwise noted. contractors and suppliers. § 1-10.000 Scope of part. 1-10.106 Advance payment bonds.

This part prescribes policies and pro1-10.107 Patent infringement bonds. 1-10.108 Other types of bonds.

cedures with respect to the use of bonds 1-10.109 Execution and administration

and insurance in connection with pro

curement contracts. Specifically dealt of bonds.

with are such subjects as bid guarantees. Subpart 1-10.2—Sureties on Bonds bonds, suretles, and insurance. 1–10.201 General.

Subpart 1-10.1-Bonds 1-10.202 Corporate suretles. 1-10.203 Individual sureties.

f 1-10.100 Scope of subpart. 1-10.204 Options in lieu of suretles.

This subpart deals, primarily, with 1–10.204–1 United States bonds or notes. the use of bonds. It deals also, however, 1-10.204–2 Certified or cashier's checks, with the use of bid guarantees which,

bank drafts, money orders, while most frequently in bond form, may currency, or irrevocable let

take other forms. ters of credit. 1-10.205 Consent of surety.

§ 1-10.101 Applicability. 1-10.206 Furnishing information to This Subpart 1-10.1 is applicable both sureties.

to negotiated and formally advertised

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