Page images
PDF
EPUB

tractor may include his claim statement with his apprisal notice. Because the clause previously prescribed made no reference to the constructive change situation, that clause did not cover the furnishing in such a situation either of an apprisal notice or of a claim statement. In effect, the clause merely required the contractor to submit a notice of intent to assert a claim where a change order issued. Also, there was no specific requirement to provide information on the nature and extent of the claim, based on either a change order or a constructive change. Such additional information will enable the contracting officer to evaluate a claim properly, particularly in a constructive change situation. A further revision concerns the authorization to extend the time for the filing of a claim. Under the text of the clause previously prescribed, the time for submitting the assertion of a claim could be extended by the "contracting officer." Under the clause as revised, the time for the submission of the claim may be extended by the "Government," which includes a contract appeals board. Whether the Government would be prejudiced thereby is for consideration in granting an extension.

(6) Paragraph (f) (the subject matter of which appeared in the clause previously prescribed merely as a dependent phrase rather than as an independent statement) states that a claim for an equitable adjustment under the clause must be asserted prior to final payment.

(7) The disputes provision which appeared in the text of the clause previously prescribed has been deleted. The existence of an administrative remedy is established by the Disputes clause. Accordingly, there is no need to reiterate in clauses covering particular aspects of the contractual agreement the availability of that remedy. It must be emphasized that deletion of a separate disputes provision from the Changes clause (or from the Differing Site Conditions clause or the Suspension of Work clause) does not alter or diminish in any respect the applicability of the Disputes clause or the jurisdiction of administrative boards, which will continue to be subject to the limitations imposed by the Wunderlich Act.

(8) The extra work or material provision which appeared in the final sentence of the clause previously prescribed has been deleted. The provision appears to be unnecessary because the revised clause will cover all applications for adjustment thereunder, whether based upon a change order or a constructive change.

b. Differing Site Conditions clause. The Differing Site Conditions clause has been developed to coordinate its text with that of the Changes clause as revised. The principal revisions in the Differing Site Conditions clause are as follows:

(1) The former title, "Changed Conditions," has been replaced by the new title, "Differing Site Conditions" to describe more accurately the subject matter of the clause.

(2) The phrases, "any part of the work" and "whether or not changed," have been added to conform the text of paragraph (a) with similar provisions of the Changes clause.

(3) Like paragraph (e) of the Changes clause, which relates to a prescribed notice to be provided by the contractor, paragraph (b) of the Differing Site Conditions clause states that the time for furnishing a prescribed notice may be extended by the "Government." The term "Government" has been substituted for the term "contracting officer" in this provision for the same reason that such substitution has been made in a similar provision of the Changes clause.

(4) The separate disputes provision included in the prior Changed Conditions clause has been deleted for the same reasons that such provision has been deleted from the Changes clause.

c. Suspension of Work clause. The Suspension of Work clause has been revised to coordinate its text with that the Changes clause as revised. The principal revisions in the Suspension of Work clause are as follows:

(1) The abbreviated title, "Suspension of Work," commonly used in making reference to the clause, has been adopted in lieu of the longer title appearing in the clause previously prescribed.

(2) The text of paragraph (b) of the clause has been modified and some clarifications and editorial revisions have also been made. Accordingly, the phrase "without fault or negligence of the contractor" which appeared in the first sentence of the counterpart paragraph of the clause previously prescribed has been removed and has been added to the second sentence of the paragraph. For clarification, the second sentence of the clause as revised specifically indicates that an adjustment is not to be made under the clause in any instance where "an equitable adjustment is provided for or excluded under any other provision" of the contract. Accordingly, where a claim for delay expense is cognizable under the Changes clause or the Government-Furnished Property clause, for example, an adjustment will be for consideration under these clauses in preference to the Suspension of Work clause. Furthermore, granting an extension of time under the "Delays-Damages" clause (Clause 5 of Standard Form 23-A) does not preclude a price adjustment under the Suspension of Work clause.

(3) The separate disputes provision appearing in the clause previously prescribed has been deleted from the text for the same

[blocks in formation]

1-8.203

Methods of settlement.

1-8.204 Duties of prime contractor after receipt of notice of termination. 1-8.205 Duties of contracting officer after issuance of notice of termination. 1-8.206 Fraud or other criminal conduct. 1-8.207 Accounting review of prime contract settlement proposals and of subcontract settlements.

1-8.208 Settlement of subcontract claims. 1-8.208-1 Subcontractor's rights. 1-8.208-2 Prime contractor's rights and obligations.

1-8.208-3 Settlement procedure. 1-8.208-4 Authorization for subcontract

settlements without approval or ratification.

1-8.208-5 Recognition of judgments and arbitration awards.

1-8.208-6 Delay in settlement of subcontractor claims.

1-8.208-7 Government assistance in settle

ment of subcontractors.

1-8.208-8 Assignment of rights under sub

contracts.

1-8.209 Settlement agreements. 1-8.209-1 General.

1-8.209-2 Excepted items.

1-8.209-3 Government property.

1-8.209-4 No-cost settlement.

1-8.209-5 Partial settlements.

1-8.209-6 Joint settlement of two or more claims.

1-8.209-7 Settlement by determination. 1-8.210 Contracting Officer's negotiation memorandum.

1-8.211 Review and approval of proposed settlements.

1-8.211-1 Settlement review boards.
1-8.211-2 Required review and approval.
1-8.211-3 Scope of review.
1-8.211-4 Action by board.

[blocks in formation]

Subpart 1-8.4-Additional Principles Applicable to the Settlement of Cost-Reimbursement Type Contracts Terminated for Convenience 1-8.401 General.

1-8.402 Discontinuance of invoices or

[blocks in formation]
[blocks in formation]
[blocks in formation]

Subpart 1-8.8-Formats of Notices, Forms,
Warranties, and Agreements

1-8.800 Scope of subpart.

1-8.801 Notice of termination for convenience of the Government

1-8.801-1 Telegraphic notice. 1-8.801-2 Letter notice.

1-8.802 Formats of settlement proposal forms.

1-8.802-1 Format 802-1, Settlement Pro

posal (Inventory Basis)-fixed-price type contracts.

1-8.802-2 Format 802-2, Settlement Pro

posal (Total Cost Basis)-fixed-price type contracts.

1-8.802-3 Format 802-3, Settlement Proposal (Short Form)-fixed-price type contracts.

1-8.802-4 Format 802-4, Settlement Proposal for Cost-Reimbursement Type Contracts.

1-8.803 Formats of inventory schedules. 1-8.803-1 Format 803-1, Inventory Schedule A (Metals in Mill Product Form).

Sec.

1-8.803-2 Format 803-2, Inventory Sched

ule A-Continuation Sheet (Metals in Mill Product Form).

1-8.803-3 Format 803-3, Inventory Schedule B.

1-8.803-4 Format 803-4, Inventory Sched

ule B-Continuation Sheet. 1-8.803-5 Format 803-5, Inventory Schedule C (Work in Process). 1-8.803-6 Format 803-6, Inventory Sched

ule C-Continuation Sheet (Work in Process).

1-8.803-7 Format 803-7, Inventory Schedule D (Dies, Jigs, Fixtures, etc., and Special Tools). 1-8.803-8 Format 803-8, Inventory Sched

ule D-Continuation Sheet (Dies, Jigs, Fixtures, etc., and Special Tools). 1-8.803-9 Format 803-9, Termination Inventory Schedule E (Short Form for Use with Format 802-3 Only).

1-8.804 Formats of miscellaneous forms. 1-8.804-1 Format 804-1, Schedule of Accounting Information.

1-8.804-2 Format 804-2, Application for Partial Payment.

1-8.805 Scrap warranty.

1-8.806 Formats of settlement agreement. 1-8.806-1 Settlement agreement for use in

settling fixed-price prime contracts after complete termination.

1-8.806-2 Settlement agreement for use in settling fixed-price prime contracts after partial termination. 1-8.806-3 Partial settlement agreement, for

use in settling fixed-price prime contracts after complete or partial termination where settlement pertains only to settlements with subcontractors. 1-8.806-4 Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement includes costs. 1-8.806-5 Settlement agreement for use in settling cost-reimbursement type prime contracts after complete termination where settlement is limited to fee. 1-8.806-6 No-cost settlement agreementpartial termination.

1-8.806-7 No-cost settlement agreementcomplete termination.

AUTHORITY: Sec. 205(c), 63 Stat. 390; 40 U.S.C. 486(c).

SOURCE: 29 FR 10196, July 24, 1964, unless otherwise noted.

§ 1-8.000 Scope and applicability of part. (a) This part sets forth policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default, and sets forth policies and procedures relating to the settlement

of claims arising therefrom. It includes contract clauses, with respect to termination and excusable delay, and suggested formats of notices, forms, warranties, and agreements related to the termination and settlement of contracts.

(b) This part applies to contracts which initially or by amendment provide for termination for the convenience of the Government or for the default of the contractor, whether or not the clauses in the contract with respect to termination are those set forth in Subpart 1-8.7. However, to the extent that clauses actually used in contracts are inconsistent with the provisions of this part, the provisions of the clauses actually used shall control. Where a termination for convenience clause has not been included in a contract, this part may also be used for guidance in negotiating a settlement agreement, or in making an equitable adjustment (see § 1-8.601(c)).

(c) This part also applies to the disposal of contractor inventory arising out of any modification of a cost-reimbursement type contract pursuant to the Changes clause.

(d) When the head of a procuring activity so authorizes, the provisions of this part may be utilized:

(1) In determining any equitable adjustment as a result of modification of any contract, other than a cost-reimbursement type contract, pursuant to the Changes clause;

(2) In the disposal of any property which has become obsolete or excess for any reason under a contract whenever the cost of such property is made the basis of a claim by the contractor against the Government; or

(3) In the disposal of contractor inventory generally.

Subpart 1-8.1-Definition of Terms § 1-8.101

Definitions.

As used in this part, the following terms have the meanings stated:

(a) “Amount of claim" or "amount of settlement" means that amount which (1) does not have deducted from the gross claim or settlement (i) credits for retention or other disposal of termination inventory allocated to the claim, (ii) credits for advance pay

ments, and (iii) credits for partial payments (see § 1-8.212-1); but (2) does have deducted from the gross claim or settlement (i) the amount payable for completed articles or work at the contract price, and (ii) amounts payable for the settlement or discharge of termination

claims of subcontractors. (This definition applies only when the taking of an action depends upon the amount of a termination claim or settlement; e.g., the amount which determines whether audit of a prime contract claim is required, or the amount which determines whether a settlement must be reviewed by a settlement review board.)

(b) "Common items" means materials which are common in nature to both the terminated contract and the contractor's other work.

(c) "Continued portion of the contract" means that portion of a partially terminated contract which relates to work or end items not already completed and accepted prior to the effective date of termination and which the contractor must continue to perform.

(d) "Contractor-acquired property" means property procured or otherwise provided by the contractor for the performance of a contract, whether or not the Government has title by the terms of the contract or exercises its contractual right to take title.

(e) "Contractor inventory" means (1) any property acquired by and in the possession of a contractor or subcontractor (including Government-furnished property) under a contract pursuant to the terms of which title is vested in the Government, and in excess of the amounts needed to complete full performance under the entire contract; and (2) any property which the Government is obligated to or has an option to take over under any type of contract as a result either of any changes in the specifications or plans thereunder or of the termination of such contract (or subcontract thereunder), prior to completion of the work, for the convenience or at the option of the Government.

(f) "Effective date of termination" means the date upon which the notice of termination first requires the contractor to stop performance, in whole or in part, under the contract. If, how

ever, the termination notice is received subsequent to the date fixed for termination, then the effective date of termination means the date on which the notice is received.

(g) "Government-furnished property" means property in the possession of or acquired directly by the Government, and subsequently delivered or otherwise made available to the contractor.

(h) "Government property" means all property owned by or leased to the Government or acquired by the Government under the terms of a contract; except that property to which the Government has acquired a lien or title solely as a result of partial, advance, or progress payments shall not be classified as Government property. With this exception, Government property includes (1) Government-furnished property, and (2) that part of contractor-acquired property title to which is vested in the Government.

(i) "Material" means property which may be incorporated into or attached to an end item to be delivered under a contract or which may be consumed or expended in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies which may be consumed in normal use in the performance of the contract.

(j) "Other work" means any current or scheduled work of the contractor, whether Government or commercial, other than work related to the terminated contract.

(k) "Plant clearance period" means, for each particular property classification (such as raw materials, purchased parts, and work in process) at any one plant or location, a period beginning with the effective date of the termination for convenience and ending 90 days after receipt by the contracting officer of acceptable inventory schedules covering all items of that particular property classification in the termination inventory at that plant or location, or ending on such later date as may be agreed to by the contracting officer and the contractor. Final phase of a plant clearance period means that part of a plant clearance period which occurs after the receipt of acceptable

« PreviousContinue »