on any termination inventory other than termination inventory you propose and are authorized to purchase, retain, or dispose of. (The Contracting Officer shall also be promptly notified of any such proceedings brought after receipt of this Notice.)

(f) You shall take such other action as may be required by the Contracting Officer or under the termination clause contained in your contract.

(3) Termination inventory. In connection with settlement of your claim, it will be necessary to establish that all your termination inventory and that of your subcontractors has been properly accounted for. For detailed information, see 32 CFR Part 8, Subpart F.

4. Completed end items. Subject to 32 CFR 8.306, you will invoice acceptable completed end items under the contract in the usual way and not include them in your settlement proposal.

5. Submission of settlement proposal. To assist you in prompt submission of your settlement proposal, there is enclosed one set of the standard forms.

6. Patents. Your attention is called to any provisions of the contract which may require you to make a disclosure of, and to deliver to the Government instruments of license or assignment respecting all inventions, discoveries, and patent applications made by you in the performance of the contract. You are urged to forward such disclosures and instruments of license or assignment to the Contracting Officer promptly, inasmuch as these contractual obligations must be complied with before execution of the final settlement agreement. This paragraph may be disregarded if the contract contains no such patent provisions. 7. Settlements with subcontractors. remain liable to your subcontractors and suppliers for claims arising by reason of the termination of their subcontracts or orders. You are requested to settle such termination claims as promptly as possible. For purposes of reimbursement by the Government, such settlements will be governed by the provisions of 32 CFR Part 8.

You

8. Employees Affected. (a) If this termination, together with all other outstanding terminations, will necessitate a significant reduction in your work force, as described in (b) below, you are urged to (1) Promptly inform the local State Employment Service of your reduction-in-force schedule in numbers and occupations, so that they can take timely action in assisting displaced workers; (2) give affected employees maximum practical advance notice of the employment reduction, and inform them of the facilities and services available to them through the local State Employment Service Offices; (3) advise affected employees to file applications with State Employment Service in order to qualify for unemployment insurance, if necessary; (4) inform officials of local unions

having agreements with you of the impending reduction-in-force; and (5) inform local Chamber of Commerce and other appropriate organizations, which are prepared to offer practical assistance in finding employment for displaced workers, of impending reduction-in-force.

(b) Normally, a reduction of 200 or more workers during any one month of the period of the reduction-in-force will be considered significant. However, a reduction of a lesser number of workers in any one month, or in several successive months, also may have a serious adverse impact in a small community affected by other layoffs.

(c) To the extent appropriate and practicable, you are requested to urge subcontractors, if any, to take actions similar to those described above.

9. The Officer named below will be in charge of the settlement of your claim. As to any matters not covered by this Notice, you should consult the Office named below.

10. Please acknowledge receipt of the Notice as shown below. Enclosures.

shall stop all work, and place no further orders in connection with the contract, except (1) to the extent necessary to perform any portion thereof not terminated by this notice or (2) to the extent necessary to perform any work directed by the contracting officer.

(b) You shall give notice of termination to each of your immediate subcontractors and suppliers who will be affected by the termination of your contract. In such notice you shall (1) give him the number of your contract with the Government (2) state that it has been terminated for the convenlence of the Government and the extent thereof, (3) give him the name and address of the contracting officer, (4) instruct him to stop all work, to place no more orders and to terminate all subcontracts under this contract with you (subject to the same exceptions stated in 2(a) above), (5) direct him to submit his settlement proposal promptly in order to expedite settlement, and (6) request him to give similar notice and instructions to his immediate subcontractors.

(c) You shall forthwith transfer title to and deliver to the Government, in accordance with any instructions of the contracting officer, all items of termination inventory (including subcontractor termination inventory which under the terms of the subcontract or purchase order concerned you have the right to take over) of the following types or classes [insert proper identification or "none"].

(d) You shall notify the Contracting Offcer of any pending or subsequent legal proceedings which relate to any subcontracts or purchase orders under the terminated contract.

(e) You shall take such other action as may be required by the Contracting Officer or under the termination clause contained in your contract.

3. Termination inventory. In connection with settlement of your claim it will be necessary to establish that all your termination inventory and that of your subcontractors has been properly accounted for.

4. Submission of settlement proposal. To assist you in prompt submission of your settlement proposal, there is inclosed a supply of the standard forms.

5. Settlements with subcontractors. You remain liable to your subcontractors and suppliers for claims arising by reason of the termination of their subcontracts or orders. You are requested to settle such termination claims as promptly as possible. For purposes of reimbursement by the Government, such settlements will be governed by the applicable provisions of the Armed Services Procurement Regulation.

6. The office named below will be in charge of the settlement of your claim. As to any matters not covered by this Notice, you should consult the office named below.

7. Please acknowledge receipt of this Notice as shown below.

1. Effective date of termination. You are notified that your Contract No. ing

cover

is hereby terminated [in part] for the convenience of the Government in accordance with the clause hereof entitled "Termination for the Convenience of the Government." Such termination will be effective immediately upon receipt of this notice.

2. Cessation of work. You shall stop all work under the contract except (1) to the extent necessary to perform any portion thereof not terminated by this notice or (2) to the extent necessary to perform any work directed by the contracting officer.

3. Submission of settlement proposal. To assist you in the prompt submission of your settlement proposal, there is inclosed a supply of the standard form.

4. The office named below will be in charge of the settlement of your claim. As to any matters not covered by this Notice, you should consult the office named below.

5. Please acknowledge receipt of this Notice as shown below.

(Contracting Officer)
(Name of Office)
(Address)

Acknowledgment of Notice

The undersigned hereby acknowledges receipt of a signed copy of the foregoing Notice

on

(Architect-Engineer)

By

§ 8.802-3

DD Form 831-Settlement

Proposal-Short Form.

See F-200.831.

[28 F.R. 4890, May 16, 1963]

§ 8.802-4 DD Form 542-Inventory Schedule A-Metals in Mill Product Form and DD Form 542c-Inventory Schedule A-Continuation Sheet.

See F-200.542 and F-200.542c. [28 F.R. 4890, May 16, 1963]

§ 8.802-5 DD Form 543-Inventory Schedule B-Raw Materials and DD Form 543c, Inventory Schedule BContinuation Sheet.

See F-200.543 and F-200.543c. [28 F.R. 4890, May 16, 1963]

See F-200.544 and F-200.544c. [28 F.R. 4890, May 16, 1963]

§ 8.802-7 DD Form 545-Inventory Schedule D-Dies, Jigs, Fixtures, etc., and Special Tools; and DD Form 545c-Inventory Schedule D, Continuation Sheet.

See F-200.545 and F-200.545c. [28 F.R. 4890, May 16, 1963]

§ 8.802-8 DD Form 832-Inventory Schedule E-Short Form for Use With DD Form 831 Only.

§ 8.803

DD Form 547-Settlement Proposal for Cost-Reimbursement Type Contracts.

DD Form 547 is to be used by prime contractors submitting termination claims on cost-reimbursement type contracts. It is also suitable for use in connection with terminated cost-reimbursement type subcontracts. See F200.547.

[28 F.R. 4891, May 16, 1963] § 8.804 DD Form 547s-Notice of Audit Status Date.

DD Form 547s is for use by disbursing officers in accordance with § 8.404-6. See also F-200.547s.

[28 F.R. 4891, May 16, 1963]

§ 8.805 Scrap warranty.

A warranty in the general format set forth below shall be executed by a purchaser of material as scrap (on direct purchase from the Government or on subsequent resale) in accordance with the requirements of § 8.504.

SCRAP WARRANTY (JAN. 1952)

In consideration of the transfer to the undersigned of the property covered by this Agreement at a value based upon its being used as scrap, the undersigned represents and warrants to the United States as follows:

(1) The property covered by this Agreement will be used only as scrap, either in Its existing condition or after further preparation, unless and until the undersigned is released from this warranty.

(2) In the event the undersigned is released from this warranty, any payment agreed on as consideration for such release shall be made to the United States, regardless of whether this warranty shall have been executed at the request of the United States. (3) In the event the undersigned sells the property covered by this Agreement prior to release of this warranty, the undersigned will obtain from the purchaser and tender to the United States a warranty identical to this executed by the purchaser, and upon receipt of such other warranty, this warranty will be released by the United States.

(4) All obligations of the undersigned under this warranty shall expire five years from the date hereof.

§ 8.806 Forms of Settlement Agreement. (See § 8.209.)

[25 F. R. 14236, Dec. 31, 1960]

§ 8.806-1 Settlement

Agreement for Use in Settling Fixed-Price Prime Contracts after Complete Termination. (Sept. 1958)

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

(1) A corporation organized and existing under the Laws of the State of

(11) A partnership consisting of... (ii) 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 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 interests of the Government, and that the Contractor and the 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, as used herein the following terms shall have the meanings hereinafter set forth:

The term "termination inventory" means any items of physical property purchased, supplied, manufactured, furnished, or otherwise acquired for performance of the contract which are properly allocable to the terminated portion of the contract, but shall not include any facilities, materials, production or other equipment, or special tooling, which are subject to a separate contract or a special contract provision governing the use or disposition thereof. Termination inventory may include Government-furnished property and contractor-acquired property. as defined below.

(1) Government-furnished property is property in the possession of or acquired directly by the Government, and delivered or otherwise made available to the Contractor.

(11) Contractor-acquired property is 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.

The term "subcontract" means any contract as defined in 32 CFR 1.201-4 other than a prime contract, entered into by a prime contractor or a subcontractor, calling for supplies or services required for the performance of any one or more prime contracts.

The term "scrap" means property that has no reasonable prospect of being sold except for the recovery value of its basic material content.

Now, therefore, the parties hereto do mutually agree as follows:

ARTICLE 1. The Contractor certifies that all contract termination inventory (including scrap) has been retained or otherwise acquired by it, sold to third parties, returned to suppliers, stored for the Government, delivered to the Government, otherwise properly accounted for, and all proceeds or retention prices thereof, if any, have been taken into account in arriving at this agreement.

ART. 2. a. The Contractor certifies that, prior to the execution of this agreement, each of the Contractor's immediate subcontractors whose claim is included in the claim settled by this agreement has furnished to the Contractor a certificate stating (1) that all of its subcontract termination inventory (including scrap) has been retained or otherwise acquired by it, sold to third parties, returned to suppliers, stored for the Government, delivered to the Government, or otherwise properly accounted for, and all proceeds or retention prices thereof, if any, were taken into account in arriving at the settlement of the subcontract or subcontracts, and (ii) that the subcontractor has received from each of the immediate subcontractors whose claim was included in its claim for a substantially similar certificate.

b. The Contractor hereby transfers and conveys to the Government all the right, title, and interest, if any, which the Contractor has received, or is entitled to receive, in and to subcontract termination inventory, if any, not otherwise properly accounted for, and hereby assigns to the Government any and all of its rights relating thereto.

ART. 3. The Contractor certifies that, with respect to all items of termination inventory the costs of which were taken into account in arriving at the amount of this settlement, or in the settlement of any subcontract claim included in this settlement: (1) all such items are properly allocable to the terminated portion of the contract; (11) such items are not in excess of the reasonable quantitative requirements of the terminated portion of the contract; (ii) such items do not include any items reasonably usable without loss to the Contractor, on its other work; and (iv) the Contractor has informed the Contracting Officer of any substantial change in the status of such items between the dates of its termination inventory schedules and the date of this agreement.

ART. 4. In all cases where the Contractor has not previously made such payments, the Contractor shall, within ten (10) days after receipt of the payment provided for hereunder, pay to each of its immediate subcontractors (or to their respective assignees) the respective amounts to which they are entitled, after deducting, if the Contractor so elects, any amounts then due and payable to the Contractor by such subcontractors.

ART. 5. a. The Contractor has received the sum of $------ on account of work and services performed, or articles delivered, under the completed portion of the contract. The Government as part of this negotiated settlement hereby confirms and acknowledges the right of the Contractor, subject to the provisions of Article 6 hereof, to retain such sum heretofore paid and agrees that such sum constitutes a portion of the total amount to which the Contractor is entitled in settlement of the Contract.

b. In addition, upon execution of this agreement the Government agrees to pay to the Contractor or its assignee, upon presen

tation of properly certified invoices or vouchers, the sum of $------ [insert net amount of settlement], arrived at by deducting from the sum of $------ [for claim submitted on inventory basis, insert gross amount of settlement; for claim submitted on total cost basis, insert gross amount of settlement less amount set forth in 5a above], (1) the amount of $------ representing all unliquidated partial or progress payments previously made on account to the Contractor or its assignee and all unliquidated advance payments (with interest, if any, thereon), and (2) the amount of representing all applicable property disposal credits [and (3) the amount of $----- representing all other amounts due the Government under this contract except as hereinafter provided in Article 6].* Said sum, together with all other sums heretofore paid, constitutes payment in full and complete settlement of the amount due the Contractor by reason of the complete termination of work under the contract and of all other claims and liabilities of the Contractor and the Government under the contract, except as hereinafter provided in Article 6.

ART. 6. 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 32 CFR 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.]

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

(2) All rights and liabilities of the parties arising under the contract articles, if any, or otherwise which relate to reproduction rights, patent infringements, inventions, 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 lisbilities under any such bond.

(3) All rights of the Government to take the benefit of any adjustments of royalties To be inserted where appropriate.