ventory or total cost basis without the prior approval of the Managers of Field Offices or, in the case of Headquarters contracts, the appropriate Division Director.

Subpart 9-8.4-Additional Principles Applicable to the Settlement of Cost-Reimbursement Type Contracts Terminated for Convenience § 9-8.404-1 Submission of settlement proposal.

Contracting officers should encourage contractors to submit settlement proposals in the form set forth in FPR 1-8.802-4. When necessary, Managers of Field Offices or, in the case of Headquarters contracts, the appropriate Division Director, may authorize modification of this form. However, the certificate shall be substantially as set forth in the form.

Subpart 9-8.5-Disposition of Termination Inventory

§ 9-8.501-2 General restrictions on contractor's authority.

Contracting officers may authorize contractors to sell termination inventory to AEC and other employees of the Federal Government and employees of AEC contractors on the same basis afforded the general public, provided the employees warrant in writing that they have not:

(a) Participated in the determination to dispose of the property;

(b) Participated in preparation of the property for sale;

(c) Participated in determining the method of sale; or

(d) Acquired information not otherwise available to the general public regarding usage, conditions, quality, or value of the property. The required warranty signed by the employee concerned shall be obtained prior to making award. § 9-8.503-1 Submission of inventory schedules.

Contracting officers should encourage contractors to submit inventory schedules in the forms set forth in FPR 1-8.803. When necessary, Managers of Field Offices or, in the case of Headquarters contracts, the appropriate Division Director, may authorize modification of these forms. However, the certificate shall be substantially as set forth in the forms.

Scrap determinations shall be reviewed in accordance with § 9-8.512(a). § 9-8.504-2 Scrap warranty.

Release from liability under scrap warranties shall be reviewed in accordance with § 9-8.512(b).

§ 9-8.505 Screening of serviceable and usable property.

(a) When the contracting officer determines that application of AEC circularization requirements would result in an appreciable increase in disposal costs involving retention of personnel after the contract has been terminated, rental of storage space, or other factors, arrangements should be made locally with GSA to screen inventory schedules on an accelerated basis.

(b) Priority in the acquisition of serviceable or usable property included in contractor's inventory shall be as follows:

(1) The AEC office administering the contract,

(2) Other activities of the AEC, (3) Other agencies of the Government.

§ 9-8.507 Sale or other disposition of termination inventory.

§ 9-8.507-1 General.

(a) Any property which is included in the contractor's inventory schedules, which has not been acquired by the Government under § 9-8.505 or donated under § 9-8.508, may be acquired by the contractor or sold by the contractor to a third party, at any time after notification by the contracting officer that screening has been accomplished or will not be required. Generally, any such acquisition by the contractor or sale to a third party shall be on a competitive basis. Any acquisition or sale shall be in accordance with applicable laws and regulations. Any such acquisition or sale shall be subject to the approval of the contracting officer, as part of or prior to the final settlement.

§ 9-8.507-5 Applicability of antitrust laws.

Managers of Field Offices and Headquarters officials having the contracting responsibility shall furnish two copies of the notification referred to in FPR 1

8.507-5 to the Office of the General Counsel and one copy to the Director, Division of Contracts.

§ 9-8.507-50 Sales without competition.

(a) Sales or acquisitions by the contractor without competitive bids may be authorized by the contracting officer only in exceptional or unusual cases. Subject to the terms of the contract, such sales or acquisitions without competitive bids may be negotiated at prices that are fair and reasonable and not less than the proceeds that could reasonably be expected to be obtained if the property were offered for competitive sale at that time.

(b) Any sales made under paragraph (a) of this section shall be reviewed to the extent required by § 9-8.512. § 9-8.507-51 Extension of credit.

Contractors shall not be required to extend credit to purchasers, and any sales made by contractors on credit shall be at their own risk.

It is AEC policy to utilize the established donation procedure in the disposal of termination inventory.

§ 9-8.512 Review of property disposal.

The following property disposal actions shall be reviewed by AEC employees designated to act as property disposal reviewing authorities:

(a) Determinations that termination inventory is scrap or salvage (the nature of the review of such determinations shall depend upon the acquisition cost and location of the property involved and such other considerations as the contracting officer determines to be pertinent);

(b) Release from liability under a scrap warranty, if the original acquisition cost of the material is $10,000 or more;

Subpart 9-8.7-Clauses

§ 9-8.700-2 Applicability.

The standard clauses set forth in FPR 1-8.701 through 1-8.710 are applicable as prescribed in FPR 1-8.700-2, subject to the following:

(a) The clause set forth in FPR 1-8.702 is not required to be used in operating contracts. However, all operating contracts, regardless of whether they are for production or research and development, should contain an appropriate termination clause approved by counsel.

(b) Architect-engineer contracts should also contain an appropriate termination clause approved by counsel.

(c) Cost principles referenced in the various termination articles shall be in accordance with Part 9-15.

The following article is suggested for use in cost-plus-a-fixed-fee architectengineer contracts:

Termination-(a) Notice of termination for default or convenience. The Contracting Officer may at any time terminate performance of the work under this contract in whole or from time to time in part for the default of the contractor or for the convenience of the Government by written notice to the contractor stating the ground for termination. Such termination shall be effective in the manner and upon the date specified in said notice and shall be without prejudice to any claims which the Government may have against the contractor. Upon receipt of such notice and except as otherwise directed by the Contracting Officer, the contractor shall:

(1) Stop work under the contract on the date and to the extent specified in the notice of termination;

(2) Place no further orders or subcontracts for materials, services, or facilities, except as may be necessary for completion of such portion of the work under the contract as is not terminated; and

(3) Terminate all orders and subcontracts to the extent they relate to the performance of work terminated by the notice termination.

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(b) Termination for default. (1) If the contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in this contract, or any extension thereof, or fails to complete said work within such time, or if the contractor fails to perform any of the other

provisions of this contract, the Contracting Officer may terminate for default the contractor's right to proceed with the work or such part of the work as to which there has been delay: Provided, That the performance of the work shall not be terminated for default because of any delays in the completion of work due to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or the public enemy, acts of the Government in either its Sovereign or contractual capacity, acts of another contractor in the performance of a contract with the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays of subcontractors or suppliers arising from unforeseeable causes beyond the control and without the fault or negligence of both the contractor and subcontractors or suppliers, and if the contractor within ten (10) days from the beginning of any such delay (unless the Contracting Offcer grants a further period of time prior to the date of final settlement of the contract) notifies the Contracting Officer in writing of the causes of delay. The Contracting Officer ahall ascertain the facts and the extent of the delay and extend the time for completing the work when in his judgment the findings of fact justify such an extension, and his Andings of fact thereon shall be final and conclustre on the parties hereto, subject only to appeal by the contractor to the Commisston in accordance with Article ------ hereof entitled "Disputes."

(2) If, after notice of termination of this contract for default under (1) above, it is determined for any reason that the contracfor was not in default pursuant to (1), or that the contractors failure to perform or to make prograss in performance is due to Anse berond the control and without the fault or negligence of the contractor pursuant to the provisions of this clause relating

@tessable delays, the notice of termination *hall be deemed to hare deen issued for the convenience of the dornment under the clause, and the rights and obligations or the parts harene shall in such erent de

may have theretofore in good faith undertaken or incurred in connection with the terminated work, the cost of which would be allowable in accordance with the provisions of this contract; and the contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers and take all such steps as the Contracting Officer may require for the purpose of fully vesting in the Government all the rights and benefits of the contractor, related to such obligations, commitments, and claims.

(2) Payment for allowable costs. The Government shall treat as allowable costs all expenditures made in accordance with Artihereof entitled "Allowance costs and fixed fee" not previously so allowed or otherwise credited.

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(3) Payment for termination expense. If performance of work under the contract is terminated for the convenience of the Government, the Government shall reimburse the contractor for such further expenditures made after the date of termination for the protection of Government property and for such legal and accounting services in connection with settlement as are required or approved by the Contracting Officer.

(4) Payments on account of fixed fee. If performance of work under the contract is terminated for the convenience of the Government, the contractor shall be paid that portion of the fixed fee which the work actually completed so determined by the Contracting Officer, bears to the entire work under this contract less payments previously made on account of the fee. If performance of the work under the contract is terminated for the default of the contractor, no further payment on account of the fixed fee shall

sccrue.

(5) Computation of amount due. In arriving at the amount, if any, due the contractor under this clause, there shall be deducted from what would otherwise be due (1) all unliquidated advances and all other unliquidated payments on sccount theretofore made to the contractor, (11) any claims of the Government against the contractor in connection with this contract, and (iii) all deductions due under the terms of this contract and not otherwise recovered by or credited to the Government.

($) Disposition of advances. Upon termination of the work under this contract, any SÖTADOS UNDEr this contract shall be handled ss required by Krmjole ------ "Payments and

Property accounting and relause. The portracker shall furnish the sccounting for Gorgenmant-owned property required by the clause arutled "Property" and the assignment, alasing financial statement, and release spurred by the alsuse entitled "Payments

@Runs and remačus of the Government. The rights and remedies of the Governmant povided in the clause are in addition

to any other rights and remedies provided by law or under this contract.

NOTE: Paragraph (d) (7) as set forth above should be used in contracts where funds are advanced by the AEC. For contracts where funds are not advanced, delete the requirements for a closing financial statement and change the article reference from "Payments and Advances" to "Payments" and omit paragraph (d) (6) as set forth above. § 9-8.752 [Reserved]

§ 9-8.753

Termination article for operating contracts.

The following article is suggested for use in operating contracts:

(a) This contract shall continue until unless sooner terminated in accordance with the provisions which follow:

(1) The performance of work under this contract may be terminated by the Commission in whole, or from time to time in part, (1) whenever the contractor shall default in performance, and shall fail to cure the fault or failure within such period as the Commission may allow after receipt from the Commission of a notice specifying the fault or failure, or (ii) whenever for any reason the Commission shall determine any such termination is for the best interest of the Government. Termination of the work hereunder shall be effected by delivery of 8 notice of termination specifying whether termination is for default of the contractor or for the convenience of the Government, the extent to which performance of work under the contract shall be terminated, and the date upon which such termination shall become effective. Any such termination shall be without prejudice to any claim which either party may have against the other. If, after notice of termination under the provisions of paragraph (a)(1) (1) above, it is determined for any reason that the contractor was not in default, such notice of default shall be deemed to have been issued pursuant to paragraph (a) (1) (11) above, and the rights and obligations of the parties hereto shall in such event be governed accordingly.

(2) Upon receipt of notice of termination, in accordance with paragraph (1) above, the contractor shall, to the extent directed in writing by the Commission, discontinue the terminated work and the placing of orders for materials, facilities, supplies, and services in connection therewith, and shall proceed, if, and to the extent required by the Commission, to cancel promptly, and settle with the approval of the Commission, exist< ing orders, subcontracts, and commitments insofar as such orders, subcontracts, and commitments pertain to this contract.

(b) Upon the termination of this contract, full and complete settlement of all claims of the contractor and of the Commission arising out of this contract shall be made as follows:

(1) The Government shall have the right in its discretion to assume sole responsibility for any or all obligations, commitments, and claims that the contractor may have undertaken or incurred, the cost of which are allowable in accordance with the provisions of this contract; and the contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers and take all such steps as the Commission may require for the purpose of fully vesting in the Government any rights and benefits the contractor may have under or in connection with such obligations, commitments, or claims.

(2) The Government shall treat as allowable costs all expenditures made in accordance with and allowable under the article entitled "Allowable Costs and Fixed Fee," not previously so allowed or otherwise credited for work performed prior to the effective date of termination, together with expenditures as may be incurred for a reasonable time thereafter with the approval of, or as directed by, the Contracting Officer.

(3) The Government shall treat as allowable costs, to the extent not included in (b) (2) above, the costs of settling and paying claims arising out of the termination of work under orders, subcontracts, and commitments as provided in paragraph (a) (2) above.

(4) The Government shall treat as allowable costs the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reasonably necessary for the preparation of settlement claims and supporting data with respect to the termination of the contract and for the termination and settlement of orders and subcontracts thereunder, together with such further expenditures made by the contractor after the date of termination for the protection or disposition of Government property as are approved or required by the Commission: Provided, however, That if the termination is for default of the contractor, there shall not be included any amount for preparation of the contractor's settlement proposal.

(5) If performance of work under this contract is terminated in whole by the Government, the fixed fee of the contractor shall be prorated to and including the effective date of such termination. In addition, if the termination is for the convenience of the Government, the contractor shall be paid a fixed fee in an amount to be agreed upon as compensation for its services in closing out the work under this contract after the effective date of such termination.

The additional fixed fee is to be negotiated as soon as practicable after service of notice of termination, shall take into account the estimate of the cost of the services and managerial effort to be rendered under this article after the effective date of termination, and shall be provided for in a supplement or amendment to this contract prior to final settlement hereunder. Pending agreement as to the amount of such fee, the contractor

provisions of this contract, the Contracting Officer may terminate for default the contractor's right to proceed with the work or such part of the work as to which there has been delay: Provided, That the performance of the work shall not be terminated for default because of any delays in the completion of work due to unforeseeable causes beyond the control and without the fault or negligence of the contractor, including, but not restricted to, acts of God, or the public enemy, acts of the Government in either its sovereign or contractual capacity, acts of another contractor in the performance of a contract with the Government, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather or delays of subcontractors or suppliers arising from unforeseeable causes beyond the control and without the fault or negligence of both the contractor and subcontractors or suppliers, and if the contractor within ten (10) days from the beginning of any such delay (unless the Contracting Officer grants a further period of time prior to the date of final settlement of the contract) notifies the Contracting Officer in writing of the causes of delay. The Contracting Officer shall ascertain the facts and the extent of the delay and extend the time for completing the work when in his judgment the findings of fact justify such an extension, and his findings of fact thereon shall be final and conclusive on the parties hereto, subject only to appeal by the contractor to the Commission in accordance with Article hereof entitled "Disputes."

(2) If, after notice of termination of this contract for default under (1) above, it is determined for any reason that the contractor was not in default pursuant to (1), or that the contractor's failure to perform or to make progress in performance is due to causes beyond the control and without the fault or negligence of the contractor pursuant to the provisions of this clause relating to excusable delays, the notice of termination shall be deemed to have been issued for the convenience of the Government under this clause, and the rights and obligations of the parties hereto shall in such event be governed accordingly.

(c) Liability for costs on default. If performance of the work under this contract is terminated for the default of the contractor, the Government may complete or employ any other person or persons to complete the work, and the contractor shall be liable to the Government for increased costs occasioned the Government by the default.

(d) Terms of settlement. Upon the termination of performance of work under this contract, full and complete settlement of all claims of the contractor with respect to the terminated work shall be made as follows:

(1) Assumption of contractor's obligations. The Government shall have the right in its discretion to assume all obligations, commitments, and claims that the contractor

may have theretofore in good faith undertaken or incurred in connection with the terminated work, the cost of which would be allowable in accordance with the provisions of this contract; and the contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers and take all such steps as the Contracting Officer may require for the purpose of fully vesting in the Government all the rights and benefits of the contractor, related to such obligations, commitments, and claims.

(2) Payment for allowable costs. The Government shall treat as allowable costs all expenditures made in accordance with Article hereof entitled "Allowance costs and fixed fee" not previously so allowed or otherwise credited.

(3) Payment for termination expense. If performance of work under the contract is terminated for the convenience of the Government, the Government shall reimburse the contractor for such further expenditures made after the date of termination for the protection of Government property and for such legal and accounting services in connection with settlement as are required or approved by the Contracting Officer.

(4) Payments on account of fixed fee. I performance of work under the contract is terminated for the convenience of the Government, the contractor shall be paid that portion of the fixed fee which the work actually completed so determined by the Contracting Officer, bears to the entire work under this contract less payments previously made on account of the fee. If performance of the work under the contract is terminated for the default of the contractor, no further payment on account of the fixed fee shall

accrue.

(5) Computation of amount due. In arriving at the amount, if any, due the contractor under this clause, there shall be deducted from what would otherwise be due (1) all unliquidated advances and all other unliquidated payments on account theretofore made to the contractor, (ii) any claims of the Government against the contractor in connection with this contract, and (111) all deductions due under the terms of this contract and not otherwise recovered by or credited to the Government.

(6) Disposition of advances. Upon termination of the work under this contract, any advance under this contract shall be handled as required by Article "Payments and Advances."

(7) Property accounting and release. The contractor shall furnish the accounting for Government-owned property required by the clause entitled "Property" and the assignment, closing financial statement, and release required by the clause entitled "Payments and Advances."

(e) Rights and remedies of the Government. The rights and remedies of the Government provided in this clause are in addition