Subpart 9-50.8 Termination of Contracts

§9-50.800 Scope and applicability of subpart.

The policies and procedures of FPR Part 1–8 and Part 9–8 shall be applied to the termination and settlement of subcontracts by operating and on-site service contractors.

§9-50.801 Clause.

The clause set forth in FPR 1-8.702 is not required to be used in operating and on-site contracts. However, all operating and on-site contracts, regardless of whether they are for production, research and development, or services, should contain an appropriate termination clause approved by Counsel. The following is suggested for use in operating contracts:

(a) This contract shall continue until accordance with the provisions which follow:

unless sooner terminated in

(1) The performance of work under this contract may be terminated by the Government in whole, or from time to time in part, (i) whenever the contractor shall default in performance, and shall fail to cure the fault or failure within such period as the Contracting Officer may allow after receipt from the Contracting Officer of a notice specifying the fault or failure, or (ii) whenever, for any reason, the Contracting Officer shall determine any such termination is for the best interest of the Government. Termination of the work hereunder shall be effected by delivery of a 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 (a)(1)(i) 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 (a)(1)(ii) 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 (1) above, the contractor shall, to the extent directed in writing by the Contracting Officer, 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 Contracting Officer, to cancel promptly and settle with the approval of the Contracting Officer, existing 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 DOE 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 metioned 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 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 expeditures 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 (a)(2) above.

(4) The Government shall treat as allowable costs the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reasonably

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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 Contracting Officer; 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 shall diligently proceed with the performance of the services required under this article. No additional fee will be paid if the contract is terminated due to the default of the contractor. In the event of a partial termination by the Government, an equitable adjustment shall be made in the fixed fee if such termination results in a material decrease in the level of the contractor's management effort. Any failure to agree on the right to or the amount of any adjustment shall be deemed a dispute within the purview of the article hereof entitled “Disputes."

(6) The obligation of the Government to make any of the payments required by this article or any other provisions of this contract shall be subject to any unsettled claims in connection with this contract which the Government may have against the contractor.

(c) Prior to final settlement, the contractor shall furnish a release as required in the article entitled “Payments and Advances" hereof and such accounting for Government-owned property as may be required by the Contracting Officer: provided however, that unless the Contracting Officer requires an inventory, the maintenance and disposition of records of Government-owned property in accordance with the article entitled "Accounts, Records and Inspection" hereof, shall be accepted by the Contracting Officer as full compliance with all requirements of this contract pertaining to an accounting for such property.

Subpart 9-50.9 Patents, Data, and Copyrights

89-50.900 Scope of subpart.

This subpart sets forth policies, procedures, and contract clauses with respect to inventions made, conceived, or utilized in the course of or under any contracts, or other arrangements entered into, with or for the benefit of DOE. In addition, this subpart sets forth DOE's policies, procedures, and contract clauses with respect to the acquisition and use of technical data and copyrights in contracts or subcontracts entered into, with or for the benefit of the Government.

89-50.901 General policy.

With respect to patents, it is noted that subpart 9-9.1 applies hereto, with the exception that the short form Patent Rights clause in §9-9.107-6 will not be used in contracts calling for the operation of Government-owned facilities. Also, the provisions of §9–9.109—6(h) pertaining to "waivers to educational institutions" do not apply to this subpart. In the case of Subpart 9-9.2, all of the material contained therein is also applicable hereto, either with respect to prime contracts or subcontracts thereunder.

$9-50.902 Negotiations and deviations.

Contracting Officers shall contact the field Patent Counsel assisting their procuring activity, or the Assistant General Counsel for Patents, for assistance to the Contracting Officer in selecting, negotiating, or approving appropriate patent, data, and copyright clauses in accordance with the procedures as set forth in §9-9.107–4 (k) and §9-9.202-5.

Subpart 9-50.10 Bonds and Insurance

§9-50.1000 Scope of subpart.

Policies and procedures of FPR Part 1-10, shall be applied to procurements by operating and on-site service contractors, except that the provisions of FPR 1-10.104-1 and 1-10.105-1 shall be applied only to construction subcontracts.

§9-50.1001 Bid guarantees.

A bid guarantee may be required for a lump sum or a unit price construction subcontract under an operating contract when the subcontract is entered into under procedures similar to formal advertising.

$9-50.1002 Performance bonds.

Performance bonds shall not be furnished at Government expense in connection with DOE operating and on-site contracts and cost-reimbursement type subcontracts thereunder including construction.

§9-50.1002-1 Construction contracts (Lump sum and unit price).

A performance bond on Standard Form 25 (modified to name the operating or on-site service contractor as well as the United States of America as obligees) shall be required for all lump sum and unit price construction subcontracts in excess of $25,000 where the subcontracts are under operating or on-site service contracts (or under cost-reimbursement type subcontracts under those operating or on-site service contracts). The penal amounts should be as set forth in FPR 1– 10.104-1(b).

§9-50.1002-2 Other than construction contracts.

Situations in addition to those listed in FPR 1-10.104-2(b) which may warrant requiring a performance bond are:

(a) Where doubt exists as to the financial or technical ability of all possible suppliers.

(b) Where the contractor's talent is overly concentrated in a few key personnel whose illness or departure could seriously impair the contractor's ability to perform the proposed work.

(c) Where other commitments of the contractor might delay performance.

(d) Where performance of the proposed work might disrupt other operations of the contractor and impair its overall efficiency; or

(e) Where the item being manufactured is a component for another article and is required by a particular date in order to avoid delay in delivery of the end product.

§9-50.1003 Payment bonds.

Payment bonds shall not be furnished at Government expense in connection with operating and on-site service contracts and cost-reimbursement type subcontracts including construction.

§9-50.1003-1 Construction contracts (Lump sum and unit price).

A payment bond on Standard Form 25A modified to name the operating contractor (as well as the United States of America as obligees) shall be required for all lump sum and unit price construction subcontracts in excess of $25,000 where the subcontracts are under operating and on-site service contracts (or under cost-reimbursement type subcontracts under operating and onsite contracts). The penal amounts should be as set forth in FPR 1-10.105–1(b).

§9-50.1003-2 Other than construction contracts.

Determinations that it is in the best interest of the Government to require payment bonds in