service approval with pre-determined review date(s); (2) The contracting officer determines that the U.S.-flag carrier has proposed to the Government freight charges that are higher than charges to private persons for transportation of like goods, and obtains the approval of the Commander, MSC, or the Commander, MTMC; or (3) The Secretary of the Navy or the Secretary of the Army determines that the proposed freight charges for U.S.flag vessels are excessive or otherwise unreasonable. (i) After considering the factors in 247.572-1(d)(3)(i)(A) and (B), if the contracting officer concludes that the freight charges proposed by U.S.-flag carriers may be excessive or otherwise unreasonable, the contracting officer must prepare a report in determination and finding format that includes, as appropriate― (A) An analysis of the carrier's costs in accordance with FAR Subpart 15.4, or profit in accordance with 215.404-4. The costs or profit should not be so high as to make it unreasonable to apply the preference for U.S.-flag vessels; (B) A description of efforts taken pursuant to FAR 15.405, to negotiate a reasonable price. For the purpose of FAR 15.405(d), this report is the referral to a level above the contracting officer; and (C) An analysis of whether the costs are excessive (i.e., costs beyond the economic penalty normally incurred by excluding foreign competition), taking into consideration factors such those listed at 247.572-1(d)(3)(i)(C). as (ii) The contracting officer must forward the report to (A) The commander, MSC, through the Contracts and Business Management Directorate, MSC; or (B) The Commander, MTMC, through the Principal Assistant Responsible for Contracting, MTMC. (iii) If an agreement with the contracting officer, the Commander, MSC, or the Commander, MTMC, will forward the report to the Secretary of the Navy or the Secretary of the Army, respectively, for a determination as to whether the proposed freight charges are excessive or otherwise unreasonable. [65 FR 50147, Aug. 17, 2000] 247.573 Solicitation provision and contract clauses. (a) Use the provision at 252.247-7022, Representation of Extent of Transportation by Sea, in all solicitations except (1) Those for direct purchase of ocean transportation services; or (2) Those with an anticipated value at or below the simplified acquisition threshold. (b)(1) Use the clause at 252.247-7023, Transportation of Supplies by Sea, in all solicitations and resultant contracts, except those for direct purchase of ocean transportation services. (2) Use the clause with its Alternate I in other than construction contracts, if any of the supplies to be transported are commercial items that are shipped in direct support of U.S. military contingency operations, exercises, or forces deployed in humanitarian or peacekeeping operations. (3) Use the clause with its Alternate II in other than construction contracts, if any of the supplies to be transported are commercial items that are commissary or exchange cargoes transported outside of the Defense Transportation System in accordance with 10 U.S.C. 2643. (4) Use the clause with its Alternate III in solicitations and contracts with an anticipated value at or below the simplified acquisition threshold. (c) Use the clause at 252.247-7024, Notification of Transportation of Supplies by Sea, in all contracts for which the offeror made a negative response to the inquiry in the provision at 252.247-7022, Representation of Extent of Transportation by Sea. (d) Use the clause at 252.247-7025, Reflagging or Repair Work, in all time charter solicitations and contracts for the use of a vessel for the transportation of supplies, unless a waiver has been granted in accordance with 247.571(c). [56 FR 36466, July 31, 1991, as amended at 59 FR 10580, Mar. 7, 1994; 60 FR 29501, June 5, 1995; 64 FR 2598, Jan. 15, 1999; 65 FR 14401. Mar. 16, 2000; 67 FR 38021, May 31, 2002] reports must be submitted within 30 days after the end of the reporting period; and (iv) Submit a final report within 30 days after closing the termination case. [56 FR 36471, July 31, 1991, as amended at 59 FR 27674, May 27, 1994; 64 FR 51077, Sept. 21, 1999; 65 FR 39706, June 27, 2000] 249.105-2 Release of excess funds. The DD Form 1598, Contract Termination Status Report, may be used to recommend the release of excess funds. The final recommendation to release excess funds should include the appropriations and allocated amounts. 249.106 Fraud or other criminal conduct. If the TCO suspects fraud or other criminal conduct, the TCO must report the facts in accordance with the procedures at 209.406-3 or 209.407-3. [64 FR 62986, Nov. 18, 1999] 249.108 Settlement of subcontract settlement proposals. 249.108-4 Authorization for subcontract settlements without approval or ratification. (a)(1)(ii) Industrial plant equipment included in the inventory (1) Is subject to the screening requirements in FAR 45.608. (2) Shall not be disposed of until screening is completed when the cost of that equipment is used in determining the amount of the claim. 249.109 Settlement agreements. 249.109-7 Settlement by determination. (a)(i) Use a Standard Form 30 (SF 30), Amendment of Solicitation/Modification of Contract, to settle a convenience termination by determination— (A) When the contractor has lost its right of appeal because it failed to submit a timely settlement proposal; and (B) To confirm the determination when the contractor does not appeal the termination contracting officer's decision. (ii) The effective date of the SF 30 shall be the same as the date of the letter of determination. Do not assign a 1. Identification. (Identify memorandum as to its purpose and content.) a. Name and address of the contractor. Comment on any pertinent affiliation between prime and subcontractors relative to the overall settlement. b. Names and titles of both contractor and Government personnel who participated in the negotiation. 2. Description of terminated contract. a. Date of contract and contract number. b. Type of contract (e.g., fixed price, fixed price incentive). c. General description of contract items. d. Total contract price. e. Furnish reference to the contract termination clauses (cite FAR/DFARS designation or other special provisions). 3. Termination notice. a. Reference termination notice and state effective date of termination. b. Scope and nature of termination (complete or partial), items terminated, unit price and total price of items terminated. c. State whether termination notice was amended, and explain any amendment. d. State whether contractor stopped work on effective termination date. If not, furnish details. e. State whether the contractor promptly terminated subcontracts. f. Statement as to the diversion of common items and return of goods to suppliers, if any. g. Furnish information as to contract performance and timeliness of deliveries by the contractor. 4. Contractor's settlement proposal. a. Date and amount. Indicate date and location where claim was filed. State gross amount of claim. (If interim settlement proposals were filed, furnished information for each claim.) b. Basis of claim. State whether claim was filed on inventory, total cost or other basis. Explain rationale for approval when claim is filed on other than inventory basis. c. Examination of proposal. State type of reviews made and by whom (audit, engineering, legal, or other). Part II-Summary of Contractor's Claim and Negotiated Settlement 1. Contractor's cost. Part III-Discussion of Settlement a. If the settlement was negotiated on the basis of individual items, specify the factors and consideration for each item. b. In the case of a lump sum settlement, comment on the general basis for and major factors concerning each element of cost and profit included. c. Comment on any important adjustments made to costs claimed or any significant amounts in relation to the total claim. d. If a partial termination is involved, state whether the contractor has requested an equitable adjustment in the price of the continued portion of the contract. e. Comment on any unadjusted contractual changes which are included in the settlement. f. Comment on whether or not a loss would have been incurred and explain adjustment for loss, if any. g. Furnish other information believed helpful to any reviewing authority in understanding the recommended settlement. 2. Profit. Explain the basis and factors considered in arriving at a fair profit. 3. Settlement expenses. Comment on and summarize those expenses not included in the audit review. 4. Subcontractor's settlements. Include the number of no costs settlements, settlements concluded by the contractor under delegation of authority and those approved by the termination contracting officer, as well as the net amount of each. 5. Partial payments. Furnish the total amount of partial payments, if any. 6. Progress or advance payments. Furnish the total of unliquidated amounts, if any. 7. Claims of the Government against the contractor included in settlement agreement reservations. List all outstanding claims, if any, which the Government has against the contractor in connection with the terminated contract or terminated portion of the contract. 8. Assignments. List any assignments, giving name and address of assignee. 9. Disposal credits. Furnish information as to applicable disposal credits and give dollar amounts of all disposal credits. 10. Plant clearance. State whether plant clearance action has been completed and all inventory sold, retained, or otherwise properly disposed of in accordance with applicable plant clearance regulations. Comment on any unusual matters pertaining to plant clearances. Attach consolidated closing plant clearance report. 11. Government property. State whether all Government property has been accounted for. 12. Special tooling. If involved, furnish comment on disposition. 13. Summary of settlement. Summarize the settlement in tabular form substantially as follows: 14. Exclusions. Describe any proposed reservation of rights to the Government or to the contractor. 15. Include statement that the settlement is fair and reasonable for the Government and the contractor. The contracting officer shall sign and date the memorandum. (End of memorandum) TABLE 49-2-SETTLEMENT MEMORANDUM FOR COST-REIMBURSEMENT CONTRACTS Part II Summary of Settlement 1. Summary. Summarize the proposed settlement in tabular form substantially as shown in Tables 49-3 and 49-4. Partial settlements may be summarized on Table 49-4. 2. Comments. Explain tabular summaries. a. Summary of final settlement (see Table 49-3). (1) Explain why the auditor's final report was not available for consideration, if applicable. (2) Explain how the fixed fee was adjusted. Identify basis used such as percentage of completion. Include a description of factors considered and how they were considered. Include any tabular summaries and breakdowns deemed helpful to an understanding of the process. Factors which may be given consideration are outlined in FAR 49.305. (3) Briefly identify matters included in liability for property and other charges against the contractor arising from the contract. (4) Identify reservations included in the settlement that are other than standard reservations required by regulations and which are concerned with pending claims and refunds. (5) Explain substantial or otherwise important adjustments made in cost figures submitted by the contractor in arriving at the proposed settlement. (6) If unreimbursed costs were settled on a lump sum basis, explain the general basis for and the major factors considered in arriving at this settlement. (7) Comment on any unusual items of cost included in the claim and on any phase of cost allocation requiring particular attention and not covered above. (8) If auditor's recommendations for nonacceptance were not followed, explain briefly the main reasons why such recommendations were not followed. (9) On items recommended for further consideration by the auditor, expiain, in general, the basis for the action taken. (10) If any cost previously disallowed by a contracting officer is included in the proposed settlement, identify and explain the reason for inclusion of such costs. (11) Show number and amounts of settlements with subcontractors. (12) Use the following summary where settlement includes costs and fixed fee in a complete termination: (13) Plant clearance. Indicate dollar value of termination inventory and state whether plant clearance has been completed. Attach consolidated plant clearance report (SF 1424, Inventory Disposal Report). (14) Government property. State whether all Government property has been accounted for. (15) Include a statement that the settlement is fair and reasonable to the Government and the contractor. The contracting officer shall sign and date the memorandum. |