§ 1-8.805 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 § 1-8.504.

SCRAP WARRANTY

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 of America as follows:

(a) 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.

(b) In the event the undersigned is released from this warranty, or 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.

(c) 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.

§ 1-8.806 Formats of settlement agreement.

§ 1-8.806-1 Settlement agreement for use in settling fixed-price prime contracts after complete termination.

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

(a) A corporation organized and existing under the laws of the State of ———

(b) A partnership consisting of (c) 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 interest 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:

(a) The term "termination inventory" means any items of physical property purchased, supplied, manufactured, furnished, or otherwise acquired for performance of the contract and properly allocable to the terminated portion of the contract. The term does not include any facilities, material, 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 contractor-acquired property and Government-furnished property as defined below.

(1) "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 ex ercises its contractual right to take title. (2) property" means property in the possession of or ac quired directly by the Government, and subsequently delivered or otherwise made available to the Contractor.

"Government-furnished

(b) The term "subcontract" means any contract, as defined in § 1-1.208 of the Federal Procurement Regulations (41 CFR 11.208), other than a prime contract, entered into by a prime contractor or a subcontrac tor, calling for supplies or services required for the performance of any one or more prime contracts.

(c) The term "scrap" means property which 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 him, sold to third parties, re

turned to suppliers, stored for the Government, delivered to the Government, or otherwise properly accounted for, and all proceeds or retention prices thereof, if any, have been taken into account in arriving at this agreement.

ARTICLE 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 his subcontract termination inventory (including scrap) has been retained or otherwise acquired by him, 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 (2) that the subcontractor has received from each of the immediate subcontractors whose claim was included in his claim 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 his rights relating thereto.

ARTICLE 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: (a) all such items are properly allocable to the terminated portion of the contract; (b) such items are not in excess of the reasonable quantitative requirements of the terminated portion of the contract; (c) such items do not include any items reasonably usable without loss to the Contractor, on his other work; and (d) the Contractor has informed the Contracting Officer of any substantial change in the status of such items between the dates of his termination inventory schedules and the date of this agreement.

ARTICLE 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 his 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.

ARTICLE 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 his assignee, upon presentation of proper 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 his 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 of $▬▬▬ [insert net amount of settlement), 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.

ARTICLE 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 is signed (see § 1-8.209-2). 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.]

'To be inserted where appropriate.

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

(b) All rights and liabilities of the parties arising under the contract articles, if any, or otherwise which relate to reproduction rights, patent infringements, inventions, and applications for patent and patents, including rights to assignments, invention reports and licenses, covenants of idemnity against patent risks, and bonds for patent indemnity obligations, together with all rights and liabilities under any such bond.

(c) All rights and liabilities of the parties under the contract relating to options (except options to continue or increase the work under the contract), covenants not to compete, and covenants of indemnity.

(d) All rights and liabilities of the parties under agreements with respect to the future care and disposition by the Contractor of Government-owned property remaining in his custody.

(e) All rights and liabilities of the parties under the contract with respect to any contract termination inventory stored for the Government pursuant to Article 1 hereof.

(f) All rights and liabilities of the parties under the contract with respect to any and all Government property furnished to the Contractor for the performance of this contract.

(g) All rights and liabilities of the parties arising under the contract, or otherwise, concerning defects in, or guarantees or warranties relating to, any articles or component parts furnished to the Government by the Contractor pursuant to the contract or this agreement.

(h) All rights and liabilities, if any, of the parties under those clauses inserted in the contract because of the requirements of statutes and Executive orders, including without limitation, any applicable clauses relating to the following topics: labor law, contingent fees, domestic articles, employment of a liens, and "officials not to benefit." [If the contract contains clauses of this character inserted for reasons other than requirements of statutes or Executive orders, the suggested language should be appropriately modified.]

In Witness Whereof, etc.

§ 1-8.806-2 Settlement agreement for use in settling fixed-price prime contracts after partial termination.

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

(a) A corporation organized and existing under the laws of the State of

(b) A partnership consisting of
(c) An individual doing business
-

(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 interest of the Government, and that the Contractor and 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 partial termination of the contract for the convenience of the Government as of the date and to the extent provided in such notice, to which reference is hereby made as to the part terminated, and said part is hereinafter referred to as the "terminated portion of the contract"; and

WHEREAS, as used herein, the following terms shall have the meanings hereinafter set forth:

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

(1) "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.

(2) "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.

(b) The term "subcontract" means any contract, as defined in § 1-1.208 of the Federal Procurement Regulations (41 CFR 1

1.208), 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.

(c) The term "scrap" means property which 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 terminated portion of the contract is designated as follows: (specify the terminated portion clearly as to items, including (a) item numbers, (b) descriptions, (c) quantity terminated, (d) unit price of items, (e) total price of terminated items, and (f) any other explanation necessary to avoid uncertainty or misunderstanding.)

ARTICLE 2. The Contractor certifies that all contract termination inventory (including scrap) has been retained or otherwise acquired by him, sold to third parties, returned to suppliers, stored for the Government, delivered to the Government, or otherwise properly accounted for, and all proreeds or retention prices thereof, if any, have been taken into account in arriving at this agreement.

ARTICLE 3. (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 his subcontract termination inventory (including scrap) has been retained or otherwise acquired by him, 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 (2) that the subcontractor has received from each of the immediate subcontractors whose claim was included in his claim 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 his rights relating thereto.

ARTICLE 4. 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: (a) all such items are properly allocable to the terminated portion of the contract; (b)

such items are not in excess of the reasonable quantitative requirements of the terminated portion of the contract; (c) such items do not include any items reasonably usable, without loss to the Contractor, on his other work; and (d) the Contractor has informed the Contracting Officer of any substantial change in the status of such items between the dates of his termination inventory schedules and the date of this agreement.

ARTICLE 5. 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 his 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.

ARTICLE 6. Upon execution of this agreement, the Government, agrees to pay to the Contractor or his assignee, upon presentation of proper invoices or vouchers, the sum of $[insert net amount of settlement), arrived at by deducting from the sum of [insert gross amount of settlement), (a) the amount of $- representing all unliquidated partial or progress payments previously made on account to the Contractor or his assignee and all unliquidated advance payments (with interest, if any, thereon) applicable to the terminated portion of the contract and (b) the amount of $representing all applicable property disposal credits. Said sum of $ [insert net amount of settlement], together with all other sums heretofore paid, constitutes payment in full and complete settlement of the amount due the Contractor with respect to the terminated portion of the contract, except as hereinafter provided in Article 7. ARTICLE 7. Upon payment of said sum of [insert net amount of settlement], all obligations of the Contractor to perform further work or services or to make further deliveries under the terminated portion of the contract and all obligations of the Government to make further payments or to carry out other undertakings in connection therewith shall cease: Provided, however, That nothing herein contained shall impair or affect in any way any covenants, terms, or conditions of the contract relating to the completed or continued portion thereof: And provided further, That, with respect to the terminated portion of the contract, the following rights and liabilities of the parties are reserved.

[The following list of reserved or excepted rights and liabilities relating to the terminated portion of the contract 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 § 1-8.209-2). 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.]

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

(b) All rights and liabilities, if any, of the parties under those clauses inserted in the contract because of the requirements of statutes and Executive orders, including, without limitation, any applicable clauses relating to the following topics: labor law, contingent fees, domestic articles, employment of aliens, and "officials not to benefit." [If the contract contains clauses of this character inserted for reasons other than requirements of statutes or Executive orders, the suggested language should be appropriately modified.]

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

(d) All rights and liabilities of the parties arising under the contract, or otherwise, concerning defects in, or guarantees or warranties relating to, any articles or component parts furnished to the Government by the Contractor pursuant to the contract or this agreement.

(e) All rights and liabilities of the parties with respect to any contract termination inventory stored for the Government pursuant to Article 2 hereof.

In Witness Whereof, etc.

§ 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.

THIS SUPPLEMENTAL AGREEMENT OF SETTLEMENT, entered into this day of

19- between the UNITED STATES OF AMERICA (hereinafter called "the Government") rep

(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 interest of the Government, and that the Contractor and 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;] [partial termination of the contract for the convenience of the Government as of the date and to the extent provided in such notice, to which reference is hereby made as to the part terminated, and said part is hereinafter referred to as "the terminated portion of the contract";]" and

WHEREAS, the Contractor, in connection with the performance of the contract, has entered into the following subcontracts [among others]: [Insert here a list of the terminated subcontracts included in this settlement], which subcontracts were terminated by the Contractor in accordance with the termination for convenience clause of the contract and in accordance with the Notice of Termination received by him from the Government; and

WHEREAS, the parties desire to settle that portion of the termination claim of the Contractor which is based upon the termination of the subcontracts listed herein; and

WHEREAS, as used herein, the following terms shall have the meanings hereinafter set forth:

(a) The term "termination inventory" means any items of physical property purchased, supplied manufactured, furnished, or otherwise acquired for performance of the contract and properly allocable to the

'Insert appropriate phrase. 'Insert where appropriate.