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the final settlement agreement. This para. graph may be disregarded if the contract contains no such patent provisions.

6. 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 provisions of Part 1-8 of the Federal Procurement Regulations (41 CFR 1-8).

7. Office in Charge of Settlement. The Office named below will be in charge of the settlement of your claim. As to any matters not covered by this Notice, you shall consult the Office named below.

8. Acknowledgment of Receipt of Notice. Please acknowledge receipt of this notice as shown below.

the right to take over) of the following types or classes: (Insert proper identifica tion or "none".]

(e) You shall notify the Contracting Officer of any pending legal proceedings which relate to any subcontracts or purchase orders under the terminated contract or which have resulted in or which are intended to result in a lien or encumbrance 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 submit your settlement proposal and 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 Subpart 1-8.5 of the Federal Procurement Regulations (41 CFR 1-8.5).

4. Completed End Items. Subject to § 18.306 of the Federal Procurement Regulations (41 CFR 1-8.306), you will invoice acceptable completed end items under the contract in the usual way and not include them in your settlement proposal.

5. Patents. Your attention is called to any provisions of the contract which may require you to make a disclosure of, and to de. liver 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 contractural obligations must be complied with before execution of

(Contracting Officer)

(Name of Office)

(Address)

ACKNOWLEDGEMENT OF NOTICE The undersigned hereby acknowledges receipt of a signed copy of the foregoing Notice on ---- 19—.

(Name of Contractor) By ---

(Title)

81-8.802 Formats of settlement proposal forms. 81-8.802–1 Format 802–1, Settlement Proposal (Inventory Basis)—fixed-price type

contracts. (a) Page 1 of Format 802-1.

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(b) Page 2 of Format 802–1.

SCHEDULE A-MWYSIS O INVENTORY COST (lims 4 cod 6)
Puroisb the following information (unkss not reasonably owailable) in respect to inventories of knished componcou aad work
in process included in this proposal:
TOTA DIRECT Lion TOTAL DIRECT MATRIALS TOTAL INDunea ixrous

TOTAS
FINISHED COMPONENTS
WORK IN POCESS
SCHEDULE OTHER COSTS (liau I)

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SERTIFICATE THE UNDERSIGNID, individually spaus) hauthorized representative of the contractor, cerdhes that be bas examined this settlement proposal and chat, to the best of his knowledge and belief:

(1) AS TO CONTRACTOR'S OWN CHARGES.-The proposed settlement (exclusive of charges set forth in Item 14) and supe porting schedules and explanations have been prepared from the books of account and records of the contractor in K:

ce with recognized commercial accounting practices; ebey include only those charges locable to the terminated portion of this contract; they have been prepared with knowledge that they will, or may be used directly or indirectly as the basis of settlement of a claim or claims against the United States or sa agency thereof; and the charges as stated are fair and reasonable.

(2) AS TO SUBCONTRACTORS' CHANGIS.-(a) The contractor has examined, or caused to be exoniaed, to sa extent be considered adequate in the circumsances, the claims of his immediate subcontractors (exclusive of chains Aled against such immediate subcontractors by sbeir subcontractors): (b) the settlement on account of immediate subcontractors' owo charges are fair and reasonable, said charges are allocable to the terminated portion of this contrat sad said settlements wete ne gotiated in good faith sad are not more favorable to his iramediate subcontractors than those wbich the contractor would make if reimbursement by the Government were not involved; (c) the contractor has received from all bis immediate subcontractors appropriate certifcates with respect to their claims, which certificates are substancially in the form of this certificate; and (d) the contractor has no information leading him to doube (i) the reasonableness of the settlements with more remote subcontractors, or (ö) that the charges for them are allocable to this contract. Upon receipe by the code tractor of amounts covering settlemenu wid his immediate subcontractors, the contractor will pay or credit chem prompus with the amounts so received, to the extent that he has not previously done so. The term "subcontractor" as used above includes suppliers.

(Signature or arborised Storial)

NAME O CONTRACTOR

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