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(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 deliver 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

the final settlement agreement. This paragraph 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.

(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)

§1-8.802 Formats of settlement proposal forms.

§1-8.802-1 Format 802-1, Settlement Proposal (Inventory

contracts.

(a) Page 1 of Format 802-1.

Basis)-fixed-price type

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(b) Page 2 of Format 802-1.

SCHEDULE A-ANALYSIS OF INVENTORY COST (liems 4 and 6)

Furnish the following information (unless not reasonably available) in respect to inventories of finished components and work in process included in this proposal:

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WHERE THE SPACE PROVIDED FOR ANY INFORMATION IS INSUFFICIENT, ATTACH SEPARATE SUPPORTING SCHEDULES

2

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(If practicable, show separately amount of dupowal credits applicable to acceptable finished product included in Item 19)

NOTE - Individual items of small amounts may be grouped into a single entry in Schedules B, C, D, E, and G.

WHERE THE SPACE PROVIDED FOR ANY INFORMATION IS INSUFFICIENT, ATTACH SEPARATE SUPPORTING SCHEDULES

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FOR USE OP CONTRACTING AGENCY ONLY

FOR USE OF

CONTRACY
AGENCY

COMPACTINY
CONFUSE OF
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WHERE THE SPACE PROVIDED FOR ANY FORMATOR IS DISPPUDENT, ATTACH SEPARATE SUPPORTING SCHEDULES

SPECIMEN

CERTIFICATE

THE UNDERSIGNED, individually as an authorized representative of the contractor, certifies that he has examined this settlement proposal and that, 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 supporting schedules and explanations have been prepared from the books of account and records of the contractor in accordance with recognized commercial accounting practices; they include only those charges allocable 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 an agency thereof; and the charges as stated are fair and reasonable.

(2) AS TO SUBCOntractors' CharGES.—(a) The contractor has examined, or caused to be examined, to an extent be considered adequate in the circumstances, the claims of his immediate subcontractors (exclusive of claims filed against such immediate subcontractors by their subcontractors); (b) the settlements on account of immediate subcontractors' own charges are fair and reasonable, said charges are allocable to the terminated portion of this contract and said settlements were negotiated in good faith and are not more favorable to his immediate subcontractors than those which the contractor would make if reimbursement by the Government were not involved; (c) the contractor has received from all his immediate subcontractors appropriate certificates with respect to their claims, which certificates are substantially in the form of this certificate; and (d) the contractor has no information leading him to doubt (i) the reasonableness of the settlements with more remote subcontractors, or (ii) that the charges for them are allocable to this contract. Upon receipt by the con. tractor of amounts covering settlements with his immediate subcontractors, the contractor will pay or credit them promptly with the amounts so received, to the extent that he has not previously done so. The term "subcontractor" as used above includes suppliers.

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