PART 8 TERMINATION OF CONTRACTS Subpart 1-Definition of Terms 8.000 Scope and Applicability of Part. (a) This Part establishes uniform policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default. It includes uniform contract clauses with respect to termination and excusable delay, and approved termination and settlement forms. (b) This Part applies to contracts which by their terms provide for termination for the convenience of the Government or for the default of the contractor, whether or not the clauses in the contract with respect to termination and excusable delay are those set forth in Subpart 7 of this Part. In the event the clauses actually used in the contract are properly authorized termination clauses and are inconsistent with the provisions of this Part, the clauses actually used shall control to the extent of the inconsistency. Contracts which do not contain the applicable clauses may, where it is in the best interest of the Government, be amended by agreement prior to or after termination of the contract, to include or substitute such a clause. The provisions of this Part, unless inappropriate, shall be used to settle (i) subcontracts terminated as a result of modification of a prime contract, and (ii) shall be used as a guide by the contracting officer in evaluating settlements of subcontracts terminated for the convenience of a contractor whenever such settlement is to be the basis of a claim for reimbursement from the Government by a contractor under a cost-reimbursement type contract. (c) The provisions of this Part may be utilized in determining any equitable adjustment as a result of modification of any contract other than a cost-reimbursement type contract pursuant to the Changes clause. (d) Pursuant to the agreement with the Department of Defense, NASA may request assistance in performing certain contract administration functions, including termination. Paragraphs 8.206-50 and 8.601 set forth the policy and instructions for requesting such services. 8.101 Definitions. As used in this Part, the following terms have the meaning stated below: 8.101-1 Amount of Claim or Settlement. When the action to be taken under this Part depends upon the amount of a termination claim or settlement, then in determining such amount, the following shall not be deducted from the gross claim or settlement: (i) credits for retention or other disposal of termination inventory allocated to the claim; (ii) credits for advance, progress, or partial payments already received by the contractor; and (iii) amounts payable for completed articles or work at the contract price which are included in the settlement proposal. However, amounts payable for the settlement of termination claims of subcontractors shall be deducted. 8.101-2 Common items means material which is common in nature to both the terminated contract and the contractor's other work. 8.101-3 Continued portion of the contract means that portion of a partially terminated contract which relates to work or end items not already completed and accepted prior to the effective date of termination and which the contractor must continue to perform. NASA PROCUREMENT REGULATION 8.101-3 TERMINATION OF CONTRACTS 8.101-4 Contractor-acquired property is 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. 8.101-5 Contractor inventory means (i) any property acquired by and in the possession of a contractor or subcontractor (including Governmentfurnished property) under a contract pursuant to the terms of which title is vested in the Government, and in excess of the amounts needed to complete full performance under the entire contract; and (ii) any property which the Government is obligated to or has an option to take over under any type of contract as a result either of any changes in the specifications or plans thereunder or of the termination of such contract (or subcontract thereunder), prior to completion of the work, for the convenience or at the option of the Government. 8.101-6 Disbursing Officer means the officer or agent of the office designated as the paying office under the contract. 8.101-7 Effective date of termination means the date upon which the notice of termination first requires the contractor to stop performance, in whole or in part, under the contract. If, however, the termination notice is received subsequent to the date fixed for termination, then the effective date of termination means the date on which the notice is received. 8.101-8 Government-furnished property is property in the possession of or acquired directly by the Government, and subsequently delivered or otherwise made available to the contractor. 8.101-9 Material means property which may be incorporated into or attached to an end item to be delivered under a contract or which may be consumed or expended in the performance of a contract. It includes, but is not limited to, raw and processed material, parts, components, assemblies, and small tools and supplies which may be consumed in normal use in the performance of the contract. 8.101-10 Other work means any current or scheduled work of the contractor, whether Government or commercial, other than work related to the terminated contract. 8.101-11 Partial termination means the termination of a part, but not all, of the work which has not been completed and accepted under a con tract. 8.101-12 Plant clearance period means a period beginning with the effective date of the termination for convenience and ending, for each particular property classification (such as raw materials, purchased parts, and work in process) at any one plant or location, 180 days after receipt by the termination contracting officer (TCO) of acceptable inventory schedules covering all items of that particular property classification in the termination inventory at that plant or location, or ending on such later date as may be agreed to by the TCO and the contractor. Final phase of a plant clearance period means that part of a plant clearance period after the receipt of acceptable inventory scheduled covering all items of the particular property classification at the plant or location. 8.101-13 Plant equipment means personal property of a capital nature (consisting of equipment, machine tools, test equipment, furniture, vehicles, and accessory and auxiliary items, but excluding special tooling and special test equipment) used or capable of use in the manufacture of supplies or in the performance of services or for any administrative or general plant purpose. 8.101-4 CFR TITLE 41 CHAPTER 18 DEFINITION OF TERMS 8.101-14 Prime contract means any contract as defined in 1.207 entered into by any NASA procurement office. 8.101-15 Industrial plant equipment means that part of plant equipment with an acquisition cost of $1,000 or more which is listed in 13.312. 8.101-16 Salvage means property which, because of its worn, damaged, deteriorated, or incomplete condition, or specialized nature has no reasonable prospect of sale or use as serviceable property without major repairs or alterations but which has some value in excess of its scrap value. 8.101-17 Scrap means property that has no reasonable prospect of being sold except for the recovery value of its basic material content. 8.101-18 Serviceable or usable property means property that has reasonable prospect of sale or use either in its existing form or after minor repairs or alterations. 8.101-19 Settlement agreement means a written agreement in the form of an amendment to the contract, between the contractor and the Government settling all or a severable portion of a settlement proposal. 8.101-20 Settlement proposal means a termination claim submitted by a contractor or subcontractor in the form, and supported by the data, required by this Part. 8.101-21 Special machinery and equipment means that part of plant equipment which was acquired or constructed solely for the performance of the terminated contract or the terminated contract and other Government contracts, and as to which the contractor claims loss of useful value. 8.101-22 Special tooling shall have the meaning given in 13.101-5. 8.101-23 Special test equipment shall have the meaning given in 13.101 6. 8.101-24 Subcontract means any contract as defined in 1.207 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. 8.101-25 Termination claim means any claim by a contractor or subcontractor, permitted by the terms of a prime contract, for compensation for the termination, in whole or in part, of the prime contract or a subcontract thereunder, and any other claim which this Part authorizes to be asserted and settled in connection with a termination settlement. 8.101-26 Termination inventory means any items of physical property purchased, supplied, manufactured, furnished, or otherwise acquired for performance of the terminated contract and properly allocable to the terminated portion of the contract. The term does not include any facilities, special test equipment, material, or special tooling, which are subject to a separate contract or a special contract provision governing use or disposition thereof. Termination inventory may include contractor-acquired property and Government-furnished property as defined in 8.101-4 and 8.1018. 8.101-27 Terminated portion of the contract means that portion of a terminated contract which relates to work or end terms not already completed and accepted prior to the effective date of termination and which the contractor is not to continue to perform. 8.101-28 Unadjusted contract changes are any contract changes or contract provisions as to which a definitive modification is required but has not been executed. 8.101-50 Termination contracting officer (see 1.206 and 8.201(c)). NASA PROCUREMENT REGULATION 8.101-50 TERMINATION OF CONTRACTS 8.101-51 Contracting officer as used in this Part means the NASA contracting officer who awarded the contract and is responsible for its administration. 8.101-51 CFR TITLE 41 CHAPTER 18 Subpart 2-Contracts Terminated for Convenience 8.200 Scope of Subpart. This Subpart deals with: (i) the authority of contracting officers to terminate contracts in whole or in part (A) for the convenience of the Government; and (B) in the case of cost-reimbursement type contracts for default; (ii) duties of the contractor and the contracting officer after issuance of the notice of termination; (iii) general procedures for the settlement of terminated contracts; and (iv) settlement agreements. Subpart 3 sets forth additional principles applicable only to fixed-price type contracts. Subpart 4 sets forth additional principles applicable only to cost-reimbursement type contracts. Subpart 6 sets forth the principles applicable to the termination of fixed-price type contracts for default. 8.201 Authority of Contracting Officers. (a) The authority of contracting officers to terminate contracts for convenience, and for default in the case of cost-reimbursement type contracts, and to enter into settlement agreements under this Regulation is usually found in the termination clause or other provisions of the con tract. (b) Contracts shall be terminated, whether for default or convenience, only when such action is in the best interest of the Government, as determined in accordance with this Regulation. Where the contracting officer has ascertained that (i) the contractor will accept a no-cost settlement, (ii) Government property was not furnished, and (iii) there are no outstanding payments, claims, or other contractor obligations, the contracting officer shall effect a no-cost settlement agreement in lieu of authorizing the issuance of a notice of termination. When a no-cost settlement cannot be obtained, a notice of termination should be issued; however, when the price of the undelivered balance of the contract is less than $1,000, a termination for convenience should normally not be effected but the contract be permitted to run to completion. If a notice of termination has been issued, negotiation of the settlement with the contractor, including a nocost settlement if appropriate, shall be the responsibility of the termination contracting officer (see 8.206 and 8.210-4). (c) Special consideration will be given to small business over large business concerns when terminating contracts for the convenience of the Government. When the same item is under contract with both large and small business concerns and it is necessary to terminate for convenience part, but not all, of the units still to be delivered, the decision as to which contract or contracts to terminate shall be made by the Procurement Officer. (d) Heads of installations shall appoint a termination contracting officer (TCO) (see 1.206) to perform specific duties relating to contract termination as his primary function. Such duties should include: (i) receiving and reviewing the Termination Authority (NASA Form 1412); (ii) reviewing the contract and other related documents, prior to issuing the Notice of termination, to ensure protection of the Government's rights under the contract; (iii) issuing notices of termination, reinstatement and recission to contractors; (iv) assigning termination docket control numbers; (v) developing, maintaining and managing basic controls relating to contract termination and settlement actions, and (vi) carrying out the duties, functions and responsibilities set forth in this Part 8. 8.202 Prior Clearance of Significant Contract Terminations. NASA PROCUREMENT REGULATION 8.202 |