Code of Federal Regulations: Containing a Codification of Documents of ...

TERMINATION OF CONTRACTS

LETTER OF AUTHORIZATION

(a) In consideration of your written request of (Date) .... and pursuant to paragraph 8.209-4 of the NASA Procurement Regulation, you are authorized, subject to the limitations of the NASA Procurement Regulation and those stated below, to settle without further approval of the Government, all subcontracts and purchase orders terminated by you as a result of the NASA contract being modified or terminated for the convenience of the Government, or subcontracts or purchase orders which have been terminated under any other circumstances that may require the Government to bear the cost of their settlement. This authorization does not extend to the disposition of Government-furnished material and completed articles not delivered under the subcontract or purchase order, as these require screening and approval of disposal actions by the Government; except that allocable completed articles may be disposed of without Government approval or screening if the total amount (at subcontract price) when added to the amount of settlement (as computed below) does not exceed $..... (insert limit of authorization being granted).

(b) This authorization is subject to the following conditions and requirements:

(i) The amount of such subcontract termination settlement does not exceed $..... (insert limit of authorization being granted), computed as follows: (A) credits for retention or other disposal of termination inventory allocated to the claim, and for advance or partial payments, shall not be deducted from the gross claim or settlement; but (B) amounts payable for completed articles or work at the contract price, or for the settlement or discharge of termination claims of subcontractors (except those settlements which have not been approved by the Government), shall be deducted.

(ii) Any termination inventory involved has been disposed of in accordance with the NASA Procurement Regulation, except that screening and Government approval of scrap and salvage determinations are not required.

(iii) The contracting officer may incorporate specific instructions in each Notice of Termination as to the disposition of specific items of termination inventory, or the contracting officer may, at any time prior to final settlement, issue such specific instructions. No such instructions, however, will affect any disposal action taken by you or your subcontractors prior to receipt thereof.

(iv) The settlements made by you with your subcontractors and suppliers pursuant to the authorization granted herein, including sales, retention, or other dispositions of property involved in making such settlements, shall thereupon be reimbursable in accordance with Part 8 of the NASA Procurement Regulation and the termination clause of the contract, and will not require approval of the contracting officer or his authorized representative.

(v) Any number of separate settlements of $..... (insert limit of authorization granted) or less may be made with a single subcontractor. Claims which would normally be included in a single settlement proposal, such as those based on a series of separate orders for the same item under one contract, should be consolidated whenever possible and must not be divided in such a way as to bring them within the authorization.

(vi) The authorization to make settlements provided for herein is not to be exercised in the case of a subcontractor or supplier who is affiliated withyou. For this purpose,you should consider a contractor to be affiliated with you if you are under common control or there is any common interest between you by reason of stock ownership, or otherwise, which is sufficient to create a reasonable doubt that the bargaining between you is completely at arm's length.

(vii) A representative of this office will, from time to time, review your methods used in negotiating settlements with your subcontractors and make a selective examination of such settlements made by you. Where such a review indicates that you are not adequately protecting the Government's interest, this delegation will be revoked.

8.811 Delinquency Notices. The following are formats of delinquency notices which may be used to satisfy the requirements of 8.602-3. All notices will be sent with proof of delivery requested.

8.811

CFR TITLE 41 CHAPTER 18

FORMS

CURE NOTICE*

You are notified that the Government considers your (specify the Contractor's failure or failures), a condition that is endangering performance of the contract in accordance with its terms. Therefore, unless such condition is cured within ten (10) days after receipt hereof (or such longer time as the Contracting Officer may deem reasonably necessary) the Government may terminate subject contract for default under General Provision No...... (Default). (*Use only when the delivery schedule has not expired.)

The "Cure Notice" is required by the terms of the "Default" clause in the contract and derives its authority therefrom. Before using this notice, it must be ascertained that an amount of time equal to or greater than the period of "cure" remains in the contractually established delivery schedule or any extension thereof. If the time remaining in the contract delivery schedule is not sufficient to permit a realistic "Cure" period of ten (10) days or more, the "Cure Notice" should not be issued and the following "Show Cause Notice" may be used, if desired, immediately upon the expiration of delivery period.

SHOW CAUSE NOTICE*

Since you have failed to (perform Contract No...... within the time required by the terms thereof) (cure the conditions endangering performance under Contract No...... as described to you in the Government's letter of (date) .....), the Government is considering terminating said contract pursuant to General Provision No...... (Default). Pending a final decision in this matter, it will be necessary to determine whether your failure to perform arose out of causes beyond your control and without fault or negligence on your part. Accordingly, you are hereby afforded the opportunity to present, in writing, any facts bearing on the question to the Contracting Officer (insert complete address, including symbol, of activity where the Contracting Officer is located), with copy thereof to the undersigned for information within ten (10) days after receipt of this notice. Your failure to present any excuses within this time may be considered as an admission that none exist. Your attention is invited to the respective rights of the Contractor and the Government under General Provision No...... (Default) and the liabilities that may be invoked in the event a decision is made to terminate for default of the Contractor. (*Delivery schedule in part or in whole has expired.)

Any assistance rendered to you on this contract or acceptance by the Government of delinquent goods or services hereunder, will be solely for the purpose of mitigating damages, and is not to be construed as an intention on the part of the Government to condone any delinquency, or as a waiver of any rights the Government may have under subject contract.**

(**Stop work instructions may be used when it is definitely known that there are no further requirements for the items or services, but an investigation must be conducted to determine whether an actionable default exists in lieu of termination for convenience. In such a situation, the following may be inserted as the final paragraph of the Show Cause Notice:)

Pending decision you are instructed to stop all work immediately and to make no further commitments under subject contract. Advise all subcontractors and suppliers to do likewise.

NASA PROCUREMENT REGULATION

8.811