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 hereby referred to as "the termination portion of the contract"; and Whereas, it is the desire of the parties that an adjustment be made of the fee 1(and of the estimated cost) under the contract as a result of such partial termination;

Now, therefore, the parties agree as follows: Article 1. The contract is amended by deleting therefrom the terminated portion of the contract as follows: (Specify the terminated portion clearly as to items, including (i) item numbers, (ii) descriptions, and (iii) quantity terminated.)

1 Article 2 The estimated cost of the contract is decreased by $--.

Article 3. The fee stated in the contract is decreased by $--

Article 4. The Contractor's allowable costs and earned fee, if any, for the terminated portion of the contract will continue to be reimbursed on Form 1034 cost vouchers in accordance with the applicable provisions of the contract and of Part 15 of the NASA Procurement Regulation.

In Witness Whereof, the parties have executed this agreement as of the date above written.

Whereas, a settlement agreement was executed in connection with the termination of the contract, said settlement agreement being dated and being designated as Supplement No. to the contract; and Whereas, said settlement agreement excepted from the settlement therein contained certain items as more fully described in said final settlement agreement including the item(s) described in Clause 1 of this Agreement; and

Whereas, the Government and the Contractor have agreed to a settlement of said item(s) described in Clause 1 of this Agreement;

Now, therefore, the parties hereto do mutually agree as follows:

Clause 1. The Government agrees to pay to the Contractor the sum of $------ on account of the following item(s):

(a) (Cite Termination Notice and effective date.)

(b) (Cite previous letters releasing excess funds, if any.)1

1. By the referenced Termination Notice, the subject contract was (completely) (partially) terminated for the convenience of the Government.

2. On the basis of the best evidence available, it is estimated that the gross settlement costs will approximate $------. Therefore, See footnote at end of Format.

The estimated settlement costs previously reported by reference (b) in the total amount of $------ is hereby revised. On the best evidence now available, it is estimated that the settlement costs will approximate $------. Therefore, the additional amount available for release is $------.

1 When prior letters releasing excess funds are cited, the following shall be used as the text of paragraph 2.

§ 18-8.808 Format for termination contracting officer's settlement memorandum for fixed-price type contract terminated for convenience of the Government.

This memorandum shall be addressed to a reviewing authority or the file in accordance with § 18-8.211. Contractors and subcontractors should be encouraged to use this format appropriately modified to cover subcontract settlements submitted for review and approval.

PART I-GENERAL INFORMATION

1. Identification. (Identify memorandum as to its purpose and content.)

a. Name and address of the contractor. Comment on any pertinent affiliation between prime and subcontractors relative to the overall settlement.

b. Names and titles of both contractor and Government personnel who participated in the negotiation.

2. Description of Terminated Contract. a. Date of contract and contract number.

b. Type of contract (e.g., fixed price, or fixed price incentive).

c. General description of contract items. d. Total contract price.

e. Furnish reference to the contract termination provisions (cite NASA Procurement Regulation designation or other special provisions).

3. Termination Notice. a. Reference termination notice and state effective date of termination.

b. Scope and nature of termination (complete or partial), items terminated, unit price and total price of items terminated).

c. State whether termination notice was amended, and if so, explain.

d. Statement whether contractor stopped work on effective termination date. If he did not, furnish details. Also state whether subcontracts were terminated promptly by the contractor.

e. Statement as to diversion of common items and return of goods to suppliers, if any. f. Furnish information as to contract performance and timely deliveries on part of contractor.

PART II-CONTRACTOR'S SETTLEMENT PROPOSAL

1. Date and Amount. Indicate date and location where claim was filed. State gross amount of claim. (If interim settlement proposals were filed, furnish information for each claim.)

2. Basis of Claim. State whether claim was filed on inventory, total cost or other basis. Explain approval granted in connection with submission on other than inventory basis.

3. Examination of Proposal. State type of reviews made and by whom (audit, engineering, legal, or other).

PART III-TABULAR SUMMARY OF CONTRACTOR'S CLAIM

Item claimed

Contractor's proposal

PART IV-DISCUSSION OF SETTLEMENT

1. Contractor's Cost. a. If the settlement was negotiated on the basis of individual items, specify the factors and consideration with respect to each item.

b. In the case of a lump sum settlement, comment on the general basis for and major factors concerning each element of cost and profit included therein.

c. Comment on any important adjustments made to costs claimed or any significant amounts in relation to the total claim. d. If a partial termination is involved, state whether the contractor has requested an equitable adjustment in the price of the continued portion of the contract.

e. Comment on any unadjusted contractual changes which are included in the settlement.

f. Comment on whether or not a loss would have been incurred and explain adjustment for loss, if any.

g. Furnish other information believed helpful to the Settlement Review Board or any reviewing authority in understanding the recommended settlement.

2. Profit. Explain the basis and factors considered in arriving at a fair profit.

3. Settlement Expenses. Comment on and summarize those expenses not included in audit review.

4. Subcontractor's Settlements.

5. Partial Payments. Furnish total amount of partial payments, if any.

6. Progress or Advance Payments. Furnish total of unliquidated amounts, if any.

7. Claims of the Government Against the Contractor Included in Settlement Agreement Reservations. List all outstanding claims, if any, which the Government has against the contractor in connection with the terminated contract or terminated portion thereof.

8. Assignments. List any assignments, giving name and address of assignee.

9. Disposal Credits. Furnish information as to applicable disposal credits and give dollar amounts of all disposal credits.

10. Plant Clearance. State whether all plant clearance action has been complete and all inventory sold, retained or otherwise properly disposed of in accordance with applicable plant clearance regulations. Comment on any unusual matters pertaining to plant

b. Names and titles of contractor and Government personnel who participated in the negotiation.

2. Description of Terminated Contract. a. Date of contract and contract number. b. Type of contract.

c. General description of contract items. d. State total contract cost and fee data if complete termination.

e. Furnish reference to the contract termination provisions (cite NASA PR designation or other special provisions).

3. Termination Notice. a. Reference termination notice and state effective date of termination.

b. Scope and nature of termination (complete or partial, items terminated, estimated costs and fee data applicable to items terminated).

c. State whether termination notice was amended, and if so, explain.

d. Explain scope of the settlement as to whether settlement concerns fee only or whether costs are also included.

PART II-CONTRACTOR'S SETTLEMENT

PROPOSAL

1. Date and Amount. Indicate date and location where claim was filed. State gross amount of claim. (If interim settlement proposals were filed, furnish information for each claim.)

2. Examination of Proposal. State type of reviews made and by whom (audit, engineering, legal, or other).

PART III-TABLE SUMMARY OF SETTLEMENT

1. Summary. Summarize the proposed settlement in tabular form substantially as shown in Attachments A and B. Partial settlements may be summarized on Attachment B.

2. Comments. Furnish comments in amplification of tabular summaries.

a. Summary of Final Settlement (see Attachment A).

(1) If the auditor's final report was not available for consideration, state the circumstances.

(2) Explain how the fixed fee was adjusted. Identify basis used, such as percentage of completion. Include a description of factors considered and how they were considered. Include any tabular summaries and breakdowns deemed helpful to an understanding of the process. Factors which may be given consideration are outlined in § 18-8.406.

(3) Briefly identify matters included in liability for property and other charges against the contractor arising from the contract.

(4) Identify reservations included in the settlement that are other than standard reservations required by regulations and which are concerned with pending claims and refunds.

(5) Explain substantial or otherwise important adjustments made in cost figures submitted by the contractor in arriving at the proposed settlement.

(6) If unreimbursed costs were settled on a lump sum basis, explain the general basis for and the major factors considered in arriving at this settlement.

(7) Comment on any unusual items of cost included in the claim and on any phase of cost allocation requiring particular attention and not covered above.

(8) If auditor's recommendations for nonacceptance were not followed, explain briefly the main reasons why such recommendations were not followed.

(9) On items recommended for further consideration by the auditor, explain, in general, the basis for the action taken thereon.

(10) If any cost previously disallowed by a contracting officer is included in the proposed settlement, identify and explain the reason for inclusion of such costs.

(11) Show settlements with subcontractors by breakdown as follows:

No Cost Settlements.

Total

Gross Settlement_-_.

Less: Disposal credits_

Net Settlement--

Less: Prior Payments..

Other credits or deductions_.

Total

Net Payment-

Total contract estimated cost plus fixed fee..

Less:

Net settlement...

Estimated reserve for exclusions__