tion (Canada) and the United States Department of Defense (see Appendix T.201, Canadian Agreements); (2) policies in T.201 and Part 249; and (3) the Manual of Procedure on Termination of Contracts, Department of Defence Production (Canada).

(b) The termination proposal of Canadian Commercial Corporation shall be submitted in the form prescribed in FAR 49.602 and shall reflect the amount of settlements with subcontractors. The letter transmitting the proposal shall certify that (1) subcontract settlements with Canadian subcontractors have been approved by the Contracts Settlement Committee of the Department of Defence Production (Canada), if required pursuant to the Manual of Procedure on Termination of Contracts, Department of Defence Production (Canada), and (2) that disposition of inventory has been completed. The TCO shall prepare an appropriate settlement agreement pursuant to the provisions of FAR 49.603.

(c) All Canadian subcontracts shall be settled by the Canadian Commercial Corporation pursuant to T.201. Schedules listing serviceable or usable contractor inventory shall be submitted by the Canadian Commercial Corporation to the TCO for screening in accordance with the provisions of FAR 45.6. Transfer instructions resulting from screening procedures shall be submitted to the Canadian Commercial Corporation for action. At the expiration of the screening period, the TCO shall advise the Canadian Com

mercial Corporation to proceed with disposition of contractor inventory determined to be surplus to the requirements of the Government. The settlement of Canadian subcontracts shall not be subject to approval or ratification by the TCO, except that in cases that result in a proposed negotiated settlement in excess of the total contract price of the prime contract, ratification of the proposed settlement by the United States PCO, evidenced by a contract modification increasing the contract price and obligating required additional funds shall be obtained by the TCO prior to final settlement.

(d) Termination proposals submitted by the United States subcontractors and suppliers normally should be referred by the Canadian Commercial Corporation to the TCO (normally DCASR, Cleveland) for settlement in accordance with this Part and T.201. Upon completion of all settlement action, the TCO shall advise the Canadian Commercial Corporation of the amount of the net settlement agreed upon, which shall be included in the termination proposal submitted pursuant to (b) above. Execution of a settlement agreement with the subcontractor shall be the responsibility of the Canadian Commercial Corporation.

249.7002 Prior notification of significant contract terminations.

(a) Prior Defense Department clearance of the information release is required before any notice or any information concerning a proposed contract termination involving a reduction in employment of 100 or more contractor employees is released to a contractor. Coordination of the timing of the notice to the contractor and release of information to Congress or the public is the responsibility of each Department through its liaison point designated in (d) below. In a labor surplus area, a lesser number than 100 may be significant, and if so, such information release should be similarly cleared.

(b) The following information will be submitted to the appropriate Departmental liaison point:

(1) Contract number, date, type of contract;

(2) Name of company;

(3) Nature of contract or end item;

(4) The reasons for the termination; (5) Contract price of items terminat. ed;

(6) Total number of contractor employees, involved including the Gov ernment's estimate of the number who may be discharged;

(7) Statement of anticipated impact on the company and the community (identify); identify area labor category; whether contractor is large or small business, and include any known impact on hardcore disadvantaged employment programs;

(8) Total number of subcontractors involved as well as the impact in this area, if known; and

(9) Draft (unclassified) of suggested press release of information.

(c) Clearance to release the information will be requested as soon as possible after the decision has been made to terminate a contract. Pending receipt of clearance to release, information pertinent to the termination will require "For Official Use Only" handling unless a security clearance is required.

(d) The Departmental liaison points for prior clearance to release information on significant terminations are as follows:

Army-OSA, OCLL, (SACLL), ASA (I&L) (copy)

Navy-Chief of Legislative Affairs (OLA-N)
Air Force-HQ USAF (AF/RDC)
Defense Logistics Agency-DLA-PC
Defense Communications Agency-Contract
Management Division (Code 260)
Defense Nuclear Agency-Chief, Office of

Procurement, OATR

Defense Mapping Agency-DMA/LO

(e) Liaison offices of Departments will act promptly on the request for clearance to release information (not later than two working days after receipt) to avoid the accrual of termina tion cost.

(f) This reporting requirement is assigned Report Control Symbol: DD(I&L)(AR) 1412.

249.7003 Special termination costs.

(a) The clause at 252.249-7000, Special Termination Costs, is authorized for use in an incrementally funded contract when:

(1) The contract term is two years or more;

(2) The contract is estimated to require total RDT&E financing in excess $25 million or total production -investment in excess of $100 million;

(3) Adequate resources are available within existing appropriated amounts to cover the contingent reserved liabil=ity for special termination costs in the event of contract termination; and

(4) The use of the clause in the contract is approved by the (Secretary of the Department concerned or designee. The clause may be used in circumstances other than those in (1) and (2) E above when approved by the Secretary of the Department concerned or designee. Any addition to the categories of special termination costs listed in paragraph (a) (1) through (4) of the clause in 252.249-7000 shall be procIessed in accordance with 201.404.

(b) The contractor and the contracting officer shall agree upon an amount that represents their best estimate of the total special termination costs to I which the contractor would be entitled in the event of termination of the contract. Such amount shall be inserted in the clause.

(c) A provision allowing for negotiated adjustments of the amount reserved for special termination costs may be inserted as paragraph (d) of the clause. Contract provisions for periodic adjustments by mutual agree- ment of the parties may be established based on, among other things, (1) set = time periods within the contract, (2) the Government's incremental assignment of funds to the contract, or (3) the time when certain performance milestones are accomplished by the = contractor. Provisions for such adjustments may be considered desirable in contracts containing unusually long performance periods, or in contracts where the contractor's cost risk associated with the contingent special termination costs, in the event of Government termination, fluctuates extensively over the period of the contract, depending on the scope of work to be performed during a certain period of the contract, or the amount of funds to be assigned to the contract during any one increment.

Subpart 250.3-Contract Adjustments

250.303 Contractor requests. 250.305 Processing cases. 250.306 Disposition.

Subpart 250.4-Residual Powers 250.403-70 Indemnification under contract involving both research and development and work that cannot be so classified.

Subpart 250.70—Act and Executive Order 250.7000 Scope.

250.7001 Act of August 28, 1958, as amended. 250.7002

Executive Order 10789 of November 14, 1958.

AUTHORITY: 5 U.S.C. 301, 10 U.S.C. 2202, DoD Directive 5000.35, DoD FAR Supplement 201.301.

SOURCE: 51 FR 46330, Dec. 23, 1986, unless otherwise noted.

250.001 Definitions.

"Agency head," as used within this part by the Department of Defense, does not include heads of defense agencies.

"Secretarial level," as used within this part by the Department of Defense, means an official at or above the level of an Assistant Secretary (or Deputy) of Defense or of the Army, Navy, or Air Force, and a Contract Adjustment Board established by the Secretary concerned.

(S-70) Record of requests and dispositions.

(1) General. In order that adequate records of actions by each Department pursuant to the Act may be maintained, 50.303(S-71) requires the preparation of a preliminary record when each request is filed for an adjustment under FAR Subpart 50.3, and 250.306(S-70) requires the preparation of a final record indicating the disposition of the request. This paragraph describes in detail the information which should be included in these records. A suggested format for the records is shown in 250.105(S-70)(4). It is designed so that the information required for the preliminary and final record with respect to each request may be combined on the same form. Departmental and agency supplements will designate the offices or officials responsible for preparing, submitting, receiving, and maintaining all records required by this part. Records required by this supplement shall be maintained in the Departments of the Army, Navy, and Air Force by their respective Contract Adjustment Boards and in the Headquarters of the defense agencies.

(2) Preliminary records. Each preliminary record prepared pursuant to 250.303(S-71) should contain the following information:

(i) Type of record. The fact that the record is a preliminary record should be indicated.

(ii) Date of contractor's request. The date on the face of the contractor's request for adjustment should be inserted.

(iii) Date received by government. The date the request for adjustment is received in any Government office to which the contractor may properly submit his request should be inserted.

(iv) Name and address of contractor. The full and correct name and address of the contractor filing the request should be inserted. If the contractor is a small business, this fact should be indicated.

(v) Name and address of the contractor's representative, if any. If a particular named person (employee, attorney, etc.) is the point of contact with the contractor, his full name and address should be inserted.

(vi) Cognizant contracting officer or office. The contracting officer administering the contract for which an adjustment was requested or, if none, the contracting officer or office cognizant of the request should be inserted.

(vii) Procuring activity. The name of the procuring activity with jurisdiction over the contracting officer or official referred to in (vi) above, should be inserted.

(viii) Property or service involved. A brief description of the item being procured or services being rendered should be inserted.

(ix) Extent of performance as of date of request. A brief indication, as of the date of the request, of the degree of completion of the contract should be inserted; for example, 50 percent completed, or performance not yet begun; if work is completed, indicate date of completion and whether final payment has been made.

(x) Contract number and date. The identifying numbers and dates of the contracts for which an adjustment is requested should be inserted. If there is no contract, then the word "None" should be inserted. If the question arises under a letter of intent, then that fact and the date of such letter should be inserted.

(xi) Award procedure. The procedure under which the contract was awarded, e.g., formal advertising, negotiation, or sealed bidding, should be indicated. The specific authority, if applicable, should be indicated; for example: "Neg. 10 U.S.C. 2304(a)(14).”

(xii) Type of contract. The type of contract involved (see FAR Part 16)

should be inserted; e.g., FFP (firm fixed-price), FPI (fixed-price incentive), CPFF (cost-plus-fixed-fee), or T&M (time and materials).

(xiii) Category of case. Whether the request involves an amendment without consideration, a mistake, or an informal commitment should be indicated. If the case involves two or more categories, each should be indicated; however, the most significant category involved should be listed first.

(xiv) Amount or description of request. If the request is expressed in dollars, as a change in price, then that fact should be inserted as follows: "$5,250 increase" or "$5,250 decrease." If the request seeks an adjustment which cannot be expressed in monetary terms, then a brief description of it should be inserted, such as "Cancellation" or "Modification of Terms." The fact that an adjustment is not easily expressed in dollar terms should not deter an estimate if such an estimate is made by the contractor in his request.

(xv) Date of this record. The date on which the record is signed and forwarded should be inserted.

(xvi) Signature. The record should be signed by an authorized representative of the reporting authority.

(3) Final records. Each final record prepared pursuant to 250.306-(S-70) should contain the information listed in (S-70)(2) (ii) through (xvi) above,

and, in addition, should contain the following information:

(i) Type of record. The fact that the record is a final record should be indicated.

(ii) Action below secretarial level. The disposition of the case, the office which took action, and the date thereof should be inserted. The disposition should be indicated as: "withdrawn," "denied," "approved,” or “forwarded." If the request was approved in whole or in part, the dollar amount or nature of the action should be indicated in a manner similar to that described in 250.105(S-70)(2)(xiv). The date should correspond with the date of the Memorandum of Decision or of the letter forwarding the request to the Board.

(iii) Action by contract adjustment board and date. The disposition of the case by the Contract Adjustment Board and the date thereof should be indicated in a manner similar to that described in (2) above.

(iv) Implementation and date. The contractual action or correspondence which implements the decision of the approving authority or of the Board should be inserted as follows: "amendment," "new contract," or "letter of denial."

(4) Sample format. The preliminary and final records described in (2) and (3) above may be prepared in a format substantially as follows: