mination of this contract under the provisions of this clause, it is determined for any reason that the Contractor was not in default under the provisions of this clause, and if this contract does not contain a clause providing for termination for convenience of the Government, the contract shall be equitably adjusted to compensate for such termination and the contract modified accordingly; failure to agree to any such adjustment shall be a dispute concerning a question of fact within the meaning of the clause of this contract entitled "Disputes."

(f) The right and remedies of the Government provided in this clause shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract.

(g) As used in paragraph (c) of this clause, the terms "subcontractor" and "subcontractors" mean subcontractor(s) at any tier.

[29 FR 10196, July 24, 1964, as amended at 34 FR 11358, July 9, 1969]

Subpart 1-8.8-Formats of Notices, Forms, Warranties, and Agreements

§ 1-8.800 Scope of subpart.

This subpart contains certain suggested formats of notices, forms, warranties, and agreements related to the termination and settlement of contracts. The formats are for guidance of agencies in their implementation of this Part 1-8.

§ 1-8.801 Notice of termination for convenience of the Government.

§ 1-8.801-1 Telegraphic notice.

(a) The following format of telegraphic notice is suggested for use where a supply contract is being completely terminated. With appropriate modification, the notice can be used in connection with other than a supply contract.

TELEGRAPHIC NOTICE-COMPLETE

TERMINATION

Date

XYZ Corporation

New York, New York

Your contract No. is hereby terminated in its entirety pursuant to clause of the contract effective [here insert "immediately” or “on19-," (inserting the date) or "as soon as you have delivered thereunder including previous deliveries the following items" (listing items)]. Immediately stop all work, terminate sub

contracts and place no further orders except to extent (insert if applicable "that is necessary to perform any portion thereof not terminated hereby or") that you or a subcontractor wish to retain and continue for own account any work in process or other materials. Telegraph similar instructions to all subcontractors and suppliers. Letters and instructions follow.

(Contracting Officer)

(b) The following format of telegraphic notice is suggested where a supply contract is being partially terminated. With appropriate modification, the notice can be used in connection with other than a supply contract.

TELEGRAPHIC NOTICE-PARTIAL TERMINATION Date

XYZ Corporation New York, New York Your contract No.

is hereby partially terminated pursuant to clause ——of the contract effective on 19-, on which date you will reduce its total number of items to be delivered as follows (inserting instructions as to reduced deliveries). Immediately stop all work, terminate subcontracts and place no further orders except to extent that is necessary to perform any portion thereof not terminated hereby or that you or a subcontractor wish to retain and continue for own account any work in process or other materials. Telegraph similar instructions to all subcontractors and suppliers. Letter and instructions follow.

(Contracting Officer)

§ 1-8.801-2 Letter notice.

The following format of letter notice of termination of a prime supply contract is suggested for use. With appropriate modification, it is suitable for use in terminating other than a supply contract and in terminating a subcontract.

LETTER NOTICE OF TERMINATION TO PRIME

CONTRACTORS

[At the top of the notice set out all special details relating to the particular termination: e.g., name and address of company, number of prime contract terminated, service involved, appropriation or allotment, etc.

Two alternative forms of paragraph No. 1 are set out below. If this written termination notice confirms a telegraphic notice previously sent, use the first of the alterna

tive paragraphs No. 1 below. If no previous telegraphic notice has been sent, use the second.]

1. Effective Date of Termination. This letter will confirm the Government's telegram to you dated 19-, terminat

-(here

ing [in part] your Contract No. inafter referred to as "the contract") for the convenience of the Government, in accordance with the clause thereof entitled "Termination for Convenience of the Government" [or, in the case of a cost-reimbursement-type contract, "Termination for Default or for Convenience of the Government"]. Such termination is effective on the date and in the manner stated in the telegram referenced above [or a copy of which is attached hereto].

insert either "immediately upon your receipt of this Notice" or "on 19-,"

(inserting the date) or "as soon as you have delivered under the contract the following number of each of the items listed below, including those heretofore delivered, to wit: or, "on 19-, on which

date you are hereby directed to reduce the total number of items to be delivered under the contract as follows": (here insert instructions as to reduced deliveries.)]

2. Cessation of Work and Notification to Immediate Subcontractors. (a) You shall stop all work, make no further shipments, and place no further orders in connection with the contract, except (1) to the extent necessary to perform any portion thereof not terminated by this Notice, or (2) to the extent that you may wish to retain and continue any work in process or other materials for your own account, or (3) to the extent the Contracting Officer authorizes you to continue work in process for reasons of safety, or to clear [or avoid damage to] equipment or to avoid immediate complete spoilage of work in process having a definite commercial value, or otherwise to prevent undue loss to the Government. [If you believe the authorization referred to in paragraph 2(a)(3) is necessary or advisable, you shall immediately notify the Contracting Officer by telephone or personal conference and obtain instructions.] You shall keep adequate records of your compliance with this paragraph 2(a) showing (i) the date you

received your Notice of Termination, (ii) the effective date of such termination, and (iii) the extent of completion of performance on such effective date.

(b) You shall give notice of termination to each of your immediate subcontractors (including suppliers) who will be affected by the termination of your contract. In such notice you shall (1) give him the number of your contract with the Government; (2) state that it has been terminated (or terminated in part, if that is the case) for the convenience of the Government; (3) give him the name and address of the Contracting Officer; (4) instruct him to stop all work, to make no further shipments, to place no more orders, and to terminate all subcontracts udner this contract with you (subject to the same exceptions stated in paragraph 2(a)); (5) direct him to submit his settlement proposal promptly in order to expedite settlement; and (6) request him to give similar notice and instructions to his immediate subcontractors.

(c) You shall notify the Contracting Officer of the number of articles completed under the contract and still on hand, and arrange with him for their delivery or other disposal.

(d) You shall forthwith transfer title to the Government and deliver in accordance with any instructions of the Contracting Officer, all items of termination inventory (including subcontractor termination inventory which under the terms of the subcontract or purchase order concerned you have the right to take over) of the following types or classes: [Insert proper identification or "none".]

(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 Regula

tions (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)