Good afternoon FUN with the FAR Friends!
Thank you for joining us for our 25th episode of Season 11! Steve Daoust was our host with Alex Major & Franklin Turner as our guest speakers this session. They covered FAR Part 49 for our twenty-fifth episode of 2024!
Part 49 (Terminations of Contracts)
As a follow-up to Wednesday’s session, here are a few facts to ponder:
DID YOU KNOW?
Prime contractors are required to use guidance in FAR Part 49 to settle subcontracts terminated as a result of modification of a prime contract. FAR 49.002(b).
DID YOU KNOW?
Upon receiving a termination notice, a prime contractor is required to immediately stop work and terminate all subcontracts related to the terminated portion of the prime contract. FAR 49.104(a) and (b).
DID YOU KNOW?
The TCO usually must ratify or approve a prime contractor’s settlement agreement with its subcontractor. FAR 49.108-3(c). However, in some cases, if the prime requests it in writing, the TCO may authorize the prime to settle with subs without ratification or approval from the TCO. FAR 49.108-4(a)(1).
DID YOU KNOW?
The Government is required to pay for profit on preparations made and work performed by the contractor for the terminated portion of the contract but not on settlement expenses. FAR 49.202(a). However, the Government is not permitted to pay for such profit if it appears that the contractor would have incurred a loss had the contract been completed. FAR 49.203.
DID YOU KNOW?
A contracting officer must obtain the prior approval of his/her contracting office prior to issuing a show cause or cure notice to a contractor. FAR 49.402-3(b).
DID YOU KNOW?
Sample cure notices, show cause notices, termination notices, and termination settlement agreements can all be found at FAR 49.6.