AFFARS Part 5349

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PART 5349-TERMINATION OF CONTRACTS

SUBPART 5349.1-GENERAL PRINCIPLES

(a) Initiation of termination authority, AF Form 3056.

(b) PCO responsibilities. The PCO shall:

(c) TCO responsibilities. The TCO shall:

(d) Referral to a CAO. When referring a termination case to a CAO for settlement, the referring office will provide the ACO with the following:

(e) Delegation of authority. Termination of a contract is not a normal CAO function. Therefore, if the ACO is to be responsible for the actions in paragraphs (b), (c), and (d) above, the PCO must issue a specific delegation. To ensure availability of resources, first obtain the ACO's agreement.

The TCO shall obtain a legal review regarding the legal sufficiency of the termination settlement agreement and any modifications to the termination settlement agreement.

Establish settlement review boards commensurate with workload and include legal and pricing representatives. Settlement review boards should review and approve settlement agreements, unilateral determinations, agreements in lieu of default, and subcontract settlements, if:

SUBPART 5349.3-ADDITIONAL PRINCIPLES FOR COST-REIMBURSEMENT CONTRACTS TERMINATED FOR CONVENIENCE

(a) The standard termination clause for cost-reimbursement contracts (see FAR 52.249-6, Termination (Cost-Reimbursement)) provides that the TCO and the contractor negotiate the settlement of the fee. Any method which is fair and equitable to both parties may be used. When the parties are unable to agree on the adjustment, the percentage of completion formula contained in the contract clause should be used.

(b) Another method of estimating the percentage of completion is to have the requiring activity evaluate the percentage of completion of contract work from a strictly technical standpoint. The TCO should ensure that the technical evaluation is based on physical completion and not on costs incurred as such costs may represent a substantial overrun or underrun of the estimated costs.
(c) Estimating the ratio of costs incurred to the total estimated costs of performing the contract is another method of estimating percentage of completion. However, as any substantial cost overrun or underrun could result in a misleading physical percentage of completion, and since this method does not take into consideration the various degrees of complexities or difficulties of the work accomplished, this method should rarely be used. This method should only be used as a check on the estimates resulting from the methods described in paragraphs (a) and (b) above.
(d) Under no circumstances will the negotiation of the fee be used as a device for allowing contractor costs which would otherwise be unallowable.

SUBPART 5349.4-TERMINATION FOR DEFAULT

(a) Responsibility of the ACO.

(b) Responsibility of PCOs.

(c) Responsibilities of the TCO.

"This contract was terminated for default of the contractor by notice dated [insert date]. Items 6a and 6b above are not applicable. This termination file was closed on [insert date]."

The contracting officer may not waive the defaulted contractor's liability for any additional costs to the Government of the subsequent reprocurement of supplies or services. For a contract containing two or more line items, the defaulted contractor is liable only for the net cost increase to the Government considering all items which were reprocured. Unreasonable delay in reprocurement, reprocurement on the basis of a specification which is materially changed, or reprocurement prior to the issuance of the default notice to the contractor may release a contractor from liability for additional costs.

SUBPART 5349.5-CONTRACT TERMINATION CLAUSES

Forward requests to include the clause at DFARS 252.249-7000, Special Termination Costs, to SAF/AQCS with sufficient justification to support a decision by the Assistant Secretary of the Air Force for Acquisition (ASAF(A)) (nondelegable). Requests must be submitted at least 60 calendar days in advance of intended use so Congressional notification can be accomplished as required by Senate Appropriations Committee Report 103-321. Secretarial approval is required for any increase in the Government's maximum liability under the clause. Include:

SUBPART 5349.70-SPECIAL TERMINATION REQUIREMENTS

(a) Definition.
"Contract Price of Items Terminated (CPIT)," as used in this subpart, means the contract price(s) of supplies or services not yet accepted (but being terminated) multiplied by the quantities or periods of performance being terminated. Do not adjust downward for progress or advance payments, accepted vouchered costs, or less than full funding. Use estimates when unpriced contract actions (UCAs) are being terminated, or when otherwise necessary.
(b) Contracting officer procedures. These procedures apply to terminations for convenience and for default. The contracting officer shall submit the request for clearance by FAX to SAF/AQC at least five work days before the proposed termination date, as follows:

"(11) Name, office symbol, and phone and FAX numbers of the contracting officer;

(12) Name, office symbol, and phone number of the termination contracting officer;
(13) Name, office symbol, and phone number of the MAJCOM point of contact, if any;
(14) Name, office symbol, and phone number of the SAF or USAF PEM, if any; and
(15) Planned termination date."

(c) SAF/AQC procedures. SAF/AQCS, for systems and logistics contracts, and SAF/AQCO, for operational contracts, will prepare and staff a package for SAF/AQ or SAF/AQC approval (based on SAF/AQC determination), as follows:

(d) Congressional notification of the termination of classified programs will be through program channels.

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