Fun with the FAR Part 49

1. Prime contractors are required to use guidance in FAR Part 49 to settle subcontracts terminated as a result of modification/termination of a prime contract. FAR 49.002(b).

2. 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).

3. In the event of a “partial” termination, the contractor may request an equitable adjustment in the price or prices of the continued portion of a fixed price contract. FAR 49.208.

4. The Government is strictly prohibited from paying for anticipatory profits and consequential damages as part of a termination settlement agreement. FAR 49.202(a).

5. The “Excusable Delays” clause set forth at FAR 52.249-14 is not required to be included in a firm fixed priced type contract. FAR 49.505(b).

6. Sample cure notices, show cause notices, termination notices, and termination settlement agreements can all be found at FAR 49.6.

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