DCMA Manual 2501-06 - Terminations

DCMA Manual 2501-06

Terminations

__________________________________________________________________

Office of Primary

Responsibility Contract Maintenance

Effective: October 2, 2018

Releasability: Cleared for public release

Implements: DCMA-INST 2501, “Contract Maintenance,” August 15, 2017

Incorporates and Cancels: DCMA-INST 101, “Termination for Convenience,”

October 10, 2014

Internal Control: Process flow and key controls are located on the Resource Page

Labor Codes: Located on the Resource Page

Resource Page Link: https://360.dcma.mil/sites/policy/CM/SitePages/2501-06r.aspx

Approved by: David H. Lewis, VADM, USN, Director

__________________________________________________________________

Purpose: This issuance, in accordance with the authority in DoD Directive 5105.64, “Defense

Contract Management Agency (DCMA)”:

• Implements DCMA-INST 2501, “Contract Maintenance”

• Defines procedures for negotiating settlements of contracts terminated for the

convenience of the Government that were previously covered in DCMA-INST 101,

“Termination for Convenience”

DCMA-MAN 2501-06, October 2, 2018

Table of Contents 2

TABLE OF CONTENTS

SECTION 1: GENERAL ISSUANCE INFORMATION ..........................................................3

1.1. Applicability .......................................................................................................................3

1.2. Policy .................................................................................................................................3

SECTION 2: RESPONSIBILITIES ............................................................................................4

2.1. Terminations Group Director. ............................................................................................4

2.2. Terminations Team Supervisor ..........................................................................................4

2.3. TCO ....................................................................................................................................4

2.4. ACO ...................................................................................................................................5

2.5. Plant Clearance Officer (PLCO) ........................................................................................5

2.6. DCMA International ..........................................................................................................6

2.7. DCMA Special Programs ...................................................................................................6

SECTION 3: TERMINATION FOR CONVENIENCE PROCEDURES ................................7

3.1. Overview ...........................................................................................................................7

3.2. Receive the Termination Notification ...............................................................................7

3.3. Conduct Post-Termination Conference. .............................................................................8

3.4. Termination Case File. .......................................................................................................9

3.5. Issue DD Form 1598. .........................................................................................................9

3.6. Release of Excess Funds ................................................................................................. 10

3.7. Review Settlement Proposal. .......................................................................................... 10

3.8. Obtain Field Reviews. ...................................................................................................... 10

3.9. Prepare Pre-Negotiation Objective Memorandum (PNOM) ............................................ 11

3.10. Obtain Appropriate Clearance. ....................................................................................... 11

3.11. Negotiate Settlement and Issue Settlement Modification ............................................... 12

3.12. Return Termination File to ACO for Close Out .............................................................13

SECTION 4: UNILATERAL AND NO COST SETTLEMENT PROCEDURES ................ 14

4.1. Unilateral Settlements ..................................................................................................... 14

4.2. No Cost Settlements ........................................................................................................ 14

4.3. Return Termination File to ACO for Close Out ............................................................... 14

GLOSSARY

G.1. Definitions ...................................................................................................................... 15

G.2. Acronyms ........................................................................................................................ 16

REFERENCES ............................................................................................................................. 17

DCMA-MAN 2501-06, October 2, 2018

Section 1: General Issuance Information 3

SECTION 1: GENERAL ISSUANCE INFORMATION

1.1. APPLICABILITY. This issuance applies to all DCMA activities that perform contract

maintenance activities.

1.2. POLICY. This manual expands on the contract administration policies established in

DCMA-INST 2501. It is DCMA policy to:

a. Settle contract terminations for convenience as delegated by the procuring contracting officer

(PCO) in a timely manner and coordinate with the required functional and technical specialists and

assigned DCMA legal counsel.

b. Communicate with all parties for a successful settlement that ensures the contractor is fairly

compensated on a timely basis while protecting the rights and interests of the Government.

c. Ensure post-termination conferences are conducted, if necessary.

d. Execute this manual in a safe, efficient, effective, and ethical manner.

DCMA-MAN 2501-06, October 2, 2018

Section 2: Responsibilities 4

SECTION 2: RESPONSIBILITIES

2.1. TERMINATIONS GROUP DIRECTOR. The Terminations Group Director must:

a. Plan and direct Terminations Group mission accomplishments.

b. Evaluate and resolve operational issues.

c. Provide technical expertise as the senior government expert for all terminations for

convenience actions.

d. Foster teamwork and provide resource management.

e. Ensure group compliance with regulatory requirements and guidance.

f. Review termination settlement proposals in excess of $5 million.

g. Ensure Board of Reviews are conducted in accordance with (IAW) agency policy.

2.2. TERMINATIONS TEAM SUPERVISOR. The Terminations Team Supervisor must:

a. Monitor the terminations inbox for timely workload assignment.

b. Provide guidance and assistance to Termination Contracting Officers (TCO) and

Termination Specialist.

c. Oversee and manage TCO workload.

d. Ensure group compliance with regulatory requirements and guidance.

e. Review proposed settlements between $1 and $5 million.

f. Oversee TCO compliance with required annual and functional training.

2.3. TCO. The TCO will:

a. Execute the duties of a TCO IAW Federal Acquisition Regulation (FAR) Subpart 49.105

(a).

b. Create termination contract file.

c. Prepare and distribute DD Form 1598, “Contract Termination Status Report.”

d. Review contract terms and conditions, Statement of Work, contract clauses, and first

article requirement.

DCMA-MAN 2501-06, October 2, 2018

Section 2: Responsibilities 5

e. Establish initial contact and conduct post termination conference with contractor within 3

working days of receipt of termination notice.

f. Notify PCO and Administrative Contracting Officer (ACO) of excess funds eligible for

release.

g. Check for canceling funds.

h. Request plant clearance.

i. Review contractor’s inventory schedule.

j. Review contractor’s settlement proposal for adequacy.

k. Approve/disapprove partial payments.

l. Request Defense Contract Audit Agency (DCAA) audit and assist audits of contractor(s)

and subcontractor(s) settlement proposal as applicable.

m. Request technical review as applicable.

n. Ratify subcontractor settlement proposals.

o. Negotiate termination settlement.

p. Issue settlement modification.

2.4. ACO. Upon receipt of the notice of termination, the ACO must:

a. Move terminated contract to section 3 in Mechanization of Contract Administration

Services (MOCAS).

b. Review the notice and notify the TCO of any outstanding issues, including any

outstanding claims.

c. Work with TCO regarding cancelling funds.

d. Perform contract close out functions.

e. Issue inventory transfer modifications when applicable (Prior to issuance, the ACO must

coordinate with the assigned PCO).

f. Support technical report request submitted by TCO.

2.5. PLANT CLEARANCE OFFICER (PLCO). The PLCO must:

DCMA-MAN 2501-06, October 2, 2018

Section 2: Responsibilities 6

a. Accept termination inventory schedules submitted into the Plant Clearance Automated

Reutilization Screening System (PCARSS), only after receiving concurrence from the TCO.

Upon acceptance, provide the TCO with the Plant Clearance Case number.

b. Ensure inventory verification and allocability reviews are completed and documented on

Standard Form (SF) 1423, “Inventory Verification Survey.” Provide the TCO with a copy of the

SF1423 upon completion.

c. Coordinate disposal plan with the TCO prior to issuing disposition instructions to the

contractor. Provide a copy of the SF 1424, “Inventory Disposal Report” to the TCO immediately

upon closure of Plant Clearance cases associated with the termination inventory.

d. Inventory schedules for Special Program terminations are manually created documents;

PCARSS is not used.

2.6. DCMA INTERNATIONAL. DCMA International ACOs must coordinate with Host

Nation partners as applicable.

2.7. DCMA SPECIAL PROGRAMS. DCMA Special Programs retains the authority to

negotiate and settle terminations for convenience; however, must comply with the Manual to the

maximum extent practicable and maintain supplemental instructions where deviations occur.

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 7

SECTION 3: TERMINATION FOR CONVENIENCE PROCEDURES

3.1. OVERVIEW. FAR termination and other contract clauses provide authorization for

contracting officers to terminate contracts and to enter into settlement agreements. Termination

authority resides with the PCO. After termination, the PCO delegates settlement administration

to TCOs. Upon receipt of a termination case, the TCO provides cradle to grave settlement

services to buying commands. The TCO advises the PCO of excess funds that can be released

from the contract and provides status reports when the termination case is initially established,

every 6 months thereafter, and upon final settlement. The TCO contacts the contractor advising

on the settlement process, settlement forms, instructions on creating a settlement proposal, and

guidelines on termination inventory, if applicable. The TCO evaluates settlement proposals for

adequacy, obtains the appropriate field reviews, if required, coordinates the return of government

furnished property, disposes of termination inventory, and issues the final settlement

modification. After final settlement, the TCO returns the termination file to the assigned ACO

for inclusion in the contract file and for close out of the contract. The responsibility for settling

Terminations for Default remains with the PCO and is not delegated to the TCO. This manual

provides guidance for executing the termination settlement process.

3.2. RECEIVE THE TERMINATION NOTICIFICATION. The PCO issues a written

termination notice via letter, modification, or telegram. The executed notice is distributed to the

contractor and ACO. Upon receipt, the ACO uploads the termination notice and all documents

related to the termination into the Agency system of record for termination files. (In some

instances, termination notices are submitted directly to the Terminations Group from the PCO

via email or the termination inbox. (The terminations inbox email address is located on the

resource page of this manual). If the notification is received via the inbox, the TCO must

provide notice to the ACO of the termination. When received by the Terminations Group, a

termination supervisor creates a termination case and assigns the case to the TCO for processing.

a. The TCO must review the termination notice to ensure compliance with the requirements

of FAR Part 49 (non-commercial items), FAR Part 12 (commercial items), or Defense Federal

Acquisition Regulation Supplement (DFARS) Part 249. The TCO must review the notice to

ensure it contains the requirements outlined in FAR Subpart 49.102, Notice of Termination. If

the notice is not in compliance, the TCO must notify the PCO. The notice must state:

(1) The contract is being terminated for the convenience of the Government under the

contract clause authorizing the termination;

(2) The effective date of termination;

(3) The extent of termination; and

(4) Any special instructions.

b. The TCO must review the notice for applicability with the termination for convenience

clause to determine if it is a termination as identified within FAR Part 49, or a termination of a

commercial item as identified within FAR Part 12.

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 8

c. Review the notice to ensure the PCO has not included settlement language (i.e., “no cost

cancellation, canceled in its entirety or is authorized to invoice”). If settlement language is

included in the termination notice, the TCO must return the termination to the PCO for final

processing.

d. Review the notice to confirm the date of termination.

e. Review the notice to determine if the contract was completely or partially terminated.

3.3. CONDUCT POST-TERMINATION CONFERENCE. The TCO must conduct a post-

termination conference as outlined in FAR Subpart 49.105 and direct the action required of the

prime contractor. The TCO will:

a. Request the contractor to provide an estimate of reimbursable termination costs.

b. Estimate the funds required to settle termination.

c. Within 30 days after receipt of the termination notice and once the estimate is received,

the TCO must provide the PCO an interim release of funds notification. This notice is sent via

email and a copy is placed in the termination case file.

d. Notify the contractor that complete inventory schedules, to include termination inventory

located at subcontractor(s) facilities after complete inventory schedules are due within 120 days

of the effective date of the termination notice (FAR Subpart 49.206-3 or FAR Subpart 49.303-2),

for cost contracts. Advise on general principles and procedures to be followed in the protection,

preservation, and disposition of the contractor’s and subcontractors’ termination inventories,

including the preparation of termination inventory schedules. Contracts awarded after 2010 are

required to submit inventory in PCARSS.

e. Notify the contractor of the forms required to submit a settlement proposal. (For

commercial contracts, forms are not required.)

f. Advise the contractor of the timeline requirement for submission of termination settlement

proposal. Non-commercial terminations proposals must be submitted to the TCO within 1-year of

the effective date of the termination notice, unless extended by the TCO, and the applicable clause in

contract (FAR

Subpart 49.206-1 and FAR Subpart 49.303-1). In the instance of a Commercial

contract terminated for the convenience of the government, the settlement proposal must be

submitted within 6 years from the effective date of the termination notice.

Obtain a list of subcontractors and the date subcontractor termination notices were issued.

h. Review contract to determine existence of first article requirements. If identified, obtain

information on whether approval was issued by the Contracting Officer.

i. Determine if there are any government claims or claims against the government.

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 9

j. For DCMA International, coordinate with Host Nation Partners as applicable.

3.4. TERMINATION CASE FILE. The TCO responsible for negotiating the final settlement

must maintain a separate case file for each termination. The files should be uploaded into the

Agency system of record Termination case file. The file will include:

a. Memoranda and records of all actions relative to the settlement.

b. Copy of the termination notice.

c. Copy of the terminated contract and any modifications.

d. DD Form 1598.

e. Funding documents (MOCAS).

f. Contractor Proposal.

g. Subcontractor Proposal, if applicable.

h. Audit Report/correspondence.

i. Technical Reports.

j. Negotiation Memorandum(s).

k. Inventory Schedules/Disposal Report.

3.5. ISSUE DD FORM 1598, CONTRACT TERMINATION STATUS REPORT.

a. When the TCO and contracting officer are in different activities, the TCO must furnish

periodic status reports on termination actions to the contracting officer upon request. TCO will:

(1) Prepare a DD Form 1598.

(2) Within 30 days of receipt of termination, send one copy to the PCO and one copy to

ACO.

(3) Continue reporting semiannually to cover the 6-month periods ending March and

September. The semiannual reports must be submitted within 30 days after the end of the

reporting period.

(4) Submit a final report within 30 days after closing the termination case.

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 10

b. The reports are distributed via email to the PCO and a copy should be uploaded in the

Agency system of record termination case file. The DD Form 1598 is located in Agency system

of record for terminations under termination forms.

3.6. RELEASE OF EXCESS FUNDS. The TCO must notify the PCO and the ACO, within 3

workdays after receipt of the termination notice, the amount of excess funds that can be removed

from the contract. During the initial termination conference, the TCO should have requested an

estimated settlement amount from the contractor (see paragraph 3.3.(b)). Upon receipt of the

estimate, the PCO must be notified of the projected amount required to settle the termination and

an updated recommended release of excess funds. This notification is completed via letter and a

copy of the notice must be filed in the termination case file in the Agency system of record for

terminations. The notification letter is found in the Agency system of record under termination

forms.

3.7. REVIEW SETTLEMENT PROPOSAL. The contractor must submit a final settlement

proposal covering unvouchered costs and any proposed fee within 1-year from the effective date

of termination, unless the period is extended by the TCO. The contractor must use the form(s)

prescribed in FAR Subpart 49.602-1 unless the TCO authorizes otherwise. The proposal should

not include costs that have been disallowed by the contracting officer or previously vouchered

and formally questioned by the government. When the contractor submits a settlement proposal,

the TCO must review the proposal for adequacy. The TCO must:

a. Review the proposal to ensure the appropriate proposal form(s) was utilized.

b. Ensure proposal contains all required contractor information (i.e., signature and date).

3.8. OBTAIN FIELD REVIEWS. The TCO must obtain the appropriate field review for each

prime contractor settlement proposal, if applicable. After review of contractor’s settlement

proposal, the TCO may request assistance from other functional or technical specialists. The

TCO will:

a. Refer all settlement proposals that exceed $100,000 or any applicable threshold

deviations, at either the prime or subcontract level to the appropriate audit agency for review and

recommendation. The referral should indicate any specific information or data that the TCO

desires and should include facts and circumstances that will assist the audit agency in performing

the evaluation function. The TCO will utilize the Audit Request memorandum located in the

Agency system of record when requesting an audit. The TCO must also include a completed

adequacy checklist when submitting a request for audit to DCAA. The TCO will determine the

appropriate branch office by inquiring through the DCAA web page. The audit request is

submitted to DCAA via email (the email address for DCAA can be located on the resource page

of this manual). The TCO must:

(1) Check for any current audit threshold deviations on the Resource Page of this

Manual.

(2) Request an agreed upon procedures audit from DCAA for complete termination of a

cost-reimbursable contract and upon receipt of final voucher from contractor.

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 11

b. Subject to the terms of the termination clause, the contractor must submit complete

inventory disposal schedules in PCARSS, reflecting inventory that is allocable to the terminated

portion of the contract. The inventory schedules must be submitted within 120 days from the

effective date of the termination unless otherwise extended by the TCO based on written

justification to support the extension. The TCO must request plant clearance for terminations

requiring disposition of termination inventory. The TCO must:

(1) Ensure the contractor submits complete inventory schedules in the Agency system of

record, PCARSS.

(2) Complete a request for Plant Clearance Memorandum and a DD Form 1640,

“Request for Plant Clearance.” The request is then submitted to the appropriate Plant Clearance

Officer via email. The request will include the contract number and the Inventory Schedule

number (if known). The TCO will identify the assigned Plant Clearance Officer by emailing the

plant clearance inbox or accessing the Contract Management Team eTool module on the DCMA

Homepage. The DD Form 1640 is located in the Agency system of record under termination

Forms.

(3) Classified inventory/data. The TCO must request that the contractor prepare a listing

of all classified inventory/data. Classified inventory cannot be submitted in PCARSS. The

listing must be coordinated with the security office of the buying command, the contractor, and

the DCMA Special Programs Property Center.

c. If the contract contains a First Article requirement, advise the Plant Clearance Officer by

annotating the DD Form 1640, “This contract has a first article requirement. Please contact the

TCO prior to inventory verification/allocability review.”

d. Request Technical assistance through the assigned ACO to:

(1) Obtain the contract percentage of completion for commercial contract terminations.

(2) Obtain percent complete for partial terminations.

(3) Support a request from DCAA in support of a termination proposal audit.

3.9. PREPARE PRE-NEGOTIATION OBJECTIVES MEMORANDUM (PNOM). Prior

to entering into negotiation, the TCO must establish pre-negotiation objectives. The TCO must

resolve and disposition all contract audit and technical findings. The pre-negotiation objectives

must include results from DCMA field support and the DCAA audit as applicable (refer to

DFARS Subpart 249.110). The contractor proposed amounts, audit recommendation amounts,

and the TCO’s position must also be included in the pre-negotiation position. The PNOM should

also include evidence that sufficient funding is available.

3.10. OBTAIN APPROPRIATE CLEARANCE. The TCO must obtain the appropriate level

of review prior to entering negotiations:

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 12

a. For a proposed settlement amount greater than $1 million but less than $5 million,

supervisor review is required.

b. For a proposed settlement amount greater than $5 million but less than $10 million,

Termination Director’s review is required.

c. For a proposed settlement amount greater than $10 million; a Board of Review is required

by DCMA-INST 134, “Boards of Review.”

3.11. NEGOTIATE SETTLEMENT AND ISSUE SETTLEMENT MODIFICATION. The

TCO should proceed with the settlement and execution of a settlement agreement upon

completion of required reviews. At the completion of negotiation and if agreement is reached,

the TCO must:

a. Prepare a Settlement Negotiation Memorandum supporting the amount, if any, due

the contractor (FAR Subpart 49.110, Settlement Negotiation Memorandum). See DFARS

Procedures, Guidance, and Information (PGI), 249.110, Settlement negotiation memorandum for

guidance regarding fixed-price and cost-reimbursement contracts.

b. The final settlement agreement may include all demands of the Government and proposals

of the contractor under the terminated contract. However, no amount will be allowed for any

item of cost disallowed by the Government, nor for any other item of cost of the same nature.

c. The TCO may, with PCO approval, deobligate excess funds as part of the settlement

modification.

d. Issue final settlement modification if agreement can be reached IAW FAR Subpart

49.109. Modifications are completed through the Agency system of record for modifications. If

the TCO does not have access to the terminated contract in the Agency system of record for

modifications, the termination file is returned to the buying command for issuance of the

settlement modification.

e. When the contractor and the TCO cannot agree on a termination settlement, the TCO must

issue a final decision. Before the issuance of a final decision, the TCO must issue a 15-day

notice giving contractor the opportunity to submit additional information. The 15-day notice

must be sent by certified mail (return receipt requested). The TCO must coordinate the issuance

of the 15-Day letter and any final decisions with the Office of General Counsel before release.

The 15-day notice is located in Agency system of record under termination forms.

(1) After considering the additional information provided, if any, and agreement is

reached, the TCO must issue the final settlement modification.

(2) If, after considering the additional information an agreement is not reached, the TCO will

use Alternate Dispute Resolution, when appropriate, prior to issuing a final decision. If an

agreement cannot be reached, the TCO will then issue a final decision (see FAR Subpart 49.109-

7, Settlement by Determination and DFARS PGI 249.109-7 Settlement by determination for use

DCMA-MAN 2501-06, October 2, 2018

Section 3: Termination for Convenience Procedures 13

of SF 30, “Amendment of Solicitation/ Modification of Contract”). All Settlement by

Determinations require review of the Office of Counsel before release. TCO should retain file

until the appeal period for a final decision has passed and TCO is sure contractor has not

appealed its determination.

f. Issue final DD Form 1598. The TCO will submit a final contract termination report within

30 days after closing the termination case (DFARS PGI 249.105-1). A copy of the final DD

Form 1598 must be filed in the Agency system of record for termination case file.

3.12. RETURN TERMINATION FILE TO ACO FOR CLOSE OUT. Once the TCO

executes the final settlement modification, all files are forwarded to the ACO for incorporation

into the official contract file.

a. The TCO must send the termination file to the ACO advising if there are excess funds to

be deobligated. A deobligation is the downward adjustment of the obligation recorded in a

contract document. It is caused by factors such as (1) termination of a part of the project, (2)

reduction in material prices, (3) cost under-run, or (4) correction of recorded amounts. The ACO

will proceed with normal administration activities on the balance of the remaining contract or

coordinates with the PCO to ensure funds are deobligated.

b. If the termination is partial, the documents are included in the active contract file. If the

termination is complete, the ACO will be notified to proceed with close out of the contract.

DCMA-MAN 2501-06, October 2, 2018

Section 4: Unilateral and No Cost Settlement Procedures 14

SECTION 4: UNILATERAL AND NO COST SETTLEMENT

PROCEDURES

4.1. UNILATERAL SETTLEMENTS. If the TCO does not receive the settlement proposal

within the 1-year time requirement of FAR Subpart 49.206-1, the TCO will issue a unilateral

determination settlement modification.

a. Prior to issuing the unilateral, the TCO is responsible for the collection of any

unliquidated progress payments remaining on the contract or debts to the government (i.e.,

overpayment made to contractor).

b. The TCO must also obtain from the Property Administrator, the contracting officer, or the

PLO a certification indicating the status of government furnished property or contractor acquired

under the contract, if applicable.

c. The TCO issues a unilateral modification and the modification is created in the Agency

system of record for modifications.

4. 2. NO COST SETTLEMENTS.

a. The TCO will issue a no cost agreement when:

(1) The contractor has not incurred costs for the terminated portion of the contract.

(2) The contractor is willing to waive the costs incurred.

(3) No amounts are due the government under the contract.

b. When a no-cost settlement is determined, the TCO is responsible for the collection of any

unliquidated progress payments remaining on the contract or debts to the government (i.e.,

overpayment made to contractor).

c. The TCO must also obtain from the Property Administrator, the contracting officer, or the

PLCO a certification indicating the status of government furnished property or material

furnished to or acquired by the contractor under the contract, if applicable.

d. The TCO issues a bilateral no cost modification reflecting the settlement agreement.

4.3. RETURN TERMINATION FILE TO ACO FOR CLOSE OUT. Once the TCO

executes the final settlement modification, all files are forwarded to the ACO for incorporation

into the official contract file. The TCO will advise the ACO of any excess funds to be

deobligated and to proceed with close out functions.

DCMA-MAN 2501-06, October 2, 2018

Glossary - Definitions 15

GLOSSARY 1

G.1. DEFINITIONS. 3

Complete Termination. A contract terminated in its entirety, regardless of contract 5

performance prior to termination. No more work is to be done on the contract after the 6

termination effective date. 7

First Article. A preproduction model, initial production sample, test sample, first lot, pilot lot, 9

or pilot models. 10

Partial Termination. Termination of a severable portion of a contract. (i.e., a line item or a 12

modification). When a contract is partially terminated, work continues on the remainder of the 13

contract requirement. 14

Settlement Agreement. A written agreement in the form of a contract modification settling all 16

or a severable portion of a settlement proposal. (FAR Part 49.001, Definitions). 17

Settlement Proposal. A proposal for effecting a settlement of a contract terminated in whole or 19

part, submitted by a contractor or subcontractor in the form, and supported by the data, required 20

from FAR Part 49. A settlement proposal is included within the generic meaning of the work 21

“claim” under false claims acts. (FAR Part 49.001, Definitions). 22

Termination for Convenience. The exercise of the Government’s right to completely or 24

partially terminate performance of work under a contract when it is in the Government’s interest. 25

Termination Inventory. Property purchased, supplied, manufactured, furnished, or otherwise 27

acquired for the performance of a contract subsequently terminated and properly allocable to the 28

terminated portion of the contract. It includes Government-furnished property. I t does not 29

include any facilities, material, special test equipment, or special tooling that are subject to a 30

separate contract or to a special contract requirement governing their use or disposition 31

DCMA-MAN 2501-06, October 2, 2018

Glossary - Acronyms 16

G.2 ACRONYMS

ACO Administrative Contracting Officer

DCAA Defense Contract Audit Agency

DCMA-INST DCMA Instruction

DD Form 1598 Contract Termination Status Report

DD Form 1640 Request for Plant Clearance

DFARS Department of Defense Federal Acquisition Regulation Supplement

FAR Federal Acquisition Regulation

IAW In Accordance With

MOCAS Mechanization of Contract Administration Services

PCARSS Plant Clearance Automated Reutilization Screening System

PCO Procuring Contracting Officer

PGI Procedures, Guidance, and Information

PLCO Plant Clearance Officer

PNOM Pre-Negotiation Objectives Memorandum

SF Standard Form

SF 30 Amendment of Solicitation/Modification of Contract

SF 1423 Inventory Verification Survey

SF 1424 Inventory Disposal Report

TCO Termination Contracting Officer

DCMA-MAN 2501-06, October 2, 2018

References 17

REFERENCES

DCMA Instruction 134, “Boards of Review,” October 15, 2012, as amended

DFARS Part 249, Termination of Contracts

DFARS PGI 249.105, Duties of the termination contracting officer after issuance of notice of

termination

DFARS PGI 249.110, Settlement negotiation memorandum

DoD Directive 5105.64, “Defense Contract Management Agency (DCMA),” January 10, 2013

FAR Part 12, Acquisition of Commercial Items

FAR Part 49, Termination of Contracts