FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.1
FAR 49.109-1 General.
The codified text (eCFR, as of 2026-10-02). Under the Revolutionary FAR Overhaul ↗, agencies follow class deviations with new text for many parts while the formal rules go through the Federal Register: check the solicitation and your contract's clauses, which rule.
In plain English
This section explains that after a termination settlement is negotiated and reviewed, the contractor and the Termination Contracting Officer must sign a settlement agreement using Standard Form 30. The agreement must cover any government setoffs against the contractor and all subcontractor settlement proposals, unless some are specifically excluded and reserved for separate settlement.
Applies to: Contractors and Termination Contracting Officers involved in a terminated contract.
What it requires
- Execute a settlement agreement on Standard Form 30 with the TCO.
- Ensure the settlement covers any Government setoffs against the contractor.
- Ensure the settlement covers all subcontractor settlement proposals, except those specifically excepted and reserved.
Key terms: termination settlement · TCO · settlement agreement · Standard Form 30 · setoffs
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
When a termination settlement has been negotiated and all required reviews have been obtained, the contractor and the TCO shall execute a settlement agreement on Standard Form 30 (Amendment of Solicitation/Modification of Contract) (see 49.603). The settlement shall cover (a) any setoffs that the Government has against the contractor that may be applied against the terminated contract and (b) all settlement proposals of subcontractors, except proposals that are specifically excepted from the agreement and reserved for separate settlement.
Sections it refers to
- 49.603 Formats for termination for convenience settlement agreements.
← 49.109 Settlement agreements. · 49.109-2 Reservations. →
Rule changes for FAR Part 49
- Federal Acquisition Regulation: Revolutionary Federal Acquisition Regulation Overhaul Parts 3 and 49 ↗ · proposed 2026-06-23 · comments due 2026-07-23
- Federal Acquisition Regulation; Technical Amendments ↗ · final rule 2024-12-16 · effective 2025-01-03
Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.