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FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.1

FAR 49.109-3 Government property.

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

Before a termination settlement agreement is signed, the Termination Contracting Officer (TCO) must verify the accuracy of the Government property account for the terminated contract. If an audit finds property the contractor cannot account for, the TCO will either reserve the Government's rights to that property in the agreement or deduct an appropriate amount from what the contractor would otherwise be paid.

Applies to: Contractors with terminated contracts involving Government property

What it requires

  • Maintain accurate records of Government property so the account can be verified
  • Be prepared for the TCO to reserve Government rights or deduct amounts for unaccounted property before settlement

Key terms: TCO · settlement agreement · Government property account · terminated contract · audit

Written by AI from this section's text. A guide, not legal advice: the text below rules.

The text

Before execution of a settlement agreement, the TCO shall determine the accuracy of the Government property account for the terminated contract. If an audit discloses property for which the contractor cannot account, the TCO shall reserve in the settlement agreement the rights of the Government regarding that property or make an appropriate deduction from the amount otherwise due the contractor.

← 49.109-2 Reservations. · 49.109-4 No-cost settlement. →

Rule changes for FAR Part 49

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Plain words for the terms: glossary.

FAR 49.109-3 Government property · SpendQuery