FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.1
FAR 49.109-4 No-cost settlement.
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 tells the Termination Contracting Officer (TCO) to use a no-cost settlement agreement when the contractor has not incurred costs on the terminated part of the contract, or is willing to waive those costs, and owes the Government nothing. For a contractor, it means the termination can be closed out without payment from either side if those conditions are met.
Applies to: Termination Contracting Officers handling no-cost contract terminations
Key terms: TCO · no-cost settlement agreement · terminated portion · waive the costs incurred
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
The TCO shall execute a no-cost settlement agreement (see 49.603-6 or 49.603-7, as applicable) if (a) the contractor has not incurred costs for the terminated portion of the contract or (b) the contractor is willing to waive the costs incurred and (c) no amounts are due the Government under the contract.
← 49.109-3 Government property. · 49.109-5 Partial settlements. →
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.