FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.1
FAR 49.109-5 Partial settlements.
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 try to settle all rights and liabilities under a terminated contract in a single agreement, rather than settling piece by piece. Partial settlements are generally discouraged, but may be used when a full settlement cannot be completed promptly and the settled issues are clearly severable and won't harm either party's interests in the remaining issues.
Applies to: Termination Contracting Officers handling terminated contract settlements
Key terms: TCO · partial settlement · settlement proposal · terminated contract · severable
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
The TCO should attempt to settle in one agreement all rights and liabilities of the parties under the contract except those arising from any continued portion of the contract. Generally, the TCO shall not attempt to make partial settlements covering particular items of the prime contractor's settlement proposal. However, when a TCO cannot promptly complete settlement under the terminated contract, a partial settlement may be entered into if (a) the issues on which agreement has been reached are clearly severable from other issues and (b) the partial settlement will not prejudice the Government's or contractor's interests in disposing of the unsettled part of the settlement proposal.
← 49.109-4 No-cost settlement. · 49.109-6 Joint settlement of two or more settlement proposals. →
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.