FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.3
FAR 49.304-2 Submission of settlement proposal (fee only).
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 a contractor how to submit a settlement proposal when a termination for convenience affects only the fee, not costs. The contractor must limit the proposal to a proposed reduction in fee and submit it to the Termination Contracting Officer (TCO) within one year from the termination's effective date, unless the TCO extends that period.
Applies to: Contractors submitting a fee-only settlement proposal after a termination for convenience
What it requires
- Limit the settlement proposal to a proposed reduction in the amount of fee.
- Submit the final settlement proposal to the TCO within one year from the effective date of termination, unless the TCO extends the period.
- Substantiate the amount of fee claimed.
Key terms: settlement proposal · fee · TCO · effective date of termination · substantiate
Written by AI from this section's text. A guide, not legal advice: the text below rules.
The text
The contractor shall limit the settlement proposal to a proposed reduction in the amount of fee. The final settlement proposal shall be submitted to the TCO within one year from the effective date of termination, unless the period is extended by the TCO. The proposal may be submitted in the form prescribed in 49.602-1 or by letter appropriately certified. The contractor shall substantiate the amount of fee claimed (see 49.305).
Sections that refer to it
- 49.304-1 General.
← 49.304-1 General. · 49.304-3 Submission of vouchers. →
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.