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FAR and DFARS › FAR Part 49: Termination of Contracts › Subpart 49.6

FAR 49.602-1 Termination settlement proposal forms.

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 contractors which Standard Form to use when submitting a settlement proposal after a contract termination. The right form depends on the contract type and how the proposal is calculated, and a short form is used for small fixed-price proposals. Using the correct form matters because it is required for submitting termination settlement proposals.

Applies to: Contractors submitting termination settlement proposals

What it requires

  • Use Standard Form 1435 for fixed-price contract settlement proposals computed on an inventory basis
  • Use Standard Form 1436 for fixed-price contract settlement proposals computed on a total cost basis
  • Use Standard Form 1437 for cost-reimbursement contract settlement proposals
  • Use Standard Form 1438 for fixed-price contract settlement proposals totaling less than $10,000

Key terms: Settlement Proposal (Inventory Basis) · Settlement Proposal (Total Cost Basis) · Settlement Proposal for Cost-Reimbursement Type Contracts · Settlement Proposal (Short Form) · fixed-price contracts

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

The text

(a) Standard Form 1435, Settlement Proposal (Inventory Basis), shall be used to submit settlement proposals resulting from the termination of fixed-price contracts if the proposals are computed on an inventory basis (see 49.206-2(a)).

(b) Standard Form 1436, Settlement Proposal (Total Cost Basis), shall be used to submit settlement proposals resulting from the termination of fixed-price contracts if the proposals are computed on a total cost basis (see 49.206-2(b)).

(c) Standard Form 1437, Settlement Proposal for Cost-Reimbursement Type Contracts, shall be used to submit settlement proposals resulting from the termination of cost-reimbursement contracts (see 49.302).

(d) Standard Form 1438, Settlement Proposal (Short Form), shall be used to submit settlement proposals resulting from the termination of fixed-price contracts if the total proposal is less than $10,000 (see 49.206-1(d)).

Sections it refers to

  • 49.206-2 Bases for settlement proposals.
  • 49.302 Discontinuance of vouchers.
  • 49.206-1 Submission of settlement proposals.

Sections that refer to it

  • 49.108-4 Authorization for subcontract settlements without approval or ratification.
  • 49.109-7 Settlement by determination.
  • 49.206-1 Submission of settlement proposals.
  • 49.302 Discontinuance of vouchers.
  • 49.303-1 Submission of settlement proposal.
  • 49.304-2 Submission of settlement proposal (fee only).
  • 49.602 Forms for settlement of terminated contracts.
  • 49.602-2 Inventory forms.
  • 53.249 Termination of contracts.

← 49.602 Forms for settlement of terminated contracts. · 49.602-2 Inventory forms. →

Rule changes for FAR Part 49

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

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