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48 CFR · Federal Acquisition Regulation and Defense supplement

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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.

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75 sections with “settlement proposal”: the first 40

  • FAR 49.107 Audit of prime contract settlement proposals and subcontract settlements.
    (a) The TCO shall refer each prime contractor settlement proposal valued at or above the threshold for obtaining certified cost or pricing data set forth in FAR 15.403-4(a)(1) to the appropriate audit agency for review and recommendations. …
  • FAR 49.109-6 Joint settlement of two or more settlement proposals.
    … the contractor, the TCO or TCO's concerned may negotiate jointly two or more termination settlement proposals of the same contractor under different contracts, even though the contracts are with different contracting offices or agencies. I…
  • FAR 49.206-1 Submission of settlement proposals.
    … provisions of the termination clause, the contractor should promptly submit to the TCO a settlement proposal for the amount claimed because of the termination. The final settlement proposal must be submitted within one year from the effect…
  • FAR 49.206-2 Bases for settlement proposals.
    (a) Inventory basis. (1) Use of the inventory basis for settlement proposals is preferred. Under this basis, the contractor may propose only costs allocable to the terminated portion of the contract, and the settlement proposal must itemize…
  • FAR 49.602-1 Termination settlement proposal forms.
    (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) …
  • FAR 49.108-6 Delay in settling subcontractor settlement proposals.
    When a prime contractor's inability to settle with a subcontractor delays the settlement of the prime contract, the TCO may settle with the prime contractor. The TCO shall except the subcontractor settlement proposal from the settlement in …
  • FAR 49.303-3 Audit of settlement proposal.
    The TCO shall submit the settlement proposal to the appropriate audit agency for review (see 49.107). However, if the settlement proposal is limited to an adjustment of fee, no referral to the audit agency is required.
  • FAR 49.304-2 Submission of settlement proposal (fee only).
    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 extend…
  • FAR 49.303-1 Submission of settlement proposal.
    The contractor shall submit a final settlement proposal covering unvouchered costs and any proposed fee to the TCO within 1 year from the effective date of termination, unless the period is extended by the TCO. The contractor shall use the …
  • FAR 49.605 Request to settle subcontractor settlement proposals.
    Contractors requesting authority to settle subcontractor settlement proposals shall furnish applicable information from the list below and any additional information required by the contracting officer: (a) Name of contractor and address o…
  • FAR 49.108 Settlement of subcontract settlement proposals.
  • FAR 49.206 Settlement proposals.
  • FAR 49.108-3 Settlement procedure.
    …le with subcontractors in general conformity with the policies and principles relating to settlement of prime contracts in this subpart and subparts 49.2 or 49.3. However, the basis and form of the subcontractor's settlement proposal must b…
  • FAR 49.108-4 Authorization for subcontract settlements without approval or ratification.
    …may, upon written request, give written authorization to the prime contractor to conclude settlements of subcontracts terminated in whole or in part without approval or ratification when the amount of settlement (see 49.002(d)) is $100,000 …
  • FAR 49.109-5 Partial settlements.
    …y 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…
  • FAR 49.109-7 Settlement by determination.
    (a) General. If the contractor and TCO cannot agree on a termination settlement, or if a settlement proposal is not submitted within the period required by the termination clause, the TCO shall issue a determination of the amount due consis…
  • FAR 49.115 Settlement of terminated incentive contracts.
    …(1) Partial termination. Under a partially terminated contract, the TCO shall negotiate a settlement as provided in the termination clause of the contract, and paragraph (j) of the clause at 52.216-16, Incentive Price Revision—Firm Target, …
  • FAR 49.603-3 Cost-reimbursement contracts—complete termination, if settlement includes cost.
    [Insert the following in Block 14 of SF 30 for settlement of cost-reimbursement contracts that are completely terminated, if settlement includes costs.] (a) This supplemental agreement settles the settlement proposal resulting from the Not…
  • FAR 49.603-8 Fixed-price contracts—settlements with subcontractors only.
    [Insert the following in Block 14 of SF 30 for settlements of fixed-price contracts covering only settlements with subcontractors.] (a) This agreement settles that portion of the settlement proposal of the Contractor that is based upon ter…
  • FAR 49.606 Granting subcontract settlement authorization.
    Contracting officers shall use the following format when granting subcontract settlement authorization: LETTER OF AUTHORIZATION (a) Your request of ______ (date) is approved, and you are authorized, subject to the limitations of subsectio…
  • FAR 49.103 Methods of settlement.
    Settlement of terminated cost-reimbursement contracts and fixed-price contracts terminated for convenience may be effected by (a) negotiated agreement, (b) determination by the TCO, (c) costing-out under vouchers using SF 1034, Public Vouch…
  • FAR 49.303-5 Final settlement.
    (a) The TCO shall proceed with the settlement and execution of a settlement agreement upon receipt of the audit report, if applicable, and the contract audit closing statement covering vouchered costs. (b) The TCO shall adjust the fee as p…
  • FAR 31.205-42 Termination costs.
    …hinery and equipment and starting load costs. (3) When initial costs are included in the settlement proposal as a direct charge, such costs shall not also be included in overhead. Initial costs attributable to only one contract shall not b…
  • FAR 49.001 Definitions.
    …lant clearance period means that period after receipt of acceptable inventory schedules. Settlement agreement means a written agreement in the form of a contract modification settling all or a severable portion of a settlement proposal. S…
  • FAR 49.002 Applicability.
    … of prime contracts. The contracting officer shall use this part as a guide in evaluating settlements of subcontracts terminated for the convenience of a contractor whenever the settlement will be the basis of a proposal for reimbursement f…
  • FAR 49.105 Duties of termination contracting officer after issuance of notice of termination.
    … the TCO shall— (1) Direct the action required of the prime contractor; (2) Examine the settlement proposal of the prime contractor and, when appropriate, the settlement proposals of subcontractors; (3) Promptly negotiate settlement with…
  • FAR 49.108-8 Assignment of rights under subcontracts.
    … clauses) also provide the Government the right, in its discretion, to settle and pay any settlement proposal arising out of the termination of subcontracts. This right does not obligate the Government to settle and pay settlement proposals…
  • FAR 49.109-1 General.
    When a termination settlement has been negotiated and all required reviews have been obtained, the contractor and the TCO shall execute a settlement agreement on Standard Form 30 (Amendment of Solicitation/Modification of Contract) (see 49.…
  • FAR 49.112-1 Partial payments.
    (a) General. If the contract authorizes partial payments on settlement proposals before settlement, a prime contractor may request them on the form prescribed in 49.602-4 at any time after submission of interim or final settlement proposals…
  • FAR 49.203 Adjustment for loss.
    (a) In the negotiation or determination of any settlement, the TCO shall not allow profit if it appears that the contractor would have incurred a loss had the entire contract been completed. The TCO shall negotiate or determine the amount o…
  • FAR 49.601-2 Letter notice.
    …ect to the exceptions in subparagraph (1) above; (iv) Provide instructions to submit any settlement proposal promptly; and (v) Request that similar notices and instructions be given to its immediate subcontractors. (4) Notify the Contrac…
  • FAR 49.603-1 Fixed-price contracts—complete termination.
    [Insert the following in Block 14 of SF 30 for settlements of fixed-price contracts completely terminated.] (a) This supplemental agreement settles the settlement proposal resulting from the Notice of Termination dated ____________________…
  • FAR 49.603-2 Fixed-price contracts—partial termination.
    [Insert the following in Block 14 of SF 30 for settlements of fixed-price contracts partially terminated.] (a) This supplemental agreement settles the settlement proposal resulting from the Notice of Termination dated __________________. …
  • FAR 52.249-2 Termination for Convenience of the Government (Fixed-Price).
    …ed, in which case the Government shall have the right to settle or to pay any termination settlement proposal arising out of those terminations. (5) With approval or ratification to the extent required by the Contracting Officer, settle al…
  • FAR 52.249-3 Termination for Convenience of the Government (Dismantling, Demolition, or Removal of Improvements).
    …ed, in which case the Government shall have the right to settle or to pay any termination settlement proposal arising out of those terminations. (5) With approval or ratification to the extent required by the Contracting Officer, settle al…
  • FAR 52.249-5 Termination for Convenience of the Government (Educational and Other Nonprofit Institutions).
    …nated, in which case the Government shall have the right to settle or pay any termination settlement proposal arising out of those terminations. (5) With approval or ratification to the extent required by the Contracting Officer, settle al…
  • FAR 52.249-6 Termination (Cost-Reimbursement).
    …ed, in which case the Government shall have the right to settle or to pay any termination settlement proposal arising out of those terminations. (5) With approval or ratification to the extent required by the Contracting Officer, settle al…
  • FAR 53.249 Termination of contracts.
    …Purchases and Services Other Than Personal. (See 49.302(a).) (2) SF 1435 (Rev. 03/2016), Settlement Proposal (Inventory Basis). (See 49.602-1(a).) (3) SF 1436 (Rev. 5/2004), Settlement Proposal (Total Cost Basis). (See 49.602-1(b).) (4) …
  • DFARS 249.7000 Terminated contracts with Canadian Commercial Corporation.
    …acting officers shall ensure that the Canadian Commercial Corporation submits termination settlement proposals in the format prescribed in FAR 49.602 and that they contain the amount of settlements with subcontractors. The termination contr…
  • FAR 49.108-5 Recognition of judgments and arbitration awards.
    …aw rights of the subcontractor; (3) The contractor made reasonable efforts to settle the settlement proposal of the subcontractor; (4) The contractor gave prompt notice to the contracting officer of the initiation of the proceedings in wh…

FAR (chapter 1)

DFARS (chapter 2, Defense)

Source: eCFR, 48 CFR chapters 1 and 2 (GPO GovInfo bulk data) ↗. Rule changes in progress: FAR, DFARS. Terms: glossary.