DFARS 252.249-7000 Special Termination Costs

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Prescribed in 249.501-70
Effective Date:	1 December 1991
Clause or Provision:	Clause
Provision or Clause Number:	S 252.249-7000 Special Termination Costs
Principle Type And/Or Purpose of Contract:
Required:
Applicable:
Optional:
Subject:	Termination/Cancellation
ProcurementType:
Contract Threshold:
Prescription Overview:	Prescription (a) The clause at 252.249-7000, Special Termination Costs, may be used in an incrementally funded contract when its use is approved by the agency head. (b) The clause is authorized when— (1) The contract term is two years or more; (2) The contract is estimated to require— (i) Total RDT&E financing in excess of $25 million; or (ii) Total production investment in excess of $100 million; and (3) Adequate funds are available to cover the contingent reserve liability for special termination costs. (c) The contractor and the contracting officer must agree upon an amount that represents their best estimate of the total special termination costs to which the contractor would be entitled in the event of termination of the contract. Insert this amount in paragraph (c) of the clause. (d) (1) Consider substituting an alternate paragraph (c) for paragraph (c) of the basic clause when— (i) The contract covers an unusually long performance period; or (ii) The contractor's cost risk associated with contingent special termination costs is expected to fluctuate extensively over the period of the contract. (2) The alternate paragraph (c) should provide for periodic negotiation and adjustment of the amount reserved for special termination costs. Occasions for periodic adjustment may include— (i) The Government's incremental assignment of funds to the contract; (ii) The time when certain performance milestones are accomplished by the contractor; or (iii) Other specific time periods agreed upon by the contracting officer and the contractor.
Clause Overview:	Clause SPECIAL TERMINATION COSTS (DEC 1991) (a) Definition. “Special termination costs,” as used in this clause, means only costs in the following categories as defined in Part 31 of the Federal Acquisition Regulation (FAR)— (1) Severance pay, as provided in FAR 31.205-6(g); (2) Reasonable costs continuing after termination, as provided in FAR 31.205-42(b); (3) Settlement of expenses, as provided in FAR 31.205-42(g); (4) Costs of return of field service personnel from sites, as provided in FAR 31.205-35 and FAR 31.205-46(c); and (5) Costs in paragraphs (a)(1), (2), (3), and (4) of this clause to which subcontractors may be entitled in the event of termination. (b) Notwithstanding the Limitation of Cost/Limitation of Funds clause of this contract, the Contractor shall not include in its estimate of costs incurred or to be incurred, any amount for special termination costs to which the Contractor may be entitled in the event this contract is terminated for the convenience of the Government. (c) The Contractor agrees to perform this contract in such a manner that the Contractor's claim for special termination costs will not exceed $________. The Government shall have no obligation to pay the Contractor any amount for the special termination costs in excess of this amount. (d) In the event of termination for the convenience of the Government, this clause shall not be construed as affecting the allowability of special termination costs in any manner other than limiting the maximum amount of the costs payable by the Government. (e) This clause shall remain in full force and effect until this contract is fully funded.
Important Notes/Requirements:
Subcontract Threshold:
Incorporated by Reference:	Yes
Uniform Contract Format:
Editor:	Marshall

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Personal notes.

Need new threshholds