As prescribed in 249.501-70, 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.
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.
(End of clause)
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