Additional Duties of the Contracting Officer. After issuance of Notice of Termination, the Contracting Officer shall:
Direct the action required of the prime contractor.
Request Contractor’s settlement.
Examine the settlement proposal of the prime contractor and, when appropriate, the settlement proposals of subcontractors.
Promptly negotiate settlement with the contractor and enter into a settlement agreement.
Promptly settle the contractor’s settlement proposal by determination for the elements that cannot be agreed on, if unable to negotiate a complete settlement.
To expedite settlement, the Contracting Officer may request specially qualified personnel to assist in dealings with the contractor; advise on legal and contractual matters; conduct accounting reviews and advise and assist on accounting matters; and perform the following functions regarding e.g., termination inventory.
The Contracting Officer is responsible for the release of excess funds resulting from the termination. The Contracting Officer shall estimate the funds required to settle the termination, and within 30 days after the receipt of the termination notice, process release of excess funds.
Termination Case File. The Contracting Officer responsible for negotiating the final settlement shall establish a separate case file for each termination. This file should include an internal legal review of the proposed settlement. As with legal reviews, any audit report is advisory only, and is for the Contracting Officer to use in negotiating a settlement or issuing a unilateral determination. ACO/ACT personnel handling the audit reports must be careful not to reveal privileged information that will jeopardize the negotiation position of ACO/ACT HQs, the prime contractor, or a higher tier subcontractor. Consistent with this, and when in ACO/ACT HQs interest, the Contracting Officer may furnish audit reports to prime and higher tier subcontractors for their use in settling subcontract settlement proposals.
NATO Property. Before execution of a settlement agreement, the Contracting Officer shall determine the accuracy of NATO property account for the terminated contract. If an audit discloses property for which the contractor cannot account, the Contracting Officer shall reserve in the settlement agreement the rights of NATO regarding that property or make an appropriate deduction from the amount otherwise due to the contractor.
No-Cost Settlement. The Contracting Officer shall execute a no-cost settlement agreement if the contractor has not incurred costs for the terminated portion of the contract or is willing to waive the costs incurred and no amounts are due to the ACO/ACT HQs under the contract.
Settlement Disagreement. If the contractor and Contracting Officer cannot agree on a termination settlement, or if a settlement proposal is not submitted within the period required by the termination clause, the Contracting Officer shall issue a final determination of the amount due. However, before issuing a determination of the amount due to the contractor, the Contracting Officer shall give the contractor at least 15 days’ notice by certified mail (return receipt requested) to submit written evidence, so as to reach the Contracting Officer on or before a stated date, substantiating the amount previously proposed. The contractor has the burden of establishing, by proof satisfactory to the Contracting Officer, the amount proposed, and may submit vouchers, verified transcripts of books of account, audit reports, and other official documents as desired.
Settlement Negotiation Memorandum. The Contracting Officer shall, at the conclusion of negotiations, prepare a settlement negotiation memorandum describing the principal elements of the settlement for inclusion in the termination case file and for use by reviewing authorities. The memorandum shall include explanations of matters involving differences and doubtful questions settled by agreement, and the factors considered. The Contracting Officer should include any other matters that will assist reviewing authorities in understanding the basis for the settlement.
Final Payment. The total amount payable to the contractor for a settlement, before deducting disposal or other credits and exclusive of settlement costs, must not exceed the contract price less payments otherwise made or to be made under the contract. After execution of a settlement agreement or final determination, the contractor shall submit a voucher or invoice showing the applicable settlement amount, less any portion previously paid. The Contracting Officer shall attach a copy of the settlement agreement to the voucher or invoice and forward the documents to the responsible Fiscal Officer for payment.
Past Performance/Performance Reporting.Documenting past performance is crucial not only as a matter of recording current contractor activities (e.g., for exercising of options, settling disputes, etc.), but also to facilitate future source selections. At a minimum, P&C Branch Staff is expected to maintain a viable database for these aforementioned purposes. ACO/ACT HQs Staff participating to the procurement process should contribute to populate a past performance database. In addition, the P&C Branch will monitor current performance of contractors based upon customer feedback. Performance may be monitored by automated reporting, or by statistical sampling techniques.
Contractor Suspension/Debarment. The Contracting Officer is responsible for safeguarding the interests of ACO/ACT HQs, and is the sole authority for the settlement of disputes with contractors. Therefore, the Contracting Officer may declare the contractor unqualified as a source of supply, until such time as the contractor demonstrates that the identified deficiency has been corrected. Such decisions shall be reflected on a “Contractor Suspension/Debarment” roster maintained by every P&C Branch and properly documented by past performance reports/records.
Contract File Maintenance. Purchase Orders and contracts will not be destroyed until all contractual obligations have been satisfied. As a minimum, such documents must be on file, in either hardcopy or electronic form, for at least three years following International Board of Auditors for ACO/ACT HQs certification of the financial statement for the fiscal year of the transaction. When required by Host Nation laws, or if actions are pending, e.g., dispute or court cases, this retention period may be extended.
Contract Closeout. A contract is not complete and ready for closeout until the contractor complies with all the terms of the contract. Closeout is completed when all contract management actions have been ended, all disputes settled, and final payment has been made. Contracting Officers/Specialists are responsible for initiating, via an automated or manual system, the closeout of the contract after receiving evidence of its physical completion. At the outset of this process, the Contracting Officer must review the contract funds status and notify the Fund Manager and Fiscal Officer of any excess funds before de-obligating funds. For a contract to be physically complete and archived the following must be true:
ACO/ACT HQs must have inspected and accepted all deliverables (supplies or services).
All options, if any, have expired.
Notice of complete contract termination has been issued to the contractor.
