PART III-DISCUSSION OF SETTLEMENT

1.  Contractor's cost.

a.  If the settlement was negotiated on the basis of individual items, specify the factors and consideration for each item.

b.  In the case of a lump-sum settlement, comment on the general basis for and major factors concerning each element of cost and profit included.

c.  Comment on any important adjustments made to costs claimed or any significant amounts in relation to the total claim.

d.  If a partial termination is involved, state whether the contractor has requested an equitable adjustment in the price of the continued portion of the contract.

e.  Comment on any unadjusted contractual changes that are included in the settlement.

f.  Comment on whether or not a loss would have been incurred and explain adjustment for loss, if any.

g.  Furnish other information believed helpful to any reviewing authority in understanding the recommended settlement.

2.  Profit. Explain the basis and factors considered in arriving at a fair profit.

3.  Settlement expenses. Comment on and summarize those expenses not included in the audit review.

4.  Subcontractor's settlements. Include the number of no-cost settlements, settlements concluded by the contractor under delegation of authority and those approved by the termination contracting officer, as well as the net amount of each.

5.  Partial payments. Furnish the total amount of partial payments, if any.

6.  Progress or advance payments. Furnish the total of unliquidated amounts, if any.

7.  Claims of the Government against the contractor included in settlement agreement reservations. List all outstanding claims, if any, that the Government has against the contractor in connection with the terminated contract or terminated portion of the contract.

8.  Assignments. List any assignments, giving name and address of assignee.

9.  Disposal credits. Furnish information as to applicable disposal credits and give dollar amounts of all disposal credits.

10.  Plant clearance. State whether plant clearance action has been completed and all inventory sold, retained, or otherwise properly disposed of in accordance with applicable plant clearance regulations. Comment on any unusual matters pertaining to plant clearances. Attach consolidated closing plant clearance report.

11.  Government property. State whether all Government property has been accounted for.

12.  Special tooling. If involved, furnish comment on disposition.

13.  Summary of settlement. Summarize the settlement in tabular form substantially as follows:

14.  Exclusions. Describe any proposed reservation of rights to the Government or to the contractor.

15.  Include a statement that the settlement is fair and reasonable for the Government and the contractor. The contracting officer shall sign and date the memorandum.

(End of memorandum)