FAR 49.303-2—Submission of inventory disposal schedules.
Plain-English Summary
FAR 49.303-2 explains when and how a contractor must submit inventory disposal schedules after a termination for convenience or other termination action involving termination inventory. It covers three core subjects: the requirement to submit complete schedules for inventory allocable to the terminated portion of the contract, the 120-day submission deadline measured from the effective date of termination, and the possibility of an extension when the Termination Contracting Officer (TCO) approves it based on a written justification. It also specifies the required form, Standard Form 1428, Inventory Disposal Schedule. In practice, this section is the starting point for the government’s review of what property remains after termination, what is usable, what should be retained, and what may be disposed of or otherwise accounted for. The rule exists to ensure timely, organized, and auditable identification of termination inventory so the government can minimize costs, prevent waste, and resolve termination settlement issues efficiently.
Key Rules
Submit complete schedules
When termination inventory is involved, the contractor must submit complete inventory disposal schedules to the TCO. The schedules must reflect only the inventory allocable to the terminated portion of the contract, so the contractor must separate terminated-work inventory from inventory tied to continuing work or other contracts.
Use the required form
The inventory disposal schedules must be prepared on Standard Form 1428, Inventory Disposal Schedule. Using the prescribed form helps ensure the government receives the information in a consistent format for review, disposition decisions, and settlement processing.
Meet the 120-day deadline
The contractor must submit the schedules within 120 days from the effective date of termination. This deadline is the default rule and is intended to move the termination process forward promptly so the government can evaluate and dispose of inventory without unnecessary delay.
Extensions require justification
The TCO may extend the submission deadline, but only based on a written justification supporting the extension. The contractor should not assume extra time is automatic; it must request relief and explain why the schedules cannot be completed on time.
Subject to the termination clause
The requirement applies subject to the terms of the termination clause in the contract. That means the specific contract clause may affect how the rule operates, but the contractor still must comply with the inventory schedule requirement unless the clause provides otherwise.
Responsibilities
Contractor
Identify all termination inventory allocable to the terminated portion of the contract, prepare complete inventory disposal schedules on Standard Form 1428, and submit them to the TCO within 120 days of the effective termination date unless an extension is granted. If more time is needed, provide a written justification supporting the request for extension.
Termination Contracting Officer (TCO)
Receive and review the inventory disposal schedules, determine whether an extension is warranted, and approve any extension only when supported by a written justification. The TCO also uses the schedules to manage disposition of termination inventory and support settlement actions.
Agency/Government
Use the submitted schedules to evaluate termination inventory, determine appropriate disposition, and support the termination settlement process. The agency must rely on accurate, timely contractor submissions to control costs and avoid unnecessary retention or disposal delays.
Practical Implications
Contractors should start inventory identification immediately after termination because the 120-day clock begins on the effective date of termination, not when the contractor finishes internal accounting work.
A common pitfall is submitting incomplete schedules or mixing terminated-contract inventory with inventory needed for ongoing work; the schedules must clearly isolate only the allocable termination inventory.
If the contractor cannot meet the deadline, it should request an extension early and provide a clear written justification; waiting until the deadline has passed can create avoidable compliance problems.
Using Standard Form 1428 correctly matters because errors or missing data can delay TCO review, disposition decisions, and final settlement of the termination.
For contracting officers and TCOs, timely review of the schedules is important because delays in inventory identification can increase storage, handling, and settlement costs and can complicate final closeout.
Official Regulatory Text
Subject to the terms of the termination clause, and whenever termination inventory is involved, the contractor shall submit complete inventory disposal schedules to the TCO reflecting inventory that is allocable to the terminated portion of the contract. The inventory disposal schedules shall be submitted within 120 days from the effective date of termination unless otherwise extended by the TCO based on a written justification to support the extension. The inventory disposal schedules shall be prepared on Standard Form 1428 Inventory Disposal Schedule.