FAR 49.602-2—Inventory forms.
Plain-English Summary
FAR 49.602-2 is a narrow but important procedural rule in the termination for convenience settlement process. It tells contractors and contracting officers which inventory forms must be used to support certain settlement proposals: Standard Form (SF) 1428, Inventory Disposal Schedule, and SF 1429, Inventory Disposal Schedule-Continuation Sheet. The section ties directly to the settlement proposal forms identified in FAR 49.602-1(b) and (d), meaning it applies when a contractor is preparing the inventory-related support for a termination settlement package under those prescribed forms. In practice, this requirement helps ensure that inventory subject to termination is identified, described, and disposed of in a consistent format so the Government can review, verify, and settle the claim efficiently. It matters because using the wrong form, omitting required inventory detail, or failing to provide continuation sheets when needed can delay settlement negotiations, create documentation gaps, and complicate the contracting officer’s review of allowable costs and disposal actions.
Key Rules
Use SF 1428
SF 1428, Inventory Disposal Schedule, must be used to support settlement proposals submitted on the forms specified in FAR 49.602-1(b) and (d). This is the required inventory schedule for documenting items subject to termination settlement.
Use SF 1429 as needed
SF 1429, Inventory Disposal Schedule-Continuation Sheet, must be used when additional space is needed to complete the inventory disposal information. It serves as the continuation format for the required inventory schedule.
Applies to specified settlement forms
This requirement is not a general inventory reporting rule for all terminations; it applies specifically to settlement proposals submitted on the forms identified in FAR 49.602-1(b) and (d). Users must match the inventory forms to the correct settlement proposal format.
Supports settlement documentation
The inventory forms are supporting documents for the settlement proposal, not stand-alone paperwork. They provide the detailed inventory disposal information needed to evaluate the contractor’s termination settlement submission.
Responsibilities
Contractor
Prepare and submit the required inventory disposal documentation using SF 1428, and use SF 1429 when additional pages are needed. The contractor must ensure the inventory information supports the settlement proposal forms required by FAR 49.602-1(b) and (d).
Contracting Officer
Review the settlement proposal package to confirm that the required inventory forms are used and that the inventory support is complete enough to evaluate the termination settlement. The contracting officer should reject or return incomplete submissions as appropriate and request corrections when the wrong forms are used.
Agency
Provide and administer the prescribed settlement process so contractors know which forms are required for inventory support. The agency must ensure its personnel apply the correct form requirements consistently in termination settlements.
Practical Implications
Contractors should expect to use SF 1428 whenever inventory disposal information is needed to support a termination settlement proposal under the referenced forms, and SF 1429 when the schedule runs long.
A common pitfall is submitting a settlement proposal without the required inventory schedule or using an informal spreadsheet instead of the prescribed SF forms.
Another frequent issue is failing to include enough detail on the inventory items, which can slow review and lead to follow-up questions from the contracting officer.
Because this section is cross-referenced to FAR 49.602-1(b) and (d), users must verify they are in the correct settlement-proposal category before deciding which forms apply.
Using the prescribed forms helps standardize the record, reduce disputes over inventory disposition, and speed settlement of terminated contracts.
Official Regulatory Text
Standard Form (SF) 1428 , Inventory Disposal Schedule, and SF 1429 , Inventory Disposal Schedule-Continuation Sheet, shall be used to support settlement proposals submitted on the forms specified in 49.602-1 (b) and (d).