FAR 49.605—Request to settle subcontractor settlement proposals.
Plain-English Summary
FAR 49.605 tells contractors what they must submit when asking the contracting officer for authority to settle subcontractor settlement proposals in a termination situation. The section is essentially an application checklist: it requires identifying information about the contractor and the plant divisions involved, an explanation of why the authority is needed, a description of the contractor’s termination-handling organization, data on uncompleted prime contracts and subcontracts, the contractor’s experience with terminations and subcontractor proposals, information on terminations already in process, a disclosure about whether similar requests have been made for the same plant divisions, and the specific limit of authority requested. In practice, this helps the Government judge whether the contractor has the organization, experience, workload, and controls needed to responsibly settle subcontractor claims on behalf of the termination effort. It also gives the contracting officer enough information to decide whether to grant, limit, or deny the requested authority and to avoid duplicate or conflicting authorizations across plant divisions.
Key Rules
Submit required application data
A contractor seeking authority must provide the listed information and any additional information the contracting officer requests. The submission is not optional or informal; it must be complete enough for the Government to evaluate the request.
Identify contractor and plant divisions
The request must state the contractor’s name and principal office address, plus the names and locations of the plant divisions for which authorization is sought. This ties the request to the specific organizational units that would handle subcontractor settlements.
Explain need for authority
The contractor must justify why the authorization is necessary. The contracting officer needs a business reason showing why the contractor should be allowed to settle subcontractor proposals rather than leaving all settlement actions to the Government.
Describe termination organization
The contractor must provide a full description of its termination-handling organization, including the officials responsible for processing and settling proposals. This lets the Government assess internal controls, staffing, and accountability.
Disclose contract and subcontract workload
The request must include the number and dollar amount of uncompleted Government contracts and uncompleted subcontracts under Government contracts, with estimated amounts if needed, and the percentage applicable to each agency. This shows the scale and distribution of the contractor’s current workload.
Show termination experience
The contractor must state its experience in termination matters, including experience handling subcontractor proposals. The Government uses this to evaluate whether the contractor has the practical capability to perform the authorized function.
Report current terminations
The contractor must identify the approximate amount and general nature of terminations currently in process. This helps the contracting officer understand the immediate workload and complexity of pending settlement actions.
Avoid duplicate applications
The request must state whether any other application has been made for any covered plant division, and if so, provide a full statement of the facts. This prevents overlapping or inconsistent requests for the same organizational units.
State requested authorization limit
The contractor must specify the limit of authorization requested. The contracting officer can then consider whether the authority should be broad or restricted in scope.
Responsibilities
Contractor
Prepare and submit a complete request for authority to settle subcontractor settlement proposals, including all listed information and any additional information the contracting officer requires.
Contractor
Provide accurate identifying information for the company and the specific plant divisions covered by the request.
Contractor
Explain why the authority is needed, describe the termination-processing organization, identify responsible officials, and disclose workload, experience, current terminations, prior applications, and the requested limit of authority.
Contracting Officer
Review the contractor’s submission and determine whether the information is sufficient to evaluate the request for settlement authority.
Contracting Officer
Request additional information if needed and use the submission to decide whether to grant, limit, or deny the requested authority.
Practical Implications
This section functions like a pre-approval package: if the contractor leaves out workload data, experience, or organizational details, the request may be delayed or rejected.
The contracting officer is looking for evidence of capability and control, not just a request form, so vague explanations of need or staffing are a common weakness.
Contractors should be careful to distinguish between plant divisions and company-wide authority; the request must match the exact organizational units involved.
The disclosure about other applications is important because duplicate or conflicting requests can create administrative confusion and inconsistent settlement authority.
Because the rule allows the contracting officer to require additional information, contractors should be prepared to support the request with backup data, estimates, and organizational details beyond the minimum list.
Official Regulatory Text
Contractors requesting authority to settle subcontractor settlement proposals shall furnish applicable information from the list below and any additional information required by the contracting officer: (a) Name of contractor and address of principal office. (b) Name and location of divisions of the applicant’s plant for which authorization is requested. (c) An explanation of the necessity and justification for the authorization requested. (d) A full description of the applicant’s organization for handling terminations, including the names of the officials in charge of processing and settling proposals. (e) The number and dollar amount (estimated if necessary) of uncompleted contracts with Government agencies and the percentage applicable to each agency. (f) The number and dollar amount (estimated if necessary) of uncompleted subcontracts under Government contracts and the percentage applicable to each agency. (g) The extent of the applicant’s experience in termination matters, including the handling of proposals of subcontractors. (h) The approximate amount and general nature of terminations of the applicant currently in process. (i) A statement that no other application has been made for any division of the applicant’s plant covered by the application or, if one has been made, a full statement of the facts. (j) The limit of authorization requested.