Overview
This section mandates that a Termination Contracting Officer (CO) immediately halt settlement negotiations and report the situation if they suspect illegal activity during the contract termination process.
Key Rules
- Mandatory Suspension: The TCO is legally required to discontinue all negotiations upon the suspicion of fraud or other criminal conduct.
- Reporting Obligation: The TCO must report the relevant facts in accordance with established agency-specific procedures (typically involving the Office of the Inspector General or legal counsel).
- Scope of Application: These rules apply specifically to the activities and submissions related to the settlement of a terminated contract.
Practical Implications
- Settlement payments and negotiations will be indefinitely frozen if a contractor's termination proposal or supporting data appears fraudulent.
- TCOs have no discretion to continue discussions once a suspicion is formed; the matter shifts from a contractual negotiation to a formal legal or criminal investigation.