Overview
This section outlines the mandatory transition period for a contractor to stop submitting standard cost vouchers and move to a formal settlement proposal following the complete termination of a cost-reimbursement contract.
Key Rules
- Voucher Deadline: Contractors must stop using Standard Form (SF) 1034 for cost reimbursement no later than the last day of the sixth month following the month of termination.
- Early Transition: A contractor may voluntarily choose to stop submitting vouchers at any point during this six-month window.
- Fee Proposals: If all costs are vouchered within the six-month period, the contractor must submit a proposal for fee (using SF 1437 or a certified letter) within one year of the termination date, unless extended by the Termination Contracting Officer (TCO).
- Residual Costs: Once vouchers are discontinued, any remaining unvouchered costs and the proposed fee must be submitted as part of a formal settlement proposal under FAR 49.303.
- Partial Terminations: The procedures for partial terminations are governed by FAR 49.304 rather than these specific timelines.
Practical Implications
- Contractors must closely monitor the six-month "vouchering out" window to ensure a smooth transition from routine billing to the formal termination settlement process.
- Failure to submit a substantiated fee proposal within the one-year deadline can jeopardize the contractor’s ability to recover earned fees unless a formal extension is negotiated with the TCO.