Preparing termination for convenience settlement proposals requires meticulous cost accounting, FAR compliance verification, and coordination of multiple subcontractor settlements. Attorneys spend hours calculating allowable costs, formatting SF forms, cross-referencing FAR provisions, and compiling supporting documentation—all while risking calculation errors or missing required certifications that could delay payment.
Preparing a Termination for Convenience Settlement Proposal requires extensive FAR knowledge, meticulous cost documentation, and precise regulatory compliance across multiple complex sections. Manual preparation takes 15-20 hours of attorney time, risks calculation errors, and often results in incomplete documentation that delays settlement negotiations.
CaseMark automates the entire settlement proposal process by analyzing your contract documents, organizing cost data, generating compliant inventory schedules, and producing a complete FAR Part 49-compliant submission. Our AI ensures all required certifications, cost justifications, and supporting documentation meet government standards while reducing preparation time by 95%.
This workflow is applicable across multiple practice areas and use cases
Government contractors facing termination disputes often litigate settlement amounts before boards of contract appeals or federal courts, requiring FAR-compliant settlement proposals as key evidence.
Commercial litigation involving government contracts frequently centers on termination for convenience disputes where properly documented settlement proposals are critical to proving damages and contractor entitlements.
When government contractors or their subcontractors enter bankruptcy, termination settlement proposals establish the value of contract claims and determine priority of payments in bankruptcy proceedings.
Bankruptcy trustees and creditors need accurate valuations of terminated government contracts to assess estate assets, and FAR-compliant settlement proposals provide standardized documentation of contract claim values.
During M&A due diligence of government contractors, pending termination settlements represent significant contingent assets or liabilities that must be valued and documented for deal structuring.
Acquirers of government contracting businesses need to assess the value of terminated contracts and pending settlement claims, making standardized settlement proposals essential for accurate business valuation.
Government contractors winding down operations must settle terminated contracts and recover costs as part of the dissolution process, requiring compliant settlement proposals to maximize asset recovery.
Corporate dissolution of government contractors involves terminating active contracts and collecting settlement amounts, making FAR-compliant proposals necessary to recover maximum value for creditors and shareholders.
A Termination for Convenience Settlement Proposal is a formal claim submitted by a government contractor to recover costs incurred when a federal contract is terminated under FAR Part 49. The proposal must document all allowable costs, justify the settlement amount, and comply with strict FAR requirements. It serves as the basis for negotiating final payment after the government exercises its right to terminate a contract for its convenience rather than contractor default.
Manual preparation of a comprehensive Termination for Convenience Settlement Proposal typically requires 15-20 hours of attorney or contract specialist time. This includes reviewing contract documents, analyzing financial records, calculating allowable costs, preparing inventory schedules, documenting subcontractor settlements, and ensuring FAR compliance. CaseMark reduces this to approximately 25 minutes by automating document analysis, cost calculations, and regulatory formatting.
Contractors can recover all allowable costs incurred up to the termination date under FAR Part 31 cost principles, including direct labor, materials, subcontractor expenses, and allocable indirect costs. Additionally, contractors may claim a reasonable profit or fee on work performed, settlement expenses, and costs associated with disposing of termination inventory. The settlement must exclude unallowable costs and account for any payments already received or credits due to the government.
SF 1435 (Settlement Proposal for Inventory Basis) is used when the contractor proposes settlement primarily based on the value of inventory items acquired for the contract. SF 1436 (Settlement Proposal for Total Cost Basis) is used when settlement is based on total costs incurred, typically for service contracts or when minimal inventory exists. CaseMark automatically determines which form is appropriate based on your contract type and cost structure, then generates the proposal in the correct format.
CaseMark incorporates current FAR Part 49 requirements, Part 31 cost principles, and government settlement procedures into its analysis engine. The system validates all cost elements against allowability criteria, ensures proper indirect cost allocation, verifies required certifications are included, and cross-references all regulatory citations. Each generated proposal includes compliance checks against official government templates and incorporates best practices from federal procurement law to minimize contracting officer objections.