B-58776, SEPTEMBER 26, 1946, 26 COMP. GEN. 216

B-58776: Sep 26, 1946

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AN AGREEMENT WAS ENTERED INTO FINALLY SETTLING THE RIGHTS AND LIABILITIES OF THE GOVERNMENT AND A CONTRACTOR UNDER A TERMINATED COST-PLUS-A-FIXED-FEE CONTRACT. IS FOR SETTLEMENT BY ADMINISTRATIVE DETERMINATION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THE JOINT TERMINATION REGULATION PROMULGATED THEREUNDER. WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED. WAS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT BY NOTICE OF TERMINATION EFFECTIVE AUGUST 15. A SUPPLEMENTAL CONTRACT (SETTLEMENT AGREEMENT) FOR " FINAL SETTLEMENT" ( SUPPLEMENT NO. 11) WAS ENTERED INTO PURSUANT TO THE CONTRACT SETTLEMENT ACT OF 1944. 471.07 IN FULL AND COMPLETE SETTLEMENT OF THE AMOUNT DUE THE CONTRACTOR BY REASON OF THE TERMINATION OF THE CONTRACT AND UPON THE PAYMENT OF SAID SUM THE RIGHTS AND LIABILITIES OF THE PARTIES UNDER THE CONTRACT AND UNDER "THE ACT" WERE TO CEASE AND BE FOREVER RELEASED.

B-58776, SEPTEMBER 26, 1946, 26 COMP. GEN. 216

CONTRACTS - COST-PLUS - RECLAIM VOUCHER SUBMISSION AFTER SETTLEMENT UNDER CONTRACT SETTLEMENT ACT OF 1944 WHERE, PURSUANT TO THE CONTRACT SETTLEMENT ACT OF 1944, AN AGREEMENT WAS ENTERED INTO FINALLY SETTLING THE RIGHTS AND LIABILITIES OF THE GOVERNMENT AND A CONTRACTOR UNDER A TERMINATED COST-PLUS-A-FIXED-FEE CONTRACT, EXCEPTING, AMONG OTHERS, AN ITEM OF COST WHICH HAD BEEN COLLECTED BACK FROM THE CONTRACTOR AS THE RESULT OF AN EXCEPTION TAKEN THERETO BY THE GENERAL ACCOUNTING OFFICE, A RECLAIM VOUCHER THEREAFTER PRESENTED TO THIS OFFICE PROPOSING PAYMENT OF SUCH ITEM MAY NOT BE REGARDED AS A MATTER PROPERLY FOR DECISION HERE, BUT IS FOR SETTLEMENT BY ADMINISTRATIVE DETERMINATION IN ACCORDANCE WITH THE PROVISIONS OF THE ACT AND THE JOINT TERMINATION REGULATION PROMULGATED THEREUNDER.

COMPTROLLER GENERAL WARREN TO COL. E. W. MCLARREN, U.S. ARMY, SEPTEMBER 26, 1946:

THERE HAS BEEN RECEIVED BY REFERENCE FROM THE OFFICE OF THE CHIEF OF FINANCE YOUR LETTER OF MARCH 15, 1946, TRANSMITTING RECLAIM VOUCHER 1, PROPOSING PAYMENT IN THE AMOUNT OF $20,684.33 TO COMMERCIAL SOLVENTS CORPORATION UNDER COST-PLUS-A-FIXED-FEE CONTRACT NO. W-ORD-523 DA-W-ORD 9, DATED JULY 7, 1941, WITH THE REQUEST THAT AN ADVANCE DECISION BE RENDERED AS TO WHETHER PAYMENT THEREON IS AUTHORIZED.

THE CONTRACT, WHICH PROVIDES IN GENERAL FOR THE EQUIPPING AND OPERATION BY THE CONTRACTOR OF AN ORDNANCE FACILITY IN THE VICINITY OF STERLINGTON, LOUISIANA, ON A COST-PLUS-A-FIXED-FEE BASIS, WAS TERMINATED FOR THE CONVENIENCE OF THE GOVERNMENT BY NOTICE OF TERMINATION EFFECTIVE AUGUST 15, 1945. THEREAFTER, ON FEBRUARY 11, 1946, A SUPPLEMENTAL CONTRACT (SETTLEMENT AGREEMENT) FOR " FINAL SETTLEMENT" ( SUPPLEMENT NO. 11) WAS ENTERED INTO PURSUANT TO THE CONTRACT SETTLEMENT ACT OF 1944, 58 STAT. 649, 41 F.C.A. 101-125, UNDER WHICH THE GOVERNMENT AGREED TO PAY TO THE CONTRACTOR THE SUM OF $71,471.07 IN FULL AND COMPLETE SETTLEMENT OF THE AMOUNT DUE THE CONTRACTOR BY REASON OF THE TERMINATION OF THE CONTRACT AND UPON THE PAYMENT OF SAID SUM THE RIGHTS AND LIABILITIES OF THE PARTIES UNDER THE CONTRACT AND UNDER "THE ACT" WERE TO CEASE AND BE FOREVER RELEASED, EXCEPT AS TO THE ITEMS ENUMERATED UNDER ARTICLE 4 (C) OF SAID SUPPLEMENTAL CONTRACT. INCLUDED AMONG SAID ITEMS IS AN ITEM OF $20,684.33 COVERED BY THE INSTANT VOUCHER AND CLAIMED BY THE CONTRACTOR ON ACCOUNT OF CERTAIN GAS GATHERING TAXES PAID BY IT TO ITS VENDOR, WHICH AMOUNT WAS COLLECTED FROM THE CONTRACTOR AS A RESULT OF AN EXCEPTION TAKEN THERETO BY THE AUDIT DIVISION OF THE GENERAL ACCOUNTING OFFICE.

WITH RESPECT TO THE SETTLEMENT OF CLAIMS ARISING BY REASON OF AND IN CONNECTION WITH THE TERMINATION OF WAR CONTRACTS, SECTIONS 6 AND 13 OF THE CONTRACT SETTLEMENT ACT OF 1944, SUPRA, 58 STAT. 652, 660, PROVIDE, IN PART (41 F.C.A. 106 AND 113), AS FOLLOWS:

106. COMPENSATION FOR TERMINATION OF WAR CONTRACTS; POLICY; METHODS FOR DETERMINING; SETTLEMENTS; FINALITY; REVIEW BY SETTLEMENT REVIEW BOARD; MATTERS INCLUDED AND EXCLUDED; INTEREST; AMENDMENT OF CONTRACT. -- (A) IT IS THE POLICY OF THE GOVERNMENT, AND IT SHALL BE THE RESPONSIBILITY OF THE CONTRACTING AGENCIES AND THE DIRECTOR, TO PROVIDE WAR CONTRACTORS WITH SPEEDY AND FAIR COMPENSATION FOR THE TERMINATION OF ANY WAR CONTRACT, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS ACT (SECS. 101 TO 125 OF THIS TITLE), GIVING PRIORITY TO CONTRACTORS WHOSE FACILITIES ARE PRIVATELY OWNED OR PRIVATELY OPERATED. * * *

113. CLAIMS NOT SETTLED BY AGREEMENT; FINDINGS OF CONTRACTING AGENCY; PARTIAL PAYMENT; APPEAL OR SUIT AGAINST UNITED STATES; DECISION; APPOINTMENT OF APPEAL BOARD; PROCEDURE; ARBITRATION.--- (A) WHENEVER THE CONTRACTING AGENCY RESPONSIBLE FOR SETTLING ANY TERMINATION CLAIM HAS NOT SETTLED THE CLAIM BY AGREEMENT OR HAS SO SETTLED ONLY A PART OF THE CLAIM, (1) THE CONTRACTING AGENCY AT ANY TIME MAY DETERMINE THE AMOUNT DUE ON SUCH CLAIM OF SUCH UNSETTLED PART, AND PREPARE WRITTEN FINDINGS INDICATING THE BASIS OF THE DETERMINATION, AND DELIVER A COPY OF SUCH FINDINGS TO THE WAR CONTRACTOR, OR (2) IF THE TERMINATION CLAIM HAS BEEN SUBMITTED IN THE MANNER AND SUBSTANTIALLY THE FORM PRESCRIBED UNDER THIS ACT (SECS. 101 TO 125 OF THIS TITLE), THE CONTRACTING AGENCY, UPON WRITTEN DEMAND BY THE WAR CONTRACTOR FOR SUCH FINDINGS, SHALL DETERMINE THE AMOUNT DUE ON THE CLAIM OR UNSETTLED PART AND PREPARE AND DELIVER SUCH FINDINGS TO THE WAR CONTRACTOR WITHIN NINETY DAYS AFTER THE RECEIPT BY THE AGENCY OF SUCH DEMAND. IN PREPARING SUCH FINDINGS, THE CONTRACTING AGENCY MAY REQUIRE THE WAR CONTRACTOR TO FURNISH SUCH INFORMATION AND TO SUBMIT SUCH AUDITS AS MAY BE REASONABLY NECESSARY FOR THAT PURPOSE. WITHIN THIRTY DAYS AFTER THE DELIVERY OF ANY SUCH FINDINGS, THE CONTRACTING AGENCY SHALL PAY TO THE WAR CONTRACTOR AT LEAST 90 PERCENTUM OF THE AMOUNT THEREBY DETERMINED TO BE DUE, AFTER DEDUCTING THE AMOUNT OF ANY OUTSTANDING INTERIM FINANCING APPLICABLE THERETO.

(B) WHENEVER ANY WAR CONTRACTOR IS AGGRIEVED BY THE FINDINGS OF A CONTRACTING AGENCY ON HIS CLAIM OR PART THEREOF OR BY ITS FAILURE TO MAKE SUCH FINDINGS IN ACCORDANCE WITH SUBSECTION (A) OF THIS SECTION, HE MAY, AT HIS ELECTION---

(1) APPEAL TO THE APPEAL BOARD IN ACCORDANCE WITH SUBSECTION (D) OF THIS SECTION; OR

(2) BRING SUIT AGAINST THE UNITED STATES FOR SUCH CLAIM OR SUCH PART THEREOF, IN THE COURT OF CLAIMS OR IN A UNITED STATES DISTRICT COURT, IN ACCORDANCE WITH SUBSECTION (20) OF SECTION 24 OF THE JUDICIAL CODE (28 U.S.C. 41 (20) ( * * *.

IN ORDER TO FACILITATE THE ADMINISTRATION OF THE TERMINATION OF WAR CONTRACTS AND IN ACCORDANCE WITH SECTION 4 OF THE CONTRACT SETTLEMENT ACT, SUPRA, 58 STAT. 651, THE WAR DEPARTMENT AND NAVY DEPARTMENT JOINTLY ADOPTED A JOINT TERMINATION REGULATION, WHICH REGULATION BY PARAGRAPH 111.2 THEREOF IS MADE APPLICABLE TO CONTRACTS OF " THE ARMY SERVICE FORCES, INCLUDING THE TECHNICAL SERVICES AND THE SERVICE COMMANDS," THEREBY INCLUDING THE CONTRACT HERE INVOLVED. SECTION V, PART 6, OF THE REGULATION OUTLINES THE SPECIAL PROCEDURES APPLICABLE TO THE SETTLEMENT OF TERMINATED COST-PLUS-A-FIXED-FEE CONTRACTS. PARAGRAPH 561 THEREOF PRESCRIBES THE PROCEDURES PRIOR TO TERMINATION WHICH ARE NECESSARY TO PROMPT SETTLEMENT IN THE EVENT OF TERMINATION, AND THE GENERAL PRINCIPLES GOVERNING SETTLEMENT OF TERMINATED COST-PLUS A-FIXED-FEE CONTRACTS ARE SET OUT IN PARAGRAPH 562. PARAGRAPH 562.1 IS AS FOLLOWS:

562.1. NECESSITY FOR COMPLETE AND FINAL SETTLEMENT.--- (1) AS IN THE CASE OF FIXED-PRICE CONTRACTS, IT IS THE POLICY OF THE WAR AND NAVY DEPARTMENTS THAT THE SETTLEMENT OF A TERMINATED COST-PLUS-A-FIXED FEE CONTRACT BE COMPLETE AND FINAL. SETTLEMENT SHOULD BE BY AGREEMENT TO THE MAXIMUM EXTENT FEASIBLE, BUT ANY CONTRACTS THAT CANNOT BE SETTLED BY AGREEMENT MUST BE SETTLED BY DETERMINATION, AS PROVIDED IN PARAGRAPH 568. WHERE AGREEMENT CAN BE REACHED ON ONLY PART OF THE ISSUES, A SETTLEMENT AGREEMENT COVERING THESE ISSUES SHOULD BE NEGOTIATED, SUBJECT TO THE PROVISIONS OF PARAGRAPH 515.3, AND THE REMAINDER OF THE CLAIM SETTLED BY DETERMINATION.

(2) EACH COMPLETE AND FINAL SETTLEMENT, EITHER BY AGREEMENT OR DETERMINATION, WILL INCLUDE NOT ONLY UNREIMBURSED COSTS AND FIXED-FEE BUT ALSO, FOR THE PURPOSE OF FINALITY, REIMBURSED COSTS UNDER THE CONTRACT. UPON FINAL SETTLEMENT ALL TERMINATION INVENTORY MUST BE ACCOUNTED FOR AS PROVIDED IN PARAGRAPH 451.1.

THE TWO PARAGRAPHS REFERRED TO IN SAID PARAGRAPH 562.1 ARE AS FOLLOWS:

515.3 PARTIAL SETTLEMENT UPON FAILURE TO NEGOTIATE COMPLETE SETTLEMENT.-- - (1) WHEN THE CONTRACTING OFFICER AFTER DILIGENT EFFORT HAS NOT BEEN ABLE TO NEGOTIATE A COMPLETE SETTLEMENT OF THE TERMINATION CLAIM, HE MAY NEGOTIATE A PARTIAL SETTLEMENT AGREEMENT COVERING THE ISSUES ON WHICH AGREEMENT CAN BE REACHED WHENEVER---

(A) SUCH ISSUES ARE CLEARLY SEPARABLE, AND

(B) THE AGREEMENT WILL NOT PREJUDICE THE INTEREST OF THE GOVERNMENT IN DISPOSING OF THE UNSETTLED PART OF THE CLAIM.

(2) THE REMAINDER OF THE CLAIM WILL THEN BE SETTLED BY DETERMINATION WITHOUT AGREEMENT.

568 SETTLEMENT BY DETERMINATION.--- WHERE ALL OR ANY PART OF THE TERMINATION CLAIM UNDER A COST-PLUS-A-FIXED-FEE CONTRACT HAS NOT BEEN SETTLED BY AGREEMENT, IT WILL BE DETERMINED BY THE CONTRACTING OFFICER IN ACCORDANCE WITH THE PROVISIONS OF THE CONTRACT GOVERNING THE TYPES OF REIMBURSABLE COSTS, USING THE PROCEDURES FOR A FORMULA SETTLEMENT UNDER A FIXED-PRICE SUPPLY CONTRACT INSOFAR AS APPLICABLE ( PART 5 OF SECTION VII).

WITH RESPECT TO THE CLEARANCE OF EXCEPTIONS TO REIMBURSEMENTS PRIOR TO TERMINATION AND THE PRESENTATION OF RECLAIM VOUCHERS AFTER TERMINATION OF A CONTRACT AND PRIOR TO THE FINAL SETTLEMENT AGREEMENT, PARAGRAPHS 563.4, 563.5 AND 563.6 PROVIDE AS FOLLOWS:

563.4 NOTICE TO GENERAL ACCOUNTING OFFICE OF AUDIT STATUS DATE.--- (1) AS PROMPTLY AS PRACTICABLE AFTER PAYMENT OF THE LAST FORM 1034 COST VOUCHER OTHER THAN RECLAIM VOUCHERS SUBMITTED UNDER PARAGRAPH 561.3, THE CONTRACTING OFFICER (IN THE CASE OF THE NAVY, THE DISBURSING OFFICER) WILL TRANSMIT TO THE GENERAL ACCOUNTING OFFICE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) A NOTICE FIXING AS THE AUDIT STATUS DATE (A) THE DAY 60 DAYS FROM THE DATE OF RECEIPT OF THE NOTICE BY THE GENERAL ACCOUNTING OFFICE OR (B) THE DATE OF RECEIPT OF THE FINAL AUDIT STATUS LETTER, WHICHEVER IS EARLIER. THE NOTICE SHALL CONTAIN THE INFORMATION SET FORTH IN THE STANDARD FORM OF NOTICE WHICH IS REPRODUCED IN PARAGRAPH 985. INSTRUCTIONS FOR THE USE OF THIS FORM ARE PRESCRIBED IN PARAGRAPH 985.1.

(2) IN THE WAR DEPARTMENT, A COPY OF THE NOTICE WILL BE SENT BY THE CONTRACTING OFFICER DIRECTLY TO THE OFFICE OF THE FISCAL DIRECTOR, ASF. IN THE NAVY, COPIES OF THE NOTICE WILL BE SENT TO THE CONTRACTING OFFICER AND COST INSPECTION SERVICE.

563.5 CLEARANCE OF EXCEPTIONS AND RECLAIM VOUCHERS AFTER TERMINATION.--- (1) THE GENERAL ACCOUNTING OFFICE HAS ADVISED THE WAR AND NAVY DEPARTMENTS THAT:

(A) DURING THE FIRST 30 DAYS OF THE AUDIT STATUS PERIOD THE GENERAL ACCOUNTING OFFICE WILL CONTINUE TO ISSUE INFORMAL INQUIRIES BEFORE ISSUING EXCEPTIONS AND DURING THE LAST 30 DAYS OF THE AUDIT STATUS PERIOD ONLY EXCEPTIONS WILL BE ISSUED;

(B) FINAL AUDIT STATUS LETTERS WILL CONTAIN EXCEPTIONS ONLY, WITH THE RESULT THAT INFORMAL INQUIRIES EITHER WILL BE CONVERTED TO EXCEPTIONS AT THE TIME OF ISSUANCE OF THAT LETTER OR WILL BE DEEMED TO HAVE BEEN CLEARED;

(C) UPON RECEIPT OF REPLIES TO EXCEPTIONS THE GENERAL ACCOUNTING OFFICE WILL FURNISH PROMPT NOTICE THAT THE REPLY IS SATISFACTORY OR WILL PROMPTLY ISSUE A REVISED EXCEPTION; AND

(D) NO EXCEPTIONS (OTHER THAN PRO FORMA EXCEPTIONS) WILL BE ISSUED AFTER THE AUDIT STATUS DATE.

(2) IT IS ESSENTIAL THAT THE CONTRACTING OFFICER (IN THE CASE OF THE NAVY, THE COST INSPECTION SERVICE) ANSWER PROMPTLY EXCEPTIONS AND INFORMAL INQUIRIES ISSUED PRIOR TO THE AUDIT STATUS DATE WITH RESPECT TO REIMBURSED COSTS WHICH THE CONTRACTOR DESIRES TO INCLUDE IN THE SETTLEMENT. INFORMAL INQUIRIES SHOULD BE ANSWERED NOT LATER THAN 5 DAYS AFTER THE END OF THE FIRST 30 DAYS OF THE AUDIT STATUS PERIOD. NEITHER INFORMAL INQUIRIES NOR EXCEPTIONS WILL BE ANSWERED BY ADVISING THE GENERAL ACCOUNTING OFFICE AS TO THE DISPOSITION TO BE MADE OF THE PARTICULAR ITEM IN THE FINAL SETTLEMENT, SINCE NO REPRESENTATIVE OF THE WAR OR NAVY DEPARTMENT CAN PROPERLY MAKE SUCH A REPRESENTATION PRIOR TO EXECUTION OF THE FINAL SETTLEMENT AGREEMENT.

(3) IN THE WAR DEPARTMENT, THE ANSWER TO INFORMAL INQUIRIES WILL BE SUBMITTED TO THE GENERAL ACCOUNTING OFFICE FIELD REPRESENTATIVE. IN THE CASE OF EXCEPTIONS, THE CONTRACTING OFFICER WILL (A) SUBMIT THE ORIGINAL OF THE REPLY TO THE FINANCE OFFICER FOR DIRECT TRANSMISSION TO THE OFFICE OF THE FISCAL DIRECTOR, ASF, AND (B) FORWARD SIGNED COPIES TO THE GENERAL ACCOUNTING OFFICE FIELD REPRESENTATIVE AND TO THE CHIEF OF THE SERVICE. IN THE NAVY, THE ANSWER TO INFORMAL INQUIRIES AND EXCEPTIONS WILL BE MADE BY COST INSPECTION SERVICE.

(4) AFTER THE AUDIT STATUS DATE A FINAL ATTEMPT SHOULD BE MADE BY THE WAR AND NAVY DEPARTMENTS TO CLEAR RECLAIM VOUCHERS AND EXCEPTIONS WITH RESPECT TO REIMBURSED COSTS WHICH THE CONTRACTOR DESIRES TO INCLUDE IN THE SETTLEMENT, AND THE GENERAL ACCOUNTING OFFICE FIELD REPRESENTATIVE AND TO THE CHIEF OF THE SERVICE. IN THE NAVY, THE ANSWER TO INFORMAL INQUIRIES AND EXCEPTIONS WILL BE MADE BY COST INSPECTION SERVICE.

(4) AFTER THE AUDIT STATUS DATE A FINAL ATTEMPT SHOULD BE MADE BY THE WAR AND NAVY DEPARTMENTS TO CLEAR RECLAIM VOUCHERS AND EXCEPTIONS WITH RESPECT TO REIMBURSED COSTS WHICH THE CONTRACTOR DESIRES TO INCLUDE IN THE SETTLEMENT, AND THE GENERAL ACCOUNTING OFFICE WILL ADVISE PROMPTLY WHETHER OR NOT SUCH ITEMS ARE CLEARED. EVERY EFFORT SHOULD BE MADE TO EFFECT SUCH CLEARANCE WITHIN A PERIOD OF 30 DAYS, BUT THIS PERIOD MAY BE EXTENDED BY THE CONTRACTING OFFICER (IN THE NAVY, AFTER CONSULTATION WITH COST INSPECTION SERVICE) IF IT APPEARS THAT FURTHER EFFORTS TO CLEAR EXCEPTIONS AND RECLAIM VOUCHERS WILL NOT UNDULY DELAY THE FINAL SETTLEMENT.

563.6 AUTHORITY TO PROCEED WITH FINAL SETTLEMENT AGREEMENT--- (1) SUBJECT TO ANY FINAL EFFORTS TO CLEAR EXCEPTIONS AND RECLAIM VOUCHERS IN ACCORDANCE WITH PARAGRAPH 563.5 (4), THE CONTRACTING OFFICER MAY PROCEED WITH THE FINAL SETTLEMENT AGREEMENT AT ANY TIME AFTER RECEIPT OF THE FINAL AUDIT STATUS LETTER, AND IF THE FINAL AUDIT STATUS LETTER HAS NOT BEEN RECEIVED ON OR BEFORE THE SEVENTH DAY FOLLOWING THE AUDIT STATUS DATE HE MAY PROCEED AT ANY TIME THEREAFTER ON THE BASIS THAT THERE ARE NO OUTSTANDING EXCEPTIONS. THE CONTRACTING OFFICER MAY INCLUDE IN THE FINAL SETTLEMENT AGREEMENT ALL CLAIMS OF THE GOVERNMENT AND THE CONTRACTOR UNDER THE TERMINATED CONTRACT (WHETHER OR NOT AUDITED BY THE GENERAL ACCOUNTING OFFICE) EXCEPT THAT NO AMOUNT WILL BE ALLOWED IN THE SETTLEMENT FOR REIMBURSED COSTS WHICH ARE THE SUBJECT OF--- (A) AN EXCEPTION WHICH IS SHOWN TO BE OUTSTANDING IN A FINAL AUDIT STATUS LETTER RECEIVED ON OR BEFORE THE SEVENTH DAY FOLLOWING THE AUDIT STATUS DATE, AND WHICH REMAINS UNCLEARED; OR

(B) AN EXCEPTION CLEARED BY DEDUCTION OR REFUND AND AS TO WHICH THE CONTRACTOR HAS NOT PRESENTED A RECLAIM VOUCHER; OR

(C) A RECLAIM VOUCHER NOT AUTHORIZED FOR PAYMENT BY THE GENERAL ACCOUNTING OFFICE. (2) THE CONTRACTING OFFICER MAY, IF THE CONTRACTOR SO REQUESTS, REFER ANY COSTS NOT AUTHORIZED FOR INCLUSION IN THE SETTLEMENT AGREEMENT UNDER SUBPARAGRAPH (1) ABOVE TO THE READJUSTMENT DIVISION, ASF, OR THE INDUSTRIAL READJUSTMENT BRANCH, OP AND M," WHO MAY APPLY TO THE UNDER SECRETARY OF THE NAVY FOR INSTRUCTIONS. THE FINAL SETTLEMENT AGREEMENT WILL GIVE EFFECT TO SUCH INSTRUCTIONS.

(3) IN NEGOTIATING THE SETTLEMENT, THE PROVISIONS OF THE PARTICULAR CONTRACT GOVERNING THE TYPES OF REIMBURSABLE COSTS SHALL CONSTITUTE THE BASIS OF NEGOTIATION. THE CONTRACTING OFFICER WILL HAVE FOR HIS CONSIDERATION THE ACCOUNTANT'S REPORT SUBMITTED IN ACCORDANCE WITH PARAGRAPH 567.3. DIFFERENCES OF OPINION BETWEEN THE PARTIES TO THE SETTLEMENT AS TO THE INTERPRETATION OF THE PROVISIONS OF THE CONTRACT AND THEIR APPLICATION TO THE CIRCUMSTANCES OF THE PARTICULAR CASE SHOULD BE SETTLED BY AGREEMENT WHENEVER FEASIBLE. THE NEGOTIATED SETTLEMENT, HOWEVER, WILL NOT BE MADE THE MEANS OF REIMBURSING CONTRACTORS FOR COSTS WHICH UNDER THE PROVISIONS OF THE CONTRACT ARE NOT ALLOWABLE. UNREIMBURSED COST WILL BE ALLOWED WHICH IS IDENTICAL IN NATURE TO AN ITEM OF THE CONTRACTOR'S OWN COSTS (AS DISTINGUISHED FROM REIMBURSEMENT BY THE CONTRACTOR OF A COST INCURRED BY A COST-PLUS-A-FIXED-FEE SUBCONTRACTOR) REQUIRED TO BE EXCLUDED FROM THE SETTLEMENT UNDER THE PROVISIONS OF THIS PARAGRAPH 563.6.

THUS, IT IS SEEN THAT SECTION 13 OF THE CONTRACT SETTLEMENT ACT OF 1944, SUPRA, PROVIDES THAT WHERE ONLY A PART OF A TERMINATION CLAIM IS SETTLED BY AGREEMENT THE AMOUNT DUE ON THE UNSETTLED PART MAY BE DETERMINED THEREAFTER BY THE CONTRACTING AGENCY; THAT UPON WRITTEN DEMAND BY THE CONTRACTOR IT MUST BE SO DETERMINED; THAT SUCH DETERMINATION IS MADE FINAL AND CONCLUSIVE BY THE PROVISIONS OF SECTION 6 OF THE ACT. IT IS SEEN, ALSO, THAT WHILE THE JOINT TERMINATION REGULATION PROVIDES IN PARAGRAPHS 563.4, 563.5 AND 563.6, QUOTED ABOVE, FOR THE PRESENTATION OF RECLAIM VOUCHERS TO THE GENERAL ACCOUNTING OFFICE PRIOR TO THE FINAL SETTLEMENT AGREEMENT AND FOR THE EXCLUSION FROM SUCH SETTLEMENT AGREEMENT OF A "RECLAIM VOUCHER NOT AUTHORIZED FOR PAYMENT BY THE GENERAL ACCOUNTING OFFICE," NO PROVISION IS MADE THEREIN FOR THE PRESENTATION OF RECLAIM VOUCHERS TO THE GENERAL ACCOUNTING OFFICE SUBSEQUENT TO NEGOTIATION OF THE SETTLEMENT AGREEMENT BUT, ON THE OTHER HAND, UNDER PARAGRAPH 563.6 (2) ANY COST NOT AUTHORIZED FOR INCLUSION IN THE AGREEMENT MAY BE REFERRED, UPON REQUEST OF THE CONTRACTOR, TO THE READJUSTMENT DIVISION, ARMY SERVICE FORCES, WHICH MAY APPLY TO THE UNDER SECRETARY OF WAR FOR INSTRUCTIONS. IT IS SEEN FURTHER THAT WHERE, AS HERE, AFTER A FINAL SETTLEMENT AGREEMENT HAS BEEN ENTERED INTO, SETTLING THE TERMINATION CLAIM IN WHOLE OR IN PART, THE REGULATION PROVIDES THAT THE UNSETTLED PART MUST BE SETTLED BY DETERMINATION. PARAGRAPHS 515.3, 562.1 AND 568.

ACCORDINGLY, SINCE, WITH THE EXCEPTION OF THIS AND SEVERAL OTHER ITEMS, A FINAL SETTLEMENT AGREEMENT HAS BEEN ENTERED INTO SETTLING THE TERMINATION CLAIM UNDER THE INSTANT CONTRACT, IT WOULD APPEAR THAT, IN CONFORMITY WITH THE ABOVE-QUOTED PROVISIONS OF THE CONTRACT SETTLEMENT ACT AND THE JOINT TERMINATION REGULATION PROMULGATED THEREUNDER, CLAIM FOR THE EXCEPTED ITEMS OF COST IS FOR SETTLEMENT BY DETERMINATION, SUBJECT TO SUCH FURTHER ADMINISTRATIVE REVIEW AS MAY BE REQUIRED AND, THUS, IS NOT A MATTER PROPERLY BEFORE THIS OFFICE FOR DECISION.