---
kind: "section"
citation: "48 C.F.R. § 49.403"
title: "48"
number: "49.403"
heading: "Termination of cost-reimbursement contracts for default."
url: "https://uscodex.org/cfr/48/49.403"
---

# §49.403. Termination of cost-reimbursement contracts for default.

- (a) The right to terminate a cost-reimbursement contract for default is provided for in the Termination for Default or for Convenience of the Government clause at 52.249-6. A 10-day notice to the contractor before termination for default is required in every case by the clause.
- (b) Settlement of a cost-reimbursement contract terminated for default is subject to the principles in subparts [49.1](/cfr/48/subpart49.1.md) and [49.3](/cfr/48/subpart49.3.md) the same as when a contract is terminated for convenience, except that—
  - (1) The costs of preparing the contractor's settlement proposal are not allowable (see subparagraph (h)(3) of the clause); and
  - (2) The contractor is reimbursed the allowable costs, and an appropriate reduction is made in the total fee, if any, (see subparagraph (h)(4) of the clause).
- (c) The contracting officer shall use the procedures in 49.402 to the extent appropriate in considering the termination for default of a cost-reimbursement contract. However, a cost-reimbursement contract does not contain any provision for recovery of excess repurchase costs after termination for default (but see paragraph (g) of the clause at 52.246-3 with respect to failure of the contractor to replace or correct defective supplies).

## Notes

### Amendments

[48 FR 42447, Sept. 19, 1983, as amended at 61 FR 39222, July 26, 1996]

### Authority

Authority: 40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113.

### Source

Source: 48 FR 42447, Sept. 19, 1983, unless otherwise noted.

### Amendments

[48 FR 42447, Sept. 19, 1983, as amended at 61 FR 39222, July 26, 1996]