DoD Seal DoD 50 Year Seal

OFFICE OF THE SECRETARY OF DEFENSE

1000 DEFENSE PENTAGON
WASHINGTON, DC 20301-1000
November 15, 1996

 
ACQUISITION AND
 TECHNOLOGY

DP(DAR)

                                                          In reply refer to
                                                          DFARS Case: 96-D320
                                                          D. L. 96-021



MEMORANDUM FOR	DIRECTORS OF DEFENSE AGENCIES
                    DEPUTY FOR ACQUISITION AND BUSINESS MANAGEMENT,
                      ASN(RD&A)/ABM
                    DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE
                      (CONTRACTING), SAF/AQC
                    DIRECTOR, PROCUREMENT POLICY, ASA(RD&A)/SARD-PP
                    DEPUTY DIRECTOR (ACQUISITION), DEFENSE LOGISTICS
                      AGENCY



SUBJECT:    Notice of Termination


     We have amended the Defense Federal Acquisition Regulation Supplement
(DFARS) to implement Section 824 of the National Defense Authorization Act
for Fiscal Year 1997 (Pub. L. 104-201).  Section 824 streamlines the statutory
requirements for providing notification to contractors regarding contract
terminations or reductions that could occur as a result of reduced funding
levels under major defense programs.


     The attached interim DFARS rule is effective immediately and will be
included in a future Defense Acquisition Circular.







                                                    /s/

                                             Eleanor R. Spector
                                             Director, Defense Procurement

Attachment

cc: DSMC, Ft. Belvoir


DFAR Case 96-D320, Notice of Termination
Interim Rule

PART 249 -- TERMINATION OF CONTRACTS

* * * * *

SUBPART 249.7 -- SPECIAL TERMINATION REQUIREMENTS

* * * * *

249.7003 Notification of [anticipated contract] termination[s] or reduction[s].

(a) Section 1372 of the National Defense Authorization Act for Fiscal Year 1994 (Pub.. L [.] 103-160) [and Section 824 of the National Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201)], [are] intended to help establish benefit eligibility under the Job Training Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD contractors and subcontractors adversely affected by termination or substantial reductions in major defense programs.

(b) Departments and agencies are responsible for establishing procedures to:

(1)[Identify which contracts (if any) under major defense programs will be terminated or substantially reduced] as a result of [the funding levels provided in] an appropriations act.

(2) Within 60 days of [the] enactment [of such an act], provide notice of the anticipated termination [of] or [substantial] reduction [in the funding of affected contracts]-

(i)[Directly] to the Secretary of Labor; and

[(ii)] Through the contracting officer to each prime contractor

[(c)] Use the clause at 252.249-7002, Notification of [Anticipated Contract] Termination or Reduction, in all contracts under a major defense program.

* * * * *

PART 252 -- SOLICITATION PROVISIONS AND CONTRACT CLAUSES

* * * * *

SUBPART 252.2 -- TEXT OF PROVISIONS AND CLAUSES

* * * * *

252.249-7002 Notification of [Anticipated Contract] Termination or Reduction.
As Prescribed in 249.7003[(c)], use the following clause:

NOTIFICATION OF [ANTICIPATED CONTRACT] TERMINATION OR REDUCTION [DEC 1996])

(a)Definitions.

"Major defense program" means a program that is carried out to produce or acquire a major system (as defined in 10 U.S.C.2302[(5)]) (see also [DoD 5000.2-R, Mandatory Procedures for Major Defense Acquisition Programs (MDAPs) and Major Automated Information System (MAIS) Acquisition Programs]).

"Substantial reduction" means a reduction of 25 percent or more in the total dollar value of [funds obligated by the] contracts.

(b) Section 1372 of the National Defense Authorization Act for Fiscal Year 1994 [and Section 824 of the National Defense Authorization Act for Fiscal Year 1997 (Pub. L. 104-201)] [are] intended to help establish benefit eligibility under the Job Training Partnership Act (29 U.S.C. 1661 and 1662) for employees of DoD contractors and subcontractors adversely affected by [contract] termination[s] or substantial reductions [under] major defense programs.

(c) Notice to employees and state and local officials.
Within two weeks after the Contracting Officer notifies the Contractor that a [contract funding will be] terminated or substantially reduced, the Contractor shall provide notice of such anticipated termination or reduction to -

(1) Each employee representative of the Contractor's employees whose work is [directly] related to the [defense contract]; or

(2) If there is no such representative, each such employee;

(3) The State dislocated worker unit or office described in section 311(b)(2) of the Job Training Partnership Act (29 U.S.C. 1661(b)(2)); and

(4) The chief elected official of the unit of general local government within which the adverse effect may occur.

(d) Notice to subcontractors.
[N]ot later than [60] days after the Contractor receives the Contracting Officer's notice of the [anticipated] termination or reduction, the Contractor shall -

(1) Provide notice of the [anticipated] termination or reduction to each first-tier subcontractor with a subcontract of $500,000 or more; and

(2) Require that each such subcontractor -

(i) Provide notice to each of its subcontractors with a subcontract of $100,000 or more; and

(ii) Impose a similar notice and flowdown requirement to subcontractors with subcontracts of $100,000 or more.

(e) The notice provided an employee under paragraph (c) of this clause shall have the same effect as a notice of termination to the employee for the purposes of determining whether such employee is eligible for training, adjustment assistance, and employment services under section 325 or 325A of the Job Training Partnership Act 29 U.S.C. 1662d, 1662d-1). If the Contractor has specified that the [acticipated contract] termination or reduction is not likely to result in plant closure or mass layoff, as defined in 29 U.S.C. 2101, the employee shall be eligible only for services under section 314(b) and paragraphs (1) through (14), (16), and (18) of section 314(c) of the Job Training Partnership Act (29 U.S.C. 1661c(b) and paragraphs (1) through (14, (16), and (18) of section 1661c(c)).

(End of clause)