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The TCO shall include the following information in the settlement negotiation memorandum. Contractors and subcontractors are encouraged to use this format appropriately modified for subcontract settlements submitted for review and approval.
(a) General information.

(1) Identification.

(i) Name and address of the contractor and any pertinent affiliation between prime contractors and subcontractors relative to the overall settlement.
(ii) Names and titles of contractor and Government personnel who participated in the negotiation.

(2) Description of terminated contract.

(i) Contract number
(ii) Date of award;
(iii) Contract type;
(iv) General description of contract items;
(v) Total contract price; and
(vi) Applicable contract termination provisions and clause.

(3) Termination notice.

(i) Date of the termination notice;
(ii) Effective date of termination;
(iii) Scope and nature of termination (complete or partial);
(iv) Items terminated;
(v) Unit prices;
(vi) Total price of items terminated for fixed-price contracts or the estimated cost and fee applicable to items terminated for cost-reimbursement type contracts;
(vii) Whether the termination notice was amended and, if so, why;
(viii) Whether the contractor stopped work on the termination effective date (if it did not, furnish details) and whether subcontracts were terminated promptly;
(ix) Any redirection of common items and return of goods to the contractor's suppliers; and
(x) Extent of contract performance and timely deliveries by the contractor.

(b) Contractor's settlement proposal.

(1) Date and amount. Date and location where the claim was filed and its gross amount (if interim settlement proposals were filed, information shall be furnished for each claim).
(2) Basis of claim. E.g., inventory, total cost, or other basis, including an explanation of any approvals granted in connection with submission on other than an inventory basis.
(3) Examination of proposal. Types of reviews made and by whom (audit, engineering, legal, or other).

(c) Tabular summary of contractor's claim and the settlement. The cost elements/items, the amounts claimed, the Government recommended position (including auditor, field, and technical personnel recommendations), and the negotiated settlement amounts. This summary shall include, if appropriate, previously reimbursed and unreimbursed costs applicable to the prime contractor and subcontractor, previous profit/fees paid and unpaid; settlement cost less disposal credit or other credits, and a recapitulation of previous settlements. The summary of the negotiated settlement shall include the amount claimed and allowed for contractor and/or subcontractor changes, disposal, prior payment credits, and contract price.
(d) Settlement narrative summary.

(1) Contractor's cost.
(2) Profit/Fee.
(3) Settlement expenses not included in the audit.
(4) Number and dollar amount of any subcontractor settlements approved by the TCO and concluded by the contractor under delegation of authority.
(5) Total amount of any partial payments.
(6) Total of unliquidated progress or advance payments.
(7) Claims of the Government against the contractor included in settlement agreement reservations.
(8) Assignments, including the name and address of each assignee.
(9) Disposal credits.
(10) Status of plant clearance actions and all inventory sold, retained, or otherwise properly disposed of in accordance with applicable plant clearance regulations, including a consolidated closing plant clearance report, if applicable.
(11) Status of Government property accountability.
(12) Disposition of any special tooling, if applicable.
(13) Proposed reservations of rights to the Government or to the contractor.

(e) Recommendation. Amount of the gross settlement recommended and TCO statement that it is fair and reasonable to the Government and the contractor.
(f) TCO Signature and date.