Reservations.

(a) The TCO shall— (1) Reserve in the settlement agreement any rights or demands of the parties that are excepted from the settlement; (2) Ensure that the wording of the reservation does not create any rights for the parties beyond those in existence before execution of the settlement agreement; (3) Mark each applicable settlement agreement with “This settlement agreement contains a reservation” and retain the contract file until the reservation is removed; (4) Ensure that sufficient funds are retained to cover complete settlement of the reserved items; and (5) At the appropriate time, prepare a separate settlement of reserved items and include it in a separate settlement agreement. (b) A recommended format for settlement of reservations appears in 49.603-9.