13.302-4 Termination or cancellation of purchase orders
Source: FAR 13.302-4 on acquisition.gov
FAR 13.302-4 requires contracting officers to follow specific procedures for terminating or canceling purchase orders, depending on whether the order was accepted in writing and the type of product or service involved.
Overview
FAR 13.302-4 outlines the procedures for terminating or canceling purchase orders, distinguishing between those that have been accepted in writing by the contractor and those that have not. For accepted purchase orders, terminations must follow the procedures applicable to the type of product or service—either commercial or non-commercial. For unaccepted purchase orders, the contracting officer must notify the contractor in writing and seek written acceptance of the cancellation. If the contractor agrees and claims no costs, the order is simply canceled. If the contractor objects or claims costs, the process reverts to formal termination procedures. This section ensures that both parties understand their rights and obligations when a purchase order is ended, minimizing disputes and ensuring compliance with federal regulations.
Key Rules
- Termination of Accepted Purchase Orders
- If a contractor has accepted a purchase order in writing, termination must follow FAR 12.403 and 52.212-4(l)/(m) for commercial items, or FAR Part 49/52.213-4 for non-commercial items.
- Cancellation of Unaccepted Purchase Orders
- If the contractor has not accepted the order in writing, the contracting officer must notify the contractor in writing and request written acceptance of the cancellation. If the contractor objects or claims costs, formal termination procedures apply.
Responsibilities
- Contracting Officers: Must follow the correct termination or cancellation process based on the status of the purchase order and type of item/service.
- Contractors: Must respond to cancellation notices and may claim costs if performance has begun.
- Agencies: Ensure proper documentation and compliance with applicable FAR parts.
Practical Implications
- This section clarifies the distinction between termination and cancellation, reducing confusion and potential disputes.
- Contractors should be aware of their rights to claim costs if performance has started, even if the order was not formally accepted.
- Proper documentation and communication are critical to compliance and risk mitigation.
(a) If a purchase order that has been accepted in writing by the contractor is to be terminated, the contracting officer shall process the termination in accordance with-
(1) 12.403 and 52.212-4(l) or (m) for commercial products and commercial services; or
(2) part 49 or 52.213-4 for other than commercial products or commercial services.
(b) If a purchase order that has not been accepted in writing by the contractor is to be canceled, the contracting officer shall notify the contractor in writing that the purchase order has been canceled, request the contractor’s written acceptance of the cancellation, and proceed as follows:
(1) If the contractor accepts the cancellation and does not claim that costs were incurred as a result of beginning performance under the purchase order, no further action is required (i.e., the purchase order shall be considered canceled).
(2) If the contractor does not accept the cancellation or claims that costs were incurred as a result of beginning performance under the purchase order, the contracting officer shall process the action as a termination prescribed in paragraph (a) of this subsection.