49.102 Notice of termination
Source: FAR 49.102 on acquisition.gov
All contract terminations must be communicated in writing with clear instructions, proper distribution, and documented confirmation of receipt to ensure compliance and protect all parties.
Overview
FAR 49.102 outlines the procedures and requirements for issuing a notice of termination for government contracts, whether for convenience or default. The regulation mandates that all terminations must be communicated in writing, with specific methods for delivery and confirmation of receipt. The notice must include essential information such as the reason for termination, effective date, extent, special instructions, and guidance for workforce impact if applicable. The contracting officer is responsible for distributing copies to relevant parties and may amend or rescind the notice under certain conditions. Additionally, terminated contracts may be reinstated if justified and agreed upon by both parties.
Key Rules
- Written Notice Requirement
- All contract terminations must be issued in writing, with confirmation of receipt by the contractor.
- Notice Content
- The notice must specify the reason, effective date, extent, special instructions, and workforce impact steps if significant reductions are expected.
- Distribution of Notice
- Copies must be sent to the contractor, contract administration office, and any known assignee, guarantor, or surety.
- Amendment and Rescission
- The contracting officer may amend the notice to correct errors, add information, or rescind if items were completed or shipped before receipt.
- Reinstatement
- Terminated contracts can be reinstated if both parties agree and it is advantageous to the government.
Responsibilities
- Contracting Officers: Must issue, distribute, and amend termination notices as required, and document reinstatement decisions.
- Contractors: Must acknowledge receipt and follow instructions in the notice, including steps to minimize workforce impact.
- Agencies: Ensure oversight of termination procedures and proper documentation.
Practical Implications
- Ensures clear, documented communication of contract terminations.
- Protects both government and contractor interests by specifying procedures and required information.
- Common pitfalls include failure to confirm receipt, incomplete notice content, or improper distribution of copies.
(a) General. The contracting officer shall terminate contracts for convenience or default only by a written notice to the contractor (see 49.601). The notice of termination may be expedited by means of electronic communication capable of providing confirmation of receipt by the contractor. When the notice is mailed, it shall be sent by certified mail, return receipt requested. When the contracting office arranges for hand delivery of the notice, a written acknowledgment shall be obtained from the contractor. The notice shall state-
(1) That the contract is being terminated for the convenience of the Government (or for default) under the contract clause authorizing the termination;
(2) The effective date of termination;
(3) The extent of termination;
(4) Any special instructions; and
(5) The steps the contractor should take to minimize the impact on personnel if the termination, together with all other outstanding terminations, will result in a significant reduction in the contractor’s work force (see paragraph (g) of the notice in 49.601-2). If the termination notice is by telegram, include these "steps" in the confirming letter or modification.
(b) Distribution of copies. The contracting officer shall simultaneously send the termination notice to the contractor, and a copy to the contract administration office and to any known assignee, guarantor, or surety of the contractor.
(c) Amendment of termination notice. The contracting officer may amend a termination notice to-
(1) Correct nonsubstantive mistakes in the notice;
(2) Add supplemental data or instructions; or
(3) Rescind the notice if it is determined that items terminated had been completed or shipped before the contractor’s receipt of the notice.
(d) Reinstatement of terminated contracts. Upon written consent of the contractor, the contracting office may reinstate the terminated portion of a contract in whole or in part by amending the notice of termination if it has been determined in writing that-
(1) Circumstances clearly indicate a requirement for the terminated items; and
(2) Reinstatement is advantageous to the Government.