General
FAR 49.501 requires standard termination clauses in most contracts, except for certain simplified acquisitions, and allows agencies to authorize special clauses when justified and compliant.
Overview
FAR 49.501 outlines the general rules regarding the use of principal contract termination clauses in federal contracts. It establishes that this subpart prescribes the standard termination clauses to be included in most contracts, except those using the clause at 52.213-4 for simplified acquisitions (other than commercial products and services). The section also allows agencies to authorize special purpose termination clauses when appropriate, provided they are consistent with the overall FAR requirements. This ensures that termination provisions are tailored to the contract type and acquisition method, while maintaining regulatory compliance.
Key Rules
- Principal Termination Clauses
- Standard termination clauses must be used in most contracts, as prescribed by this subpart.
- Exclusion for Simplified Acquisitions
- Contracts using FAR 52.213-4 (Terms and Conditions—Simplified Acquisitions) are excluded from these requirements.
- Special Purpose Clauses
- Agencies may authorize special purpose termination clauses if they align with FAR policies and are justified by the contract circumstances.
Responsibilities
- Contracting Officers: Ensure the correct termination clauses are included in contracts and seek agency approval for any special purpose clauses.
- Contractors: Review and understand the termination clauses applicable to their contracts.
- Agencies: Oversee and authorize the use of special purpose clauses when necessary.
Practical Implications
- This section ensures consistency in termination provisions across most federal contracts, reducing ambiguity and risk.
- Contractors must be aware of which termination clauses apply to their contracts, especially when simplified acquisition procedures are used.
- Agencies have flexibility to address unique contract needs through special clauses, but must maintain compliance with FAR.