52.249-1 Termination for Convenience of the Government (Fixed-Price) (Short Form)
Source: FAR 52.249-1 on acquisition.gov
FAR 52.249-1 allows the Government to terminate fixed-price contracts for convenience, with compensation and obligations determined by FAR Part 49.
Overview
FAR 52.249-1 provides a short-form clause for the Government's right to terminate fixed-price contracts for its convenience. This clause allows the Contracting Officer to terminate all or part of a contract by written notice when it serves the Government’s interest. Upon termination, the rights and obligations of both parties, including contractor compensation, are governed by FAR Part 49 as it existed on the contract date. An Alternate I version applies to contracts for dismantling, demolition, or removal of improvements, specifying that any property title vested in the contractor reverts to the Government upon termination, except for property sold or removed by the contractor.
Key Rules
- Termination for Convenience
- The Government may terminate a fixed-price contract, in whole or in part, at any time by written notice if it is in its interest.
- Compensation and Obligations
- Upon termination, both parties’ rights and compensation are determined by FAR Part 49.
- Alternate I for Demolition/Removal Contracts
- For contracts involving dismantling, demolition, or removal, property title reverts to the Government upon termination, with exceptions for bona fide sales or property removed from the site.
Responsibilities
- Contracting Officers: Must issue written notice for termination and ensure compliance with FAR Part 49 procedures.
- Contractors: Must comply with termination instructions and understand compensation and property disposition rules under FAR Part 49.
- Agencies: Oversee proper application of termination procedures and ensure fair compensation.
Practical Implications
- This clause provides flexibility for the Government to end contracts when necessary, minimizing risk and cost.
- Contractors should be prepared for possible termination and understand how compensation is calculated under FAR Part 49.
- Common issues include disputes over compensation and property rights, especially in demolition/removal contracts.
As prescribed in 49.502(a)(1), insert the following clause:
Termination for Convenience of the Government (Fixed-Price) (Short Form) (Apr 1984)
The Contracting Officer, by written notice, may terminate this contract, in whole or in part, when it is in the Government’s interest. If this contract is terminated, the rights, duties, and obligations of the parties, including compensation to the Contractor, shall be in accordance with part 49 of the Federal Acquisition Regulation in effect on the date of this contract.
(End of clause)
Alternate I (Apr 1984). If the contract is for dismantling, demolition, or removal of improvements, designate the basic clause as paragraph (a) and add the following paragraph (b):
(b) Upon receipt of the termination notice, if title to property is vested in the Contractor under this contract, it shall revest in the Government regardless of any other clause of the contract, except for property that the Contractor (a) disposed of by bona fide sale or (b) removed from the site.