52.249-3
Termination for Convenience of the Government (Dismantling, Demolition, or Removal of Improvements)
FAR 52.249-3 provides a detailed process for contractors to follow when the Government terminates a dismantling, demolition, or removal contract for convenience, ensuring fair compensation and orderly transition.
Overview
FAR 52.249-3 outlines the procedures and requirements when the Government terminates, for its convenience, contracts specifically for dismantling, demolition, or removal of improvements. This clause provides a structured process for both the Government and contractors to follow, ensuring orderly cessation of work, disposition of property, and fair compensation for work performed and costs incurred up to the point of termination.
Key Rules
- Government’s Right to Terminate
- The Government may terminate all or part of the contract at any time for its convenience, with notice to the contractor specifying the extent and effective date.
- Contractor Obligations Upon Termination
- Contractors must immediately stop work, terminate related subcontracts, protect property, and follow all directions from the Contracting Officer regarding inventory, property, and records.
- Inventory and Settlement
- Contractors must submit termination inventory schedules within 120 days and a final settlement proposal within one year, unless extended.
- Compensation and Deductions
- Payment is based on work performed, settlement costs, and allowable profit, but cannot exceed the contract price minus prior payments and the value of uncompleted work. Deductions include advance payments and claims against the contractor.
- Appeals and Records
- Contractors may appeal settlement determinations, provided they meet proposal deadlines, and must retain all related records for three years after final settlement.
Responsibilities
- Contracting Officers: Issue termination notices, direct disposition of property, approve settlements, and ensure compliance with FAR cost principles.
- Contractors: Cease work, manage subcontracts, submit required documentation, protect property, and maintain records.
- Agencies: Oversee the process, ensure fair settlements, and enforce record-keeping and reporting requirements.
Practical Implications
- This clause ensures that both parties have clear procedures to follow in the event of a termination for convenience, minimizing disputes and financial risk. Contractors must be diligent in documentation, timely submissions, and compliance with all directions to secure fair compensation and avoid forfeiture of rights.