52.249-4
Termination for Convenience of the Government (Services) (Short Form)
FAR 52.249-4 allows the Government to terminate certain fixed-price service contracts at its convenience, limiting contractor compensation to services performed before termination.
Overview
- FAR 52.249-4 provides a short-form clause for the Government to terminate fixed-price service contracts for its convenience. This clause is used when contractors are not expected to incur significant costs in preparing for or performing the contract, and thus, termination settlements are limited to payment for services actually rendered before termination.
Key Rules
- Termination Authority
- The Contracting Officer may terminate the contract, in whole or in part, at any time by written notice if it is in the Government’s interest.
- Limitation of Government Liability
- Upon termination, the Government is only liable for payment for services performed up to the effective date of termination, as specified in the contract’s payment provisions.
Responsibilities
- Contracting Officers: Must provide written notice of termination and ensure the clause is included in applicable contracts.
- Contractors: Must cease work upon receipt of termination notice and submit invoices only for services rendered up to the termination date.
- Agencies: Ensure proper use of the clause and compliance with FAR 49.502(c) criteria.
Practical Implications
- This clause streamlines the termination process for certain service contracts, reducing administrative burden and limiting settlement costs. Contractors should be aware that they are only entitled to payment for completed services, not for unperformed work or preparation costs. Misunderstanding this limitation can lead to disputes or denied claims for additional compensation.