8.406-5
Termination for the Government’s convenience
Ordering activity contracting officers must attempt a no-cost settlement before terminating FSS orders for convenience and follow FAR 12.403 procedures, while only schedule contracting officers can terminate the entire schedule contract.
Overview
FAR 8.406-5 outlines the procedures for terminating orders placed under Federal Supply Schedules (FSS) for the Government’s convenience. It clarifies the roles of ordering activity contracting officers and schedule contracting officers in the termination process. The regulation requires that terminations for convenience follow the procedures in FAR 12.403 and encourages contracting officers to seek a "no cost" settlement with the contractor before proceeding with termination. Only the schedule contracting officer has the authority to modify the overall schedule contract for convenience terminations, while ordering activity contracting officers may terminate individual orders.
Key Rules
- Authority to Terminate Orders
- Ordering activity contracting officers can terminate individual orders for the Government’s convenience, but must follow FAR 12.403 procedures.
- No Cost Settlement
- Before terminating, the contracting officer should attempt to reach a "no cost" settlement with the contractor.
- Schedule Contract Termination
- Only the schedule contracting officer can modify or terminate the entire schedule contract for the Government’s convenience.
Responsibilities
- Contracting Officers: Must attempt a no-cost settlement before termination and follow FAR 12.403 for procedures; only schedule contracting officers can terminate the schedule contract itself.
- Contractors: Should cooperate in settlement discussions and comply with termination procedures.
- Agencies: Must ensure proper authority is exercised and correct procedures are followed for terminations.
Practical Implications
- This section ensures clear authority and process for terminating orders under FSS contracts, minimizing disputes and costs. Contracting officers must be diligent in seeking no-cost settlements and following prescribed procedures, while contractors should be prepared for potential terminations and settlement negotiations.