Allows government to terminate contract for convenience without cause at any time.
Applicability: Included in all government contracts.
Key Requirements
Understand government can terminate your contract without reason
Plan to cease work upon receiving termination notice
Document and preserve all work performed to date
Submit settlement proposal for termination costs and profit
Common Issues & Pitfalls
Not planning financially for potential contract termination
Failing to document costs attributable to terminated work
Not submitting settlement proposal timely after termination
Underestimating allowable termination costs (severance, settlement, restocking)
Contractor Guidance for Your Bid
Termination for convenience is common in federal contracts. Government can terminate anytime, for any reason. Don't sign a fixed-price contract without understanding your termination cost recovery limits. Make sure your pricing includes reasonable profit margin and plan financially for partial performance. Maintain clear documentation of all costs if/when termination occurs.
Related FAR Clauses
Frequently Asked Questions
What are the key requirements for FAR 52.249-1: Termination for Convenience of the Government?
+
Allows government to terminate contract for convenience without cause at any time. Included in all government contracts.
When does FAR 52.249-1 apply to a federal contract?
+
Included in all government contracts.
What are the most common compliance issues with FAR 52.249-1?
+
Not planning financially for potential contract termination Failing to document costs attributable to terminated work Not submitting settlement proposal timely after termination Underestimating allowable termination costs (severance, settlement, restocking)
How should contractors approach FAR 52.249-1 in their proposals?
+
Termination for convenience is common in federal contracts. Government can terminate anytime, for any reason. Don't sign a fixed-price contract without understanding your termination cost recovery limits. Make sure your pricing includes reasonable profit margin and plan financially for partial performance. Maintain clear documentation of all costs if/when termination occurs.
What related FAR clauses should contractors review alongside FAR 52.249-1?
+
Contractors reviewing FAR 52.249-1 should also study related clauses: 52-249-2, 52-249-8. Understanding how these clauses interact helps avoid compliance gaps that can trigger contract disputes or disqualify bids.
What happens if a contractor fails to comply with FAR 52.249-1?
+
Non-compliance with FAR 52.249-1 can result in contract termination for default, withholding of payments, debarment proceedings, or False Claims Act liability. Contracting officers typically issue a cure notice before termination. Contractors should consult with a contract attorney if they receive a cure notice related to this clause.