The Contractor should ensure that it includes all termination inventory – any property acquired for the performance of the terminated contract and properly allocated to the terminated contract – in the inventory disposal plans submitted to the Government. 87 The person responsible for the customs clearance of the plant is the authorized representative of the CO responsible for the inspection, redistribution and disposal of the contractor`s inventory. 88 If the contractor or PCO accepts the inventory, the government has purchased it and cannot claim that the inventory does not fall within the scope of the contract. 89 Dismissal on grounds of expediency is «the exercise of the government`s right to terminate, in whole or in part, the performance of work under a contract where it is in the government`s interest to do so.» 5 The purpose of the «termination for convenience» clause in a government contract is to allow the government to exercise that right to terminate the contract without incurring liability for future benefit. 6 Anticipated profit is the profit that a contractor would have earned from the cancelled work. Under the Private Sector Act, a seller`s damages for termination include an advance profit, 7, but this is not the case when the government terminates a contract for convenience. The «Termination for Convenience» clause limits the recovery of profits by the Contractor to «Profit from the Work Performed». 8 The contract representative shall hold a conference only if it facilitates the termination process. A meeting can also be arranged with the contractor to discuss the upcoming termination. Following the meeting, the contract may be amended to correct minor errors in the termination; add additional data or instructions; or cancel the notice in its entirety if it is determined that the completed items were completed or shipped prior to receipt of the notice by the Contractor.

With the written consent of the Contractor, the Contractual Partner may reinstate the terminated portion of a Contract in whole or in part by modifying the notice of termination. Where the reinstatement of part of the terminated contract is appropriate, reinstatement must be based on a written statement that the circumstances clearly indicate the need for the terminated positions; and reintegration is beneficial to the government. (e) Termination for convenience constitutes a breach if the government entered into the contract without intent to perform its obligations. 45 Substitute II (September 1996). If the contract is with an agency of the U.S. government or with state, local or foreign governments or their agencies, and the contract agent determines that the obligation to pay interest on overpayments is inappropriate, delete paragraph (m)(2) of the basic clause. If late termination is contemplated, the contracting officer must decide what type of termination action to take and consider the following factors: The agent exercises the government`s right to terminate a commercial property contract, either for convenience or for cause, only if such termination would be in the best interest of the government. The contract agent should consult a lawyer before dismissal for cause. A contractor whose fixed-price contract is terminated for the convenience of government is entitled to recover (a) reimbursable costs incurred in performing the work, (b) reasonable profit for the work performed, (c) reasonable handling costs, and (d) certain «ongoing» costs (after termination). 13 A contractor is not entitled to a refund of a profit from the billing fee. 14 Traditional government contracts use a cost-based formula to calculate termination costs.

Far part 12 commercial item contracts use a modified price-based formula. If there is not enough time for a cure, the subcontractor usually sends a notification of the evidence. This notice asks you to show why your contract should not be terminated due to late payment. It ensures that you understand your difficult situation and your response can be used to assess whether the circumstances warrant standard measures. Termination for convenience («T4C») is the government`s unilateral contractual right to terminate a contract in whole or in part without having to pay damages, even if the contractor fully complies with its contractual obligations. Termination for convenience is defined in the FAR as the exercise of the government`s right to terminate all or part of the performance of work under a contract if it is in the interest of the government. After termination, the government is required to enter into a fair and timely agreement with you. In general, the agreement takes the form of an agreement negotiated between the parties.

The idea is to agree on an amount that will pay you fully and fairly for the work you have done and for any preparations you have made for the terminated part of the contract. .