Overview
This section defines the foundational framework for contract terminations, outlining the authority of contracting officers to end contracts for convenience or default and the subsequent duties of both parties during the settlement process.
Key Rules
- Termination Authority: Establishes the Contracting Officer’s (CO) power to terminate contracts either partially or entirely based on government needs or contractor performance.
- Post-Termination Duties: Mandates specific responsibilities for both the contractor and the CO immediately following the issuance of a termination notice.
- Settlement Framework: Provides the general procedures for negotiating and finalizing settlement agreements to close out terminated contracts.
- Cross-Subpart Integration: Directs users to Subparts 49.2 and 49.3 for specific fixed-price and cost-reimbursement convenience principles, and Subpart 49.4 for default-specific regulations.
Practical Implications
- This section acts as a regulatory roadmap, ensuring that the transition from an active contract to a terminated state follows a standardized legal and administrative process.
- Contractors must immediately shift from performance to "wind-down" mode upon notice, as this subpart triggers specific compliance obligations and cost-recovery procedures.