Overview
FAR 49.102 mandates that all contract terminations for convenience or default be issued via formal written notice, detailing the scope, effective date, and specific instructions for the contractor. It establishes the procedural requirements for delivering, amending, and potentially reinstating terminated contracts to ensure legal and administrative clarity.
Key Rules
- Form of Notice: Must be in writing and delivered via electronic communication (with confirmation), certified mail (return receipt requested), or hand delivery (with written acknowledgment).
- Mandatory Content: The notice must specify the type of termination (convenience or default), the authorizing clause, the effective date, the extent of the termination (partial or complete), and instructions for minimizing personnel impact if workforce reductions are expected.
- Distribution Requirements: The Contracting Officer must simultaneously notify the contractor, the contract administration office, and any known assignees, guarantors, or sureties.
- Amendments: Notices can be amended to correct minor errors, add instructions, or rescind the termination if the items were already shipped prior to the contractor receiving the notice.
- Reinstatement: A terminated contract may be reinstated only with the contractor's written consent and a formal determination that the requirement still exists and reinstatement is advantageous to the Government.
Practical Implications
- Establishes a Legal Timeline: The formal notice creates a definitive "stop-work" point, which is critical for calculating termination settlement costs and preventing the government from incurring further liabilities.
- Risk Mitigation: By requiring notification of sureties and assignees, the regulation ensures all parties with a financial interest in the contract are aware of the performance stoppage, reducing the risk of third-party legal disputes.