FAR 13.302-4—Termination or cancellation of purchase orders.
Plain-English Summary
FAR 13.302-4 explains how contracting officers must end purchase orders under simplified acquisition procedures, and it draws a critical distinction between a purchase order that has been accepted in writing by the contractor and one that has not. It covers two different actions: termination of an accepted purchase order and cancellation of an unaccepted purchase order. For accepted orders, the rule directs the contracting officer to use the termination procedures that apply to commercial products and commercial services under FAR 12.403 and the termination clauses at 52.212-4(l) or (m), or to use FAR part 49 or 52.213-4 for noncommercial supplies or services. For unaccepted orders, the rule requires written notice of cancellation and a request for the contractor’s written acceptance of that cancellation. If the contractor agrees and does not claim costs from starting performance, the matter ends; if the contractor disagrees or claims costs were incurred, the action must be treated as a termination instead. In practice, this section protects both the Government and the contractor by ensuring the correct legal process is used based on whether a binding acceptance has occurred and whether performance-related costs may have been incurred.
Key Rules
Accepted orders are terminated
If the contractor has accepted the purchase order in writing, the contracting officer cannot simply cancel it. The order must be processed as a termination under the applicable termination framework for commercial or noncommercial acquisitions.
Commercial items use FAR 12 procedures
For commercial products and commercial services, the contracting officer must follow FAR 12.403 and the termination provisions in 52.212-4(l) or (m). These rules govern termination for convenience and termination for cause in commercial-item contracts.
Noncommercial orders use FAR 49 or 52.213-4
If the purchase order is for other than commercial products or commercial services, the contracting officer must use FAR part 49 or the termination clause at 52.213-4, as applicable. This ensures the termination is handled under the proper noncommercial framework.
Unaccepted orders may be canceled
If the contractor has not accepted the purchase order in writing, the contracting officer may cancel it rather than terminate it. The cancellation must be communicated in writing, and the contractor must be asked to confirm acceptance of the cancellation in writing.
No further action if cancellation is accepted
If the contractor accepts the cancellation and does not claim that it incurred costs by beginning performance, the purchase order is considered canceled and no additional action is required.
Claims of incurred costs trigger termination
If the contractor refuses to accept the cancellation or says it incurred costs from starting performance, the contracting officer must treat the matter as a termination under paragraph (a). The Government cannot avoid termination procedures simply by labeling the action a cancellation.
Responsibilities
Contracting Officer
Determine whether the contractor has accepted the purchase order in writing, choose the correct end-action, and follow the required procedures. For accepted orders, process a termination under the applicable commercial or noncommercial rules; for unaccepted orders, issue written cancellation notice, request written acceptance, and convert the action to a termination if the contractor disputes the cancellation or claims costs.
Contractor
Decide whether to accept a cancellation in writing when the purchase order has not been accepted in writing. If the contractor has already accepted the order in writing, it must respond to the termination under the applicable termination procedures and may assert any rights to termination settlement or other relief allowed by the governing clause or part.
Agency/Government
Ensure purchase order administration follows the correct legal framework based on acceptance status and item type. The agency must support proper documentation, preserve the record of written acceptance or cancellation notice, and ensure any claimed costs or termination actions are handled under the correct FAR authority.
Practical Implications
The key practical issue is whether the contractor has accepted the purchase order in writing; that fact determines whether the action is a cancellation or a termination. Misclassifying the action can create settlement disputes and procedural errors.
Contracting officers should document acceptance status early and keep clear records of all notices and contractor responses. A missing or unclear acceptance record can make it difficult to justify a cancellation.
For commercial buys, the termination path is different from the noncommercial path, so the contracting officer must identify the acquisition type before acting. Using the wrong clause or part can delay resolution and increase risk.
If the contractor says it started performance and incurred costs, the Government should assume the matter may require termination processing rather than simple cancellation. Ignoring a cost claim can expose the agency to avoidable liability.
This section is especially important for simplified acquisitions because purchase orders are often issued quickly, but ending them still requires careful attention to acceptance, notice, and the applicable termination rules.
Official Regulatory Text
(a) If a purchase order that has been accepted in writing by the contractor is to be terminated, the contracting officer shall process the termination in accordance with- (1) 12.403 and 52.212-4 (l) or (m) for commercial products and commercial services; or (2) part 49 or 52.213-4 for other than commercial products or commercial services. (b) If a purchase order that has not been accepted in writing by the contractor is to be canceled, the contracting officer shall notify the contractor in writing that the purchase order has been canceled, request the contractor’s written acceptance of the cancellation, and proceed as follows: (1) If the contractor accepts the cancellation and does not claim that costs were incurred as a result of beginning performance under the purchase order, no further action is required ( i.e., the purchase order shall be considered canceled). (2) If the contractor does not accept the cancellation or claims that costs were incurred as a result of beginning performance under the purchase order, the contracting officer shall process the action as a termination prescribed in paragraph (a) of this subsection.