FAR 49.100—Scope of subpart.
Plain-English Summary
FAR 49.100 is the gateway provision for the termination subpart. It explains that this subpart covers four core subjects: the contracting officer’s authority and responsibility to terminate contracts in whole or in part for the Government’s convenience or for default; the duties of both the contractor and the contracting officer after a termination notice is issued; the general procedures used to settle terminated contracts; and settlement agreements. It also points readers to the more detailed rules that apply depending on the type of termination and contract: subpart 49.2 and subpart 49.3 for convenience terminations and settlements of fixed-price and cost-reimbursement contracts, and subpart 49.4 for default terminations. In practice, this section tells users where the termination framework begins and how the FAR organizes the subject, so contracting officers and contractors can quickly identify the governing procedures after a termination decision. It matters because termination actions are time-sensitive, documentation-heavy, and often financially significant, and this section signals that the general rules here must be read together with the more specific subparts that follow.
Key Rules
Termination authority and responsibility
This subpart addresses the contracting officer’s authority and responsibility to terminate contracts either for the Government’s convenience or for default. It establishes that termination is an official contracting action governed by FAR procedures, not an informal decision.
Post-notice duties
After a notice of termination is issued, both the contractor and the contracting officer have duties that must be carried out. The section signals that the termination process does not end with the notice; it begins a set of required follow-on actions.
General settlement procedures
The subpart includes the general procedures used to settle terminated contracts. These procedures provide the framework for determining what amounts, if any, are owed after termination and how the parties resolve the terminated work.
Settlement agreements
Settlement agreements are part of the termination framework and are used to document the final resolution of termination-related claims and obligations. They are a formal mechanism for closing out the terminated contract or terminated portion of the contract.
Convenience termination cross-references
Additional principles for termination for convenience and settlement of fixed-price and cost-reimbursement contracts are found in subparts 49.2 and 49.3. Users must consult those subparts for the more detailed rules that govern those situations.
Default termination cross-reference
Additional principles for termination of contracts for default are found in subpart 49.4. This means the general scope statement here is not the full rule set for default terminations and must be read with the specific default provisions.
Responsibilities
Contracting Officer
Determine whether termination action is appropriate, issue the termination notice, direct the post-notice process, and apply the general settlement framework and the more specific rules in the applicable subpart.
Contractor
After receiving a termination notice, follow the required post-notice duties, cooperate in the settlement process, and participate in any settlement agreement or other resolution of the terminated work.
Agency
Support the contracting officer’s termination and settlement actions through internal procedures, oversight, and any required approvals or coordination needed to complete the termination process.
Practical Implications
This section is mainly a roadmap: it tells you what the termination subpart covers and where to find the detailed rules for convenience and default terminations.
A common pitfall is stopping at this section and missing the more specific requirements in subparts 49.2, 49.3, or 49.4, which usually control the actual outcome.
Once a termination notice is issued, both sides need to act quickly; delays in responding, documenting costs, or preserving records can complicate settlement.
Contracting officers should treat termination as a structured process with defined responsibilities, not just a contract management decision.
Contractors should immediately identify whether the termination is for convenience or default, because the applicable rights, obligations, and settlement rules differ significantly.
Official Regulatory Text
(a) This subpart deals with- (1) The authority and responsibility of contracting officers to terminate contracts in whole or in part for the convenience of the Government or for default; (2) Duties of the contractor and the contracting officer after issuance of the notice of termination; (3) General procedures for the settlement of terminated contracts; and (4) Settlement agreements. (b) Additional principles applicable to the termination for convenience and settlement of fixed-price and cost-reimbursement contracts are included in subparts 49.2 and 49.3 . Additional principles applicable to the termination of contracts for default are included in subpart 49.4 .