FAR 49.102—Notice of termination.
Plain-English Summary
FAR 49.102 explains how a contracting officer must issue, distribute, amend, and sometimes reinstate a termination notice for convenience or default. It covers the required form of notice, acceptable delivery methods, what the notice must state, who must receive copies, when the notice may be corrected or rescinded, and when a terminated contract may be reinstated. The section exists to ensure terminations are legally effective, clearly communicated, and properly documented, while also protecting the contractor’s ability to respond and mitigate disruption. In practice, this rule matters because an improper notice can create disputes over whether termination was effective, what work stopped, and whether the Government preserved its rights. It also ensures that affected third parties such as assignees, guarantors, and sureties are informed, and that workforce impacts are addressed when a termination causes significant layoffs. For contracting officers, this section is a procedural checklist; for contractors, it is the point at which termination rights, obligations, and mitigation duties become immediate and concrete.
Key Rules
Written notice required
A termination for convenience or default must be made by written notice to the contractor. The notice may be sent electronically if the method can confirm receipt, but if mailed it must be sent by certified mail, return receipt requested, and if hand-delivered the contractor must provide written acknowledgment.
Notice content is mandatory
The notice must identify the termination basis and clause, state the effective date, define the extent of the termination, and include any special instructions. It must also tell the contractor what steps to take to minimize workforce impacts when the termination will significantly reduce the contractor’s workforce.
Workforce mitigation instructions
If the termination, together with other outstanding terminations, will significantly reduce the contractor’s workforce, the notice must include the required steps to minimize personnel impact. If the notice is sent by telegram, those steps must be included in the confirming letter or modification.
Copies must be distributed
The contracting officer must send the termination notice simultaneously to the contractor, the contract administration office, and any known assignee, guarantor, or surety. This ensures all parties with a financial or administrative interest receive timely notice.
Notice may be amended
The contracting officer may amend a termination notice to correct nonsubstantive errors, add supplemental data or instructions, or rescind the notice if the terminated items were completed or shipped before the contractor received the notice.
Reinstatement is limited
A terminated portion of a contract may be reinstated, in whole or in part, only with the contractor’s written consent and only if the contracting office determines in writing that the items are still required and that reinstatement is advantageous to the Government.
Responsibilities
Contracting Officer
Issue termination notices in writing, use an acceptable delivery method, include all required content, send copies to required parties, and amend or rescind notices when authorized. The contracting officer must also make the written determinations required for reinstatement and obtain the contractor’s written consent before reinstating a terminated portion.
Contractor
Receive and review the notice, comply with the effective termination date and special instructions, and take required steps to minimize workforce impacts when applicable. If reinstatement is proposed, the contractor must provide written consent before the terminated portion can be restored.
Contract Administration Office
Receive a copy of the termination notice so it can support administration of the termination, including oversight of closeout, settlement, and related contract actions.
Assignee, Guarantor, or Surety
Receive a copy of the termination notice when known to the contracting officer, so any financial, performance, or security interests tied to the contract are promptly informed.
Practical Implications
The notice itself is critical legal documentation; if it is not properly issued, delivered, or worded, the termination can become vulnerable to challenge.
Contracting officers should treat the required notice elements as a checklist: basis, clause, effective date, extent, special instructions, and workforce-impact instructions when needed.
Electronic delivery is allowed only if receipt can be confirmed, so agencies should retain proof of transmission and receipt rather than relying on informal email alone.
Contractors should immediately verify the effective date and scope of the termination, because those details control what work stops, what costs may be recoverable, and what actions are required next.
If the Government later discovers the terminated items were already completed or shipped before receipt of the notice, the contracting officer may rescind the notice; this makes timing and proof of receipt especially important.
Reinstatement is not automatic and requires both a written Government determination and the contractor’s written consent, so parties should not assume a terminated effort can simply be restarted without a formal amendment.
Official Regulatory Text
(a) General. The contracting officer shall terminate contracts for convenience or default only by a written notice to the contractor (see 49.601 ). The notice of termination may be expedited by means of electronic communication capable of providing confirmation of receipt by the contractor. When the notice is mailed, it shall be sent by certified mail, return receipt requested. When the contracting office arranges for hand delivery of the notice, a written acknowledgment shall be obtained from the contractor. The notice shall state- (1) That the contract is being terminated for the convenience of the Government (or for default) under the contract clause authorizing the termination; (2) The effective date of termination; (3) The extent of termination; (4) Any special instructions; and (5) The steps the contractor should take to minimize the impact on personnel if the termination, together with all other outstanding terminations, will result in a significant reduction in the contractor’s work force (see paragraph (g) of the notice in 49.601-2 ). If the termination notice is by telegram, include these "steps" in the confirming letter or modification. (b) Distribution of copies. The contracting officer shall simultaneously send the termination notice to the contractor, and a copy to the contract administration office and to any known assignee, guarantor, or surety of the contractor. (c) Amendment of termination notice. The contracting officer may amend a termination notice to- (1) Correct nonsubstantive mistakes in the notice; (2) Add supplemental data or instructions; or (3) Rescind the notice if it is determined that items terminated had been completed or shipped before the contractor’s receipt of the notice. (d) Reinstatement of terminated contracts. Upon written consent of the contractor, the contracting office may reinstate the terminated portion of a contract in whole or in part by amending the notice of termination if it has been determined in writing that- (1) Circumstances clearly indicate a requirement for the terminated items; and (2) Reinstatement is advantageous to the Government.