FAR 49.5—Subpart 49.5

General.

FAR 49.501 is the gateway provision for the FAR termination subpart. It explains that this subpart contains the principal contract termination clauses used in federal contracts, and it identifies an important exception: the subpart does not apply to contracts that use the simplified acquisition clause at 52.213-4, Terms and Conditions—Simplified Acquisitions (Other Than Commercial Products and Commercial Services). It also recognizes that agencies may, in appropriate cases, authorize special-purpose termination clauses, but only when those clauses are consistent with the FAR chapter. In practice, this section tells contracting personnel which termination clause framework applies, when the standard termination clauses are not used, and when an agency may tailor termination language for a particular acquisition. For contractors, it signals that termination rights and procedures depend heavily on the clause actually incorporated into the contract, so clause selection matters at award and during performance.

Termination for convenience of the Government.

FAR 49.502 tells contracting officers which Government termination-for-convenience clauses to include in fixed-price solicitations and contracts, and when special alternates or different clauses must be used instead. It covers short-form fixed-price contracts at or below the simplified acquisition threshold, standard fixed-price contracts above the threshold, construction, dismantling/demolition/removal of improvements, service contracts that qualify for the short-form clause, and research and development contracts with educational or nonprofit institutions on a no-profit or no-fee basis. It also addresses when the clause at 52.249-5 is required for those R&D awards, and how prime contractors may flow down termination clauses to fixed-price subcontracts and certain R&D subcontracts. In practice, this section is about matching the termination clause to the contract type, dollar value, and risk profile so the Government can terminate when needed while limiting disputes over settlement rights and costs. It matters because using the wrong clause, or omitting required alternates, can create settlement problems, inconsistent subcontract terms, and avoidable claims after termination.

Termination for convenience of the Government and default.

FAR 49.503 tells contracting officers which termination clauses to insert when a contract may be ended for convenience or default, and it explains which clause alternates apply in special situations. It covers cost-reimbursement contracts, including the general rule for using FAR 52.249-6 and the exceptions for research and development contracts with educational or nonprofit institutions on a no-fee basis, construction contracts, contracts involving partial payments, and time-and-material or labor-hour contracts. It also covers fixed-price architect-engineer services by directing use of FAR 52.249-7, and it addresses how prime contractors may flow down a suitable termination clause to cost-reimbursement subcontracts. In practice, this section is about clause selection and tailoring: the wrong clause or wrong alternate can create settlement, interest, and administration problems later if the Government terminates the contract. It also signals that subcontract termination provisions should be adapted to the subcontract relationship rather than copied verbatim. Although the section is short, it is operationally important because termination rights and settlement procedures depend heavily on the exact clause included in the contract.

Termination of fixed-price contracts for default.

FAR 49.504 tells contracting officers which default clauses must be included in fixed-price solicitations and contracts, and which alternate versions apply in special situations. It covers three major subject areas: fixed-price supplies and services, fixed-price research and development, and fixed-price construction, including dismantling, demolition, and removal of improvements. It also addresses when these clauses are mandatory versus discretionary based on the estimated contract amount relative to the simplified acquisition threshold, and it identifies special cases such as transportation or transportation-related services, awards to educational or nonprofit institutions on a no-profit basis, and contracts awarded during a national emergency. In practice, this section matters because the default clause is the government’s primary contractual remedy when a contractor fails to perform, so the clause selection affects risk allocation, termination rights, and contractor exposure. Contracting officers must choose the correct clause and alternate at solicitation and award, while contractors need to understand that the default remedy may differ depending on the type of work and the contract’s circumstances.

Other termination clauses.

FAR 49.505 tells contracting officers which termination-related clauses must be included in certain solicitations and contracts, and it also explains one area where the FAR does not prescribe a governmentwide clause. It covers three specific subjects: personal service contracts, excusable delays, and communication service contracts with common carriers. For personal service contracts, the rule requires use of the Termination (Personal Services) clause. For cost-reimbursement contracts, and also for time-and-materials and labor-hour contracts, it requires use of the Excusable Delays clause in the listed contract types. For communication service contracts, the FAR leaves cancellation or termination language to agency-level prescription because of special requirements unique to those services. In practice, this section matters because it determines when termination language must be inserted, which clause applies, and when agencies must develop their own clause instead of relying on a FAR-prescribed one.