FAR 49.601—Notice of termination for convenience.
Plain-English Summary
FAR 49.601 is the basic notice provision for a termination for convenience. It tells the contracting officer how to notify the contractor that the Government is ending all or part of the contract for convenience, and it points readers to FAR 49.402-3(g) for the separate notice requirements that apply when the termination is for default. In practice, this section matters because the notice is the formal trigger for the termination process: it starts the contractor’s obligation to stop work, protects the Government’s record of the action, and helps define the scope and effective date of the termination. Although the section is brief, it sits at the front end of the termination process and connects directly to later steps such as stop-work actions, settlement proposals, inventory disposition, and closeout. The practical significance is that a clear, timely, and properly addressed notice reduces disputes over whether the termination was effective, what work was covered, and when the contractor had to begin winding down performance.
Key Rules
Use written notice
The termination for convenience must be communicated by notice, not by informal conversation or assumption. The notice should clearly state that the Government is terminating the contract, or a specified part of it, for convenience.
Identify the affected work
The notice should specify whether the termination is total or partial and identify the contract, line items, or other work elements affected. Clear scope identification helps avoid confusion about what work must stop and what work may continue.
State the effective date
The notice should tell the contractor when the termination becomes effective. That date is important because it marks when the contractor must stop the terminated work and begin orderly shutdown actions.
Follow related termination guidance
This section is only the notice provision for convenience terminations; it must be read with the rest of FAR Part 49 for the procedures that follow. For default terminations, the notice rules are in FAR 49.402-3(g), not this section.
Responsibilities
Contracting Officer
Issue the termination for convenience notice in writing, clearly identify the contract and the work being terminated, state the effective date, and ensure the notice is consistent with the applicable termination authority and FAR Part 49 procedures.
Contractor
Treat the notice as the formal direction to stop the terminated work as of the effective date, preserve records, and prepare to take the steps needed for settlement, inventory, and closeout under the termination procedures that follow.
Agency
Support the contracting officer by ensuring the termination action is properly documented, authorized, and coordinated with program and legal stakeholders as needed.
Practical Implications
A termination notice is the legal starting point for the convenience-termination process, so vague or oral communications can create disputes about whether the contractor was actually directed to stop work.
The notice should be precise about whether the termination is total or partial; unclear scope is a common source of claims over continued performance, standby costs, and settlement amounts.
The effective date matters operationally and financially because it affects when work stops, when costs become allowable, and how the contractor documents shutdown activities.
This section is short, but it should not be used in isolation; officers and contractors need to follow the broader FAR Part 49 procedures after notice is issued.
Contractors should immediately review the notice for contract number, line items, effective date, and scope, because errors or ambiguities can affect both performance obligations and later settlement negotiations.
Official Regulatory Text
(See 49.402-3 (g) for notice of termination for default.)