FAR 52.249-1—Termination for Convenience of the Government (Fixed-Price) (Short Form).
Plain-English Summary
FAR 52.249-1 is the short-form fixed-price termination for convenience clause. It tells the contracting officer that the Government may end the contract, in whole or in part, by written notice whenever doing so is in the Government’s interest, and it directs the parties to FAR part 49 for the detailed rules that govern the termination process, including the contractor’s compensation and the parties’ rights and duties. The clause is intentionally brief because it does not itself spell out the full settlement procedure; instead, it incorporates the termination framework in part 49 as it exists on the contract date. The clause also includes an alternate version for contracts involving dismantling, demolition, or removal of improvements, where title to property may revest in the Government upon termination, subject to limited exceptions for property already sold in good faith or removed from the site. In practice, this clause gives the Government flexibility to stop work for convenience while preserving a structured, regulated method for settling the contractor’s costs and obligations.
Key Rules
Government may terminate
The contracting officer may terminate the contract, in whole or in part, by written notice when it is in the Government’s interest. This is a unilateral right; the contractor does not have to agree for the termination to be effective.
Written notice required
Termination must be communicated in writing. The written notice is the operative act that ends all or part of the contract work and starts the termination settlement process.
Part 49 controls settlement
The clause does not define the settlement mechanics itself. Instead, it incorporates FAR part 49 to determine the parties’ rights, duties, and the contractor’s compensation after termination.
Rights fixed by contract date
The clause refers to part 49 in effect on the date of the contract. That means the termination settlement framework is tied to the regulatory version applicable when the contract was formed, not later changes unless otherwise applicable by law or contract terms.
Partial termination allowed
The Government may terminate only part of the contract if that is in its interest. The contractor must then continue performing the non-terminated portion unless the notice or other contract terms say otherwise.
Alternate I property revesting
For dismantling, demolition, or removal of improvements, title to property vested in the contractor revests in the Government upon receipt of the termination notice, except for property the contractor already disposed of by bona fide sale or removed from the site. This alternate protects the Government’s interest in site-related property when the work is stopped.
Responsibilities
Contracting Officer
Issue written termination notice when termination is in the Government’s interest, specify whether the termination is total or partial, and administer the settlement under FAR part 49. For contracts using Alternate I, the contracting officer must ensure the property revesting rule is applied to the covered work.
Contractor
Stop terminated work upon receipt of the notice, preserve and account for termination-related costs and inventory, and pursue compensation and settlement in accordance with FAR part 49. For Alternate I contracts, the contractor must recognize that title to vested property may revert to the Government except for bona fide sales or property already removed from the site.
Government
Exercise the convenience termination right only when appropriate to the Government’s interest and follow the part 49 settlement framework for fair compensation and closeout. In Alternate I situations, the Government must assert its property rights consistent with the clause.
Subcontractors
Comply with flowdown termination instructions from the prime contractor and support settlement documentation as required by the prime’s termination administration under FAR part 49.
Practical Implications
This clause is a trigger, not a full procedure: the real settlement rules are in FAR part 49, so contractors and COs must look beyond the clause text to determine allowable costs, settlement proposals, and deadlines.
A written notice is essential; informal direction or oral statements do not substitute for the formal termination notice.
Partial terminations can create accounting and performance complications, especially when costs must be segregated between terminated and continuing work.
For demolition/dismantling/removal contracts, property title issues can be significant; contractors should track what property is vested, sold in good faith, or removed from the site before termination.
A common pitfall is assuming the clause guarantees recovery of all costs or lost profits; compensation is governed by part 49 and is limited by the termination-for-convenience framework.
Official Regulatory Text
As prescribed in 49.502 (a)(1) , insert the following clause: Termination for Convenience of the Government (Fixed-Price) (Short Form) (Apr 1984) The Contracting Officer, by written notice, may terminate this contract, in whole or in part, when it is in the Government’s interest. If this contract is terminated, the rights, duties, and obligations of the parties, including compensation to the Contractor, shall be in accordance with part 49 of the Federal Acquisition Regulation in effect on the date of this contract. (End of clause) Alternate I (Apr 1984) . If the contract is for dismantling, demolition, or removal of improvements, designate the basic clause as paragraph (a) and add the following paragraph (b): (b) Upon receipt of the termination notice, if title to property is vested in the Contractor under this contract, it shall revest in the Government regardless of any other clause of the contract, except for property that the Contractor (a) disposed of by bona fide sale or (b) removed from the site.