FAR 52.249-7—Termination (Fixed-Price Architect-Engineer).
Plain-English Summary
FAR 52.249-7 is the termination clause used in fixed-price architect-engineer contracts when the Government contemplates a fixed-price arrangement. It covers the Government’s right to terminate the contract in whole or in part, either for convenience or because the contractor failed to meet contract obligations, and it explains how the contracting officer must issue the notice of termination. It also sets out the contractor’s immediate post-termination duties, including stopping affected work and turning over all accumulated project materials such as data, drawings, specifications, reports, estimates, summaries, and other information. The clause then distinguishes the financial consequences of a convenience termination versus a default-type termination, including equitable adjustment without anticipated profit on unperformed services, Government completion of the work at the contractor’s expense if there is failure, and recharacterization of the termination as one for convenience if the contractor is later found not to be at fault. Finally, it preserves the Government’s other legal and contractual remedies, making clear that this clause does not limit any additional rights the Government may have.
Key Rules
Government may terminate
The Government may terminate the contract in whole or in part for convenience or for the contractor’s failure to fulfill contract obligations. This gives the Government flexibility to stop work when its needs change or when performance problems occur.
Written notice required
The contracting officer must terminate by delivering a Notice of Termination that states the nature, extent, and effective date of the termination. The notice controls what work stops and when the termination becomes effective.
Immediate stop-work duty
Once the contractor receives the notice, it must immediately discontinue all affected services unless the notice says otherwise. This prevents continued performance on work that is no longer authorized.
Turn over project materials
The contractor must deliver all accumulated contract materials to the contracting officer, including completed and in-process data, drawings, specifications, reports, estimates, summaries, and other information. The clause is broad and covers work product whether finished or still being developed.
Convenience termination payment rule
If the termination is for the Government’s convenience, the contracting officer must make an equitable adjustment in the contract price, but no anticipated profit is allowed on unperformed services. The contractor is compensated fairly for work performed and allowable termination impacts, not for work not yet done.
Failure-based termination consequences
If the termination is for failure to fulfill contract obligations, the Government may complete the work by contract or otherwise, and the contractor is liable for any additional cost the Government incurs. This shifts the cost of completion risk to the contractor when the contractor is at fault.
Wrongful default converted to convenience
If it is later determined that the contractor had not failed to fulfill its obligations, the termination is treated as if it had been issued for the Government’s convenience. This protects the contractor from default consequences when the termination was not justified.
Other remedies preserved
The Government’s rights and remedies under this clause are in addition to any other rights and remedies provided by law or the contract. The clause does not waive other available enforcement tools.
Responsibilities
Contracting Officer
Issue a clear Notice of Termination stating the nature, extent, and effective date of the termination. Determine whether the termination is for convenience or for failure to fulfill obligations, make the required equitable adjustment for convenience terminations, and pursue completion and cost recovery when the contractor is in default.
Contractor
Immediately stop all affected services upon receipt of the notice unless directed otherwise, and promptly deliver all accumulated project materials and information to the contracting officer. If the termination is for convenience, the contractor must support the equitable adjustment process; if the termination is for failure, the contractor may be responsible for the Government’s excess completion costs.
Government
Decide whether to terminate in whole or in part for convenience or for cause, complete the work by contract or otherwise if the contractor fails to perform, and preserve any additional legal or contractual remedies available beyond this clause.
Agency/Project Team
Coordinate the transition of work, identify the affected services and deliverables, and ensure all project records, technical materials, and work-in-process are collected and preserved for completion, audit, or reprocurement purposes.
Practical Implications
This clause is especially important in architect-engineer work because the deliverables are often technical documents and work products that must be handed over quickly if the project stops. Contractors should maintain organized project files so they can comply immediately with turnover obligations.
A common pitfall is misunderstanding the difference between convenience and failure-based termination. The label matters because it affects payment, liability for excess completion costs, and whether the contractor can recover only an equitable adjustment rather than anticipated profit on unfinished work.
Contracting officers should make the termination notice specific. Vague notices can create disputes over what work stops, what materials must be delivered, and when the termination took effect.
Contractors should not continue performing affected services after receiving the notice unless the notice expressly allows it. Continuing work can create uncompensated costs and complicate settlement.
Because the clause preserves other Government remedies, a termination under this clause may be only one part of a broader dispute or enforcement action. Both sides should document performance issues, termination communications, and the status of all work products carefully.
Official Regulatory Text
As prescribed in 49.503 (b) , insert the following clause in solicitations and contracts for architect-engineer services when a fixed-price contract is contemplated: Termination (Fixed-Price Architect-Engineer) (Apr 1984) (a) The Government may terminate this contract in whole or, from time to time, in part, for the Government’s convenience or because of the failure of the Contractor to fulfill the contract obligations. The Contracting Officer shall terminate by delivering to the Contractor a Notice of Termination specifying the nature, extent, and effective date of the termination. Upon receipt of the notice, the Contractor shall- (1) Immediately discontinue all services affected (unless the notice directs otherwise); and (2) Deliver to the Contracting Officer all data, drawings, specifications, reports, estimates, summaries, and other information and materials accumulated in performing this contract, whether completed or in process. (b) If the termination is for the convenience of the Government, the Contracting Officer shall make an equitable adjustment in the contract price but shall allow no anticipated profit on unperformed services. (c) If the termination is for failure of the Contractor to fulfill the contract obligations, the Government may complete the work by contract or otherwise and the Contractor shall be liable for any additional cost incurred by the Government. (d) If, after termination for failure to fulfill contract obligations, it is determined that the Contractor had not failed, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the Government. (e) The rights and remedies of the Government provided in this clause are in addition to any other rights and remedies provided by law or under this contract. (End of clause)