Joseph Feibel – January 7, 2018
Question:
What is termination for convenience?
Answer:
Termination for convenience occurs when the government requires the contractor to discontinue performance when a determination is made that completion of the work is no longer in its best interest. The government has the right to terminate without cause and to limit the contractor’s recovery to:
- Costs incurred
- The profit on work done and
- The cost of preparing a termination settlement proposal
The recovery of anticipated profit is precluded when a contract is terminated for convenience.
A Termination for Convenience should be considered when:
- Funds are insufficient to pay the full contract price
- The requirement is no longer needed
- The quantity of supplies or services needed has been reduced or
The has been a radical change in the requirement, and the requirement is now beyond the contractor’s expertise.