[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR49]



[Page 922-923]

 

            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM

 

                CHAPTER 1--FEDERAL ACQUISITION REGULATION

 

PART 49_TERMINATION OF CONTRACTS--Table of Contents

 

                     Subpart 49.1_General Principles

 

49.101  Authorities and responsibilities.



    (a) The termination clauses or other contract clauses authorize 

contracting officers to terminate contracts for convenience, or for 

default, and to enter into settlement agreements under this regulation.

    (b) The contracting officer shall terminate contracts, whether for 

default or convenience, only when it is in the Government's interest. 

The contracting officer shall effect a no-cost settlement instead of 

issuing a termination notice when (1) it is known that the contractor 

will accept one, (2) Government property was not furnished,



[[Page 923]]



and (3) there are no outstanding payments, debts due the Government, or 

other contractor obligations.

    (c) When the price of the undelivered balance of the contract is 

less than $5,000, the contract should not normally be terminated for 

convenience but should be permitted to run to completion.

    (d) After the contracting officer issues a notice of termination, 

the termination contracting officer (TCO) is responsible for negotiating 

any settlement with the contractor, including a no-cost settlement if 

appropriate. Auditors and TCO's shall promptly schedule and complete 

audit reviews and negotiations, giving particular attention to the need 

for timely action on all settlements involving small business concerns.

    (e) If the same item is under contract with both large and small 

business concerns and it is necessary to terminate for convenience part 

of the units still to be delivered, preference shall be given to the 

continuing performance of small business contracts over large business 

contracts unless the chief of the contracting office determines that 

this is not in the Government's interest.

    (f) The contracting officer is responsible for the release of excess 

funds resulting from the termination unless this responsibility is 

specifically delegated to the TCO.



[48 FR 42447, Sept. 19, 1983, as amended at 55 FR 52797, Dec. 21, 1990; 

56 FR 67134, Dec. 27, 1991]