FAR 52.249-2 — Termination for Convenience of the Government (Fixed-Price)
What It Is
FAR 52.249-2 is the Termination for Convenience clause for fixed-price contracts. It lets the contracting officer terminate performance, in whole or in part, whenever the government determines that termination is in its interest — not because the contractor did anything wrong. On a convenience termination the contractor stops work as directed, and is entitled to a settlement that generally covers the cost of work performed, a reasonable profit on that work, and the costs of settling and protecting terminated-contract property. It deliberately avoids the harsher remedies of a default termination; the contractor is made whole for what it did, but is not paid anticipated profit on the unperformed portion.
When It Applies
- Non-commercial fixed-price supply and service contracts (commercial buys use FAR 52.212-4's termination-for-convenience provision).
- When the government's needs change, funding lapses, or continuing the contract is otherwise no longer in its interest.
- Can be a full or partial termination — a partial termination ends only part of the work and may itself support an equitable adjustment on the remainder.
Key Provisions
| Provision | What It Means |
|---|---|
| Government's interest standard | The government may terminate for convenience whenever it decides termination serves its interest — no contractor fault is required. |
| Stop work, then settle | The contractor stops work per the notice and submits a settlement proposal for costs incurred, reasonable profit on work done, and settlement expenses. |
| No anticipatory profit | Recovery covers work actually performed and settlement costs — the contractor does not recover profit it would have earned on the terminated, unperformed work. |
| Recordkeeping drives recovery | The settlement turns on documented incurred costs, so clean cost and inventory records are what make you whole. |
What It Means for an SDVOSB
A convenience termination is a cash-flow and recordkeeping event for a small business. You will not be penalized — but you also will not collect the profit you expected on the cancelled work, and your recovery depends entirely on being able to document costs incurred and commitments made. Keep contract cost records clean from day one, submit a timely settlement proposal, and account for any subcontractor settlement obligations you flowed the termination down to. Partial terminations can also support an equitable adjustment on the work that remains.
Common Pitfalls
- Expecting to recover anticipated profit on the terminated work — convenience-termination recovery is limited to performed work and settlement costs.
- Poor cost and inventory records that make it hard to substantiate the settlement proposal.
- Forgetting to flow the termination down to subcontractors and settle their claims, leaving the prime exposed.
Frequently Asked
If the government terminates my contract for convenience, what do I get paid?
Under FAR 52.249-2 you are generally entitled to the costs of the work you actually performed, a reasonable profit on that performed work, and the costs of settling the termination and protecting terminated-contract property. You do not recover the profit you anticipated on the unperformed portion. Because the settlement is built from documented costs, accurate cost and inventory records are essential to being made whole.
Can the government terminate for convenience even if I did nothing wrong?
Yes. A termination for convenience does not require any fault by the contractor — the contracting officer may terminate, in whole or in part, whenever the government determines it is in its interest, such as when needs change or funding lapses. That is the difference from a termination for default, which is a response to the contractor's failure to perform.
Primary Sources
- FAR 52.249-2 — Termination for Convenience of the Government (Fixed-Price)
- FAR 49.502 — Contract clauses (termination for convenience)
Plain-English reference, not legal advice. Which clauses apply, and in which version, is set by the specific solicitation, and the FAR is periodically amended — always read the actual clause text in your solicitation and confirm its application with your contracting officer before relying on this.
Change log (1)
- LaunchedPublished the federal contract clauses reference covering the standard FAR Part 52 clauses an SDVOSB encounters in a set-aside contract — the SDVOSB set-aside clause (52.219-27), limitations on subcontracting (52.219-14), utilization of small business concerns (52.219-8), the reps-and-certs provisions (52.204-8 / 52.212-3), the commercial terms clauses (52.212-4 / 52.212-5), Changes (52.243-1), Termination for Convenience and Default (52.249-2 / 52.249-8), Prompt Payment and EFT payment (52.232-25 / 52.232-33), Service Contract Labor Standards (52.222-41), and basic cybersecurity safeguarding (52.204-21) — each with a key-provisions table, common pitfalls, an SDVOSB-specific angle, FAQPage, Legislation, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, forms reference, contract types, regulation explainers, how-to guides, FAQ, and the limitations-on-subcontracting and price-to-win calculators.