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    Hello, I have an awarded construction (O&M funds) task order. During the design meeting, we found out that contractor did not understand the requirement clearly. I want to use T4C to terminate and there is no cost that contractor will bill. But I am confused with FAR 49.101(b) stating that "...shall effect a no-cost settlement instead of issuing a termination...". So my questions are: 1) If no-cost settlement is agreed, this action cannot be called a T4C anymore, or is no-cost settlement is a sub-set of T4C. Is this just conceptual consfusion? 2) If I am doing a no-cost settlement, which box on section 13 and applicable authority shall I use on SF-30? Thank you


    Fantastic question(s)

    Bottom Line Up Front: Yes, this is still a T4C.

    The remainder of FAR 49.101(b) says “… instead of issuing a termination notice when-". Bold italics added for emphasis.

    Note: All three elements listed at FAR 49.101(b) need to be true to skip the need for providing a “termination notice” and going directly to a terminated contract for convenience. (1) the contractor will accept a no-cost settlement, (2) no GFP was furnished, and (3) no outstanding payments, debts or other contractor obligations exist. We will assume this is the case with your scenario.

    A termination notice (see FAR 49.102) is the first part of the T4C process. It puts them on notice and provides specific instructions. This implies that the contractor will or may be submitting a settlement proposal as the T4C clause allows.

    So, yes this is still called a “termination for convenience”. Think of it this way; you are authorized to skip the first step of the T4C process because all the conditions at FAR 49.101(b) are true; but you are still terminating the contract for convenience. This actually relieves the contractor of the burden to prepare and submit a settlement proposal if they have incurred no costs.

    Because the Government has the unilateral right to T4C, you would check block 13D of the SF30 and use FAR 52.249-1 Termination for Convenience of the Government (Fixed-Price) (Short Form) as the authority.

    For guidance on what to use in block 14 see FAR 49.603; specifically, FAR 49.603—6 No-cost Settlement agreement-complete termination.

    Because you went directly to a no-cost settlement; you may modify the language at FAR 49.603-6(a) to read “This supplemental agreement modifies the contract to reflect a no-cost settlement agreement and terminates the contract in its entirety, effective (insert your date that you want to use or the date when you first told them)" You also want to include the language at paragraph (b) verbatim and any other information that you think helps provide a clear description of why the T4C is being done.

    Finally, although when using block 13D you are not required to have the contractor sign and return a copy, I think you should require the contractor to sign and return a copy of the SF30 (block 13E).

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