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  • Question

    Which is proper? De-Scope using the Changes-Cost ReImbursement Clause 52-243-2 or partial termination for convenience. The building value $1,193,171.00 plus award fee $119,488.00. The minor construction limit is $750,000.00. of the project cost.


    Answer

    A termination for convenience is a unilateral action. It requires that the contractor prepares a settlement proposal (if needed) for any allowable costs associated with the termination. A bilateral modification will then be issued for the termination settlement. De-scoping requires the contracting officer to send a notice of the intent to reduce the scope to the contractor. The contractor then submits a proposal to the contracting officer reflecting the reduced scope of work. A bilateral modification is then issued to reflect the reduced scope with the revised cost.

    I could locate no clear guidance in the FAR or its supplements on which alternative to use. However, if there are no costs associated with the reduced requirement (one less building in your situation), a partial termination for convenience is administratively simpler because it would not require another proposal. For further guidance, see paragraph 2.3.13 of the Army Corps of Engineers' Contract Administration Manual. It states: "As a general matter, a descope action should proceed as a partial Termination for Convenience (T4C) where the deleted element is a substantial or cardinal element of the original scope. Smaller descope actions should proceed as descope changes under the Changes clause." I understand that yours is an Air Force contract, but you may want to consider this as guidance for your decision.

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