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  • Question

    In year 3 of the active delivery order can you descope and adjust costs assoicated with year 1 or the delivery order?


    Answer

    The use of the word “descoping” has become common in contracting parlance, but it is not found in the FAR.  What is commonly meant when “descope” is used, is “partial termination”.
     
    I know of no restriction on partially terminating a delivery order which is still open, regardless of the period of performance.  FAR 49.101(c) does caution that “When 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.”  This caution addresses the administrative burden of a termination (or partial termination) versus the anticipated funds to be deobligated.  Further guidance relative to a partial termination can be found at FAR 49.208.
     
    Since the termination of a government contract is not a common occurrence, many organizations have designated Termination Contracting Officers (TCO) who specialize in terminations and are available for advice and counsel.  If your organization has a TCO, I recommend you coordinate with him/her before initiating a partial termination.

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