FAR 8.406-5 permits the ordering activity Contracting Officer to terminate individual orders for the convenience of the government when it is in the government’s best interest. Terminations for convenience must comply with FAR 12.403.
Before terminating orders for the government’s convenience, the ordering activity Contracting Officer shall endeavor to enter into a “no-cost” settlement agreement with the contractor. Only the Schedule Contracting Officer has the authority to modify the Schedule contract to terminate any or all supplies or services covered by the Schedule contract for the government’s convenience. Ordering agencies have authority to terminate individual orders. In disputes (refer to FAR 8.406-6) pertaining to the performance of orders under a Schedule contract, the ordering activity Contracting Officer may:
The ordering activity Contracting Officer shall notify the Schedule Contracting Officer promptly of any final decision. If the dispute pertains to the terms and conditions of the Schedules contract, the ordering activity Contracting Officer shall refer the dispute to the Schedule Contracting Officer for resolution under the Disputes clause of the contract and notify the Schedule contractor of the referral.