A contract containing a term allowing it to be terminated for convenience such as subparagraph l of Clause 4-1: General Terms and Conditions, subparagraph a 2 of Clause B-12: Termination for Convenience or Default, or Clause B-71: Termination for Convenience (Transportation), or similar contract term, may be terminated for convenience when it is in the Postal Service’s best interest, for example, when the products or services supplied under the contract are no longer required or the contract becomes unnecessary for some other reason.
When a contract is terminated for convenience, the supplier is entitled to a percentage of the contract price, reflecting the percentage of work performed prior to notice of the termination, as well as any reasonable charges that the supplier can demonstrate directly resulted from the termination, (or, in the case of highway transportation contracts, liquidated damages calculated as provided in the Changes (Transportation) clause of the contract). Therefore, the contracting officer must consider the cost of a termination for convenience when deciding whether to take such action. Similarly, when a contract has been terminated for convenience, the need to obtain sufficient documentation to support payment to the supplier must be balanced against the objective of accomplishing a simple and expeditious settlement.
The contracting officer may settle a contract terminated for convenience by:
Termination for convenience may, in some instances, be to the advantage of the supplier. In these instances, the supplier may be willing to waive entitlement to charges or liquidated damages to which it may be entitled, thereby making termination for convenience more attractive to the Postal Service, as well. Any such waiver by the supplier must be the subject of a contract modification signed by the supplier.
