B-238829, Apr 4, 1990, 90-1 CPD ***, Office of General Counsel

B-238829: Apr 4, 1990

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This is FAR case No. 90-07. Which provides that generally a contract should not be terminated for convenience if the price of the undelivered balance of the contract is less than the threshold. We have no objection to the proposed changes.

B-238829, Apr 4, 1990, 90-1 CPD ***, Office of General Counsel

PROCUREMENT - Contract Management - Contract administration - Convenience termination - Federal procurement regulations/laws - Revision DIGEST: General Accounting Office has no objection to Federal Acquisition Regulation (FAR) case No. 90-07, a proposal to increase or delete a number of dollar-value thresholds in FAR Part 49, which concerns contract terminations.

Margaret A. Willis

FAR Secretariat

General Services Administration:

This responds to your letter of February 22, 1990, requesting our comments on a proposed rule that would increase or delete a number of dollar-value thresholds in Part 49 of the Federal Acquisition Regulation (FAR). This is FAR case No. 90-07.

FAR case 90-07 would revise FAR Part 49, which concerns contract terminations, to:

-- increase from $2,000 to $5,000 the threshold in FAR section 49.101(c), which provides that generally a contract should not be terminated for convenience if the price of the undelivered balance of the contract is less than the threshold;

-- delete the $100,000 threshold in FAR section 49.101(d), thus providing for giving "particular attention" to the need for prompt settlements of all terminated contracts involving small businesses, not just those below the threshold;

-- increase to $100,000 the threshold for contractors' and subcontractors' settlement proposals that must be referred for audit;

-- provide in FAR section 49.108-4 for authorizing prime contractors to settle terminated subcontracts less than $100,000 (currently $25,000) and for increasing this authority as the terminating contracting officer may deem appropriate.

We have no objection to the proposed changes.