Termination of the contract for the convenience of the government
The government has the right under this clause to terminate the contract, in whole or in part, without cause if the contracting officer determines that termination is in the government’s interest.
The terminated contractor may recover for costs incurred, for profit on work already performed, and for the costs of preparing the termination settlement proposal. The terminated contractor cannot recover anticipated (or lost) profits on work not performed.
Contracting officers must exercise their authority to terminate a contract for convenience in good faith. A contracting officer’s decision to terminate for convenience cannot be arbitrary or capricious.