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A25 TERMINATION OF CONTRACT <br />A25.1 SOURCE <br />2 CFR § 200 Appendix II(B) <br />FAA Advisory Circular 150/5370-10, Section 80-09 <br />A25.2 APPLICABILITY <br />Contract Types —All contracts and subcontracts in excess of $10,000 must address termination for cause <br />and termination for convenience by the sponsor. The provision must address the manner (i.e. notice, <br />opportunity to cure, and effective date) by which the sponsor's contract will be affected and the basis <br />for settlement (i.e. incurred expenses, completed work, profit, etc.). <br />Use of Provision — <br />Termination for Default — MANDATORY TEXT. Section 80-09 of FAA Advisory Circular 150/5370- <br />10 establishes standard language for Termination for Default under a construction contract. The <br />sponsor must not make any changes to this standard language. <br />Termination for Convenience — No mandatory text provided. The sponsor must include a clause <br />for termination for convenience. The following language is acceptable to the FAA and meets the <br />intent of this requirement. If the sponsor uses different language, the sponsor's language must <br />fully satisfy the requirements of Appendix II to 2 CFR part 200. <br />Equipment, Professional Services, and Property— No mandatory text provided. The sponsor may <br />use their established clause language provided that it adequately addresses the intent of <br />Appendix II(B) to Part 200, which addresses termination for fault and for convenience. <br />A25.3 CONTRACT CLAUSE <br />A25.3.1 Termination for Convenience <br />TERMINATION FOR CONVENIENCE (CONSTRUCTION & EQUIPMENT CONTRACTS) <br />The Owner may terminate this contract in whole or in part at any time by providing written notice to the <br />Contractor. Such action may be without cause and without prejudice to any other right or remedy of <br />Owner. Upon receipt of a written notice of termination, except as explicitly directed by the Owner, the <br />Contractor shall immediately proceed with the following obligations regardless of any delay in <br />determining or adjusting amounts due under this clause: <br />1. Contractor must immediately discontinue work as specified in the written notice. <br />2. Terminate all subcontracts to the extent they relate to the work terminated under the notice. <br />3. Discontinue orders for materials and services except as directed by the written notice. <br />Guidelines for Contract Provisions for Obligated Sponsors and Airport Improvement Program Projects <br />Issued on December 12, 2017 Page 64 <br />