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Clauses · FAR · Termination

FAR 52.249-6 Termination (Cost-Reimbursement)

Does the regulation require it to flow down?

No

Same mirror mechanics as 52.249-2: (c)(3) orders the prime to terminate the related subs, (c)(5) orders it to settle their settlement proposals, and (h)(2) makes that settlement a recoverable cost. The prime needs the mirror clause in the subcontract to have the right to terminate and the reciprocal duty to pay your settlement — without it, it either breaches the contract or pays out of its own pocket.

A clause can reach your subcontract without a mandate. Once it is in your document, it is a contract term all the same. The missing mandate is a fact about the regulation. It is not a ruling on your order.

Checked against acquisition.gov on 2026-08-04 · edition MAY 2004 (Basic; Alt I–V — IV and V for T&M/LH) · base v0.9.3 Read the text ↗

What it makes you produce

2 items for your checklist, slowest first.

  1. Something you write2

    Days to weeks, and nobody outside your company has to agree to it.

    • Complete termination inventory schedules within 120 days of the effective date

      FAR 52.249-6(d)

    • The final termination settlement proposal within one year — on cost-type work the incurred costs come back either way, and the fee is what the settlement turns on

      FAR 52.249-6(f)

When it is used

Prescribed by 49.503(a)(1) for the prime's cost-reimbursement contracts (Alt IV/V extend it to T&M/labor-hour). Covers convenience AND default in a single text. No flow-down mandate: it reaches the sub through mirroring — (c)(3) obligates the terminated prime to 'terminate all subcontracts to the extent they relate to the work terminated'.

Read closely

Under the basic clause the fee is prorated: on a convenience termination by the percentage of completion under (h)(4)(i), on a default by what was delivered and accepted under (h)(4)(ii). Alternate IV replaces that computation. (c)(1) stops the terminated work immediately and (c)(3) terminates your own related orders. These figures are the regulation's — Lockheed's CorpDoc 3A shortens the same two deadlines on the fixed-price and the nonprofit termination clauses, so what binds here is whatever this order writes at (d) and (f).

Alternates

  • Alt IV · SEP 1996

    FAR 49.503 — time-and-materials or labor-hour contract.

    Alternate IV substitutes paragraphs (h) and (l) so the termination payment is computed from direct labor hours expended at the rates in the schedule and the material cost incurred, rather than from a fee proration — different evidence out of different books. The (h)(4) proration described for the basic clause is not part of this version.

The 14 templates that name it, with the line
155CORPDOC 4A — FAR/DFARS Flowdown Provisions for Cost-Reimbursement/T&M Subcontracts under a DoD Prime ContractLockheed Martinline 348233RTX Flowdown of U.S. Government Contract Clauses Under U.S. Government ContractsRTXline 953105Raytheon TC-002 — Supplement 1: Government Contract Provisions from the FARRTXline 27412Boeing GP4 — General Provisions, Cost Reimbursement Contract under U.S. Government Prime ContractBoeingline 2186Boeing GP9 — General Provisions, Labor Hour/T&M Contract under U.S. Government Prime ContractBoeingline 253166Northrop Grumman CTM-P-ST-003 — U.S. Government T&M Order (Not for Commercial Products and Services)Northrop Grummanline 434168Northrop Grumman CTM-P-ST-004 — U.S. Government Cost Reimbursement Order (Not for Commercial Products and Services)Northrop Grummanline 567255GD Mission Systems SCM-TMP-005 — General Provisions, Firm Fixed Price PO under U.S. Government Contract (Non-Commercial)General Dynamicsline 1173243GD Mission Systems SCM-TMP-048 — T&M Purchase Orders for Non-Commercial Items in Support of a U.S. Government ContractGeneral Dynamicsline 485240L3Harris LGL-50.F1 — General T&C and Flowdown Clauses for Other Than Commercial Products/Services under a U.S. Government ContractL3Harrisline 707106L3Harris LGL-50.F2 — General T&C and Flowdown Clauses for Commercial Products/Services under a U.S. Government ContractL3Harrisline 71110BAE Systems Inc. USGOVGOODS — General Clauses for Subcontracts/Purchase Orders for Goods under a U.S. Government Prime ContractBAE Systemsline 808273BAE Systems Inc. USGOVA — FAR/DFARS Flow Down Provisions for Subcontracts/Purchase Orders under a U.S. Government (DoD) Prime ContractBAE Systemsline 929178AAR Component Services NY — U.S. Government Contract FAR and DFARS Clauses Incorporated by ReferenceAAR Corpline 1790

Source: acquisition.gov, FAR 52.249-6 and 49.503(a)(1) (verified 2026-08-04)

This is research, not legal advice. It states what the regulation says about this clause and cites the paragraph behind it. It does not rule on your order, and it does not rule on whether a prime's markings are correct.