Which statement accurately describes termination for convenience?

• A. It terminates due to the contractor's fault.
• B. It is used to terminate a contract for convenience, but only with mutual agreement.
• C. It terminates the contract for convenience, at the government's discretion, with potential compensation for work performed.
• D. It terminates only after a dispute resolution.

Answer: (C)

Termination for convenience is a provision that lets the government end a contract on its own, without the contractor’s fault or a dispute. It isn’t about who did what wrong; it’s a unilateral decision by the government to stop the work, often to reallocate resources or respond to changing needs. When this happens, the contractor is eligible for compensation for costs already incurred and allowable costs tied to the work performed, plus a reasonable profit on that work in many cases. This ensures the contractor isn’t left bearing all the costs for work that will no longer be used. So the accurate description is that it terminates the contract for convenience at the government’s discretion, with potential compensation for work performed.