The Federal Acquisition Regulation requires the right for the government to terminate any federal contract “for convenience.”
President Donald Trump won a nonconsecutive second term promising to cut government waste to the bone. He formalized the Department of Government Efficiency (DOGE) as a governmental organization in an executive order on his first day back in office.
Since then, the department and its nominal leader, Elon Musk, have persistently made news for big moves against federal spending. For one, Musk routinely claims his department has uncovered huge savings, only for subsequent reporting to find any actual savings were much more modest.
But the government does seem to have canceled thousands of federal contracts on DOGE’s recommendation, using a provision of federal law that gives the government the ability to cancel commitments largely at its pleasure.
Under the Federal Acquisition Regulation (FAR), most federal agency contracts must include a “termination for convenience” clause, which it defines as “the exercise of the Government’s right to completely or partially terminate performance of work under a contract when it is in the Government’s interest.” A separate FAR provision directs agencies to include a clause by which they can “require the Contractor to stop all, or any part, of the work” in the contract for up to 90 days.
Between January 20 and February 25, the government terminated 2,425 federal contracts for convenience and issued stop-work orders on 205 others, totaling nearly $150 million in de-obligated funds, according to data compiled by GovSpend. (It should be noted that, as the Associated Press reported at the time, from a selection of 2,300 federal contracts, “more than one-third of the contract cancellations, 794 in all, are expected to yield no savings.”)
In one example, the official DOGE account on X posted earlier this month that it had enacted “247 cancellations of wasteful contracts today”, saving around $390 million, including a $3.
