Under what condition can a contract normally be terminated for convenience?

A contract can typically be terminated for convenience under certain conditions outlined in government contracting regulations. Termination for convenience allows the government to terminate a contract when it's in its best interest, for reasons other than the fault of the contractor.

The reason that the scenario involving the price of the undelivered balance being less than a specified threshold is relevant revolves around efficiency and cost-benefit analysis. Contracts that have low undelivered balances may not warrant further investment of resources or effort to continue the contract when cancelling might result in a better allocation of funds.

In contrast, options focusing on costs exceeding a certain amount or delays in performance do not inherently justify a termination for convenience, as these situations typically pertain to breach or performance issues that fall under different termination provisions. Similarly, while mutual agreement between both parties can facilitate termination, it is not a standard condition under which termination for convenience is executed according to federal guidelines. The focus is on the government's discretion to terminate based on its interests, rather than a price point or mutual consent.

Therefore, the threshold for the undelivered balance provides a practical consideration for allowing the government to terminate contracts that may be no longer feasible or efficient to maintain, aligning with the principles governing contract management.