The clause allows the government to charge the contractor procurement costs deemed excess, recover actual damages, confiscate inventory related to the contract lieu of excess costs of procurement or recoup unliquidated payments in progress (Feldman, 2013). However, if it is determined that failure arose because of factors beyond the contractor’s control or without fault or negligence of the contractor, the termination will be considered a termination for convenience.Therefore, given the circumstances under which this clause is used to terminate contractors, it is vivid that it can be either be regarded as a cost-saving mechanism and an additional cost creator for the Federal government. For instance, as cost-saving method, the clause gives the contracting officer the right to terminate a contract if a contractor fails to perform or make progress, deliver supplies on time an implication that the clause saves the government from making payments for ghost, or incomplete works. Either the clause requires that the contractor bears all costs incurred up to the time of termination of the contractor for default hence saving the government from incurring miscellaneous expenses for substandard or incomplete work. In addition, the clause allows the government to recover actual damages, procurement costs deemed excess or confiscate inventory related to the contract in situations where the government performs some activity related to the contract hence enabling it to recover costs that would give advantage to the contractor (Feldman, 2013).As an additional cost creator for the Federal government. the FAR section 49.402-2 (c) requires that the government pay the contractor for all supplies completed, and any acquired manufacturing materials by the government.