The government has an IDIQ K (does not have option periods), and because of mission requirements, no longer has a need for the services.

The government has met the stated minimum quantity.

When the government notifies the contractor, could the KO send a letter to the contractor, informing the contractor that the government will no longer place orders against the contract?

Or could the KO issue an unilateral modification, cancelling the contract?

Thanks

I recommend looking at your agency's supplementation of FAR Part 49. A no-cost settlement may be the best route if the decision is made to contractually surrender the power to issue any future orders. Before giving up this power, though, consider carefully whether there is any risk the agency might need any of these services during the remaining ordering period. Informal direction to the effect that no future orders are presently contemplated, and that, should any arise, sufficient lead time will be given, may be an appropriate alternative.

I assume that the contractor has fully performed on all orders already issued. If not, you may want to wait to negotiate the no-cost settlement until performance is complete, invoiced, and paid.

You certainly can consider a contract modification that shortens the ordering period, but I would be reluctant to do that unilaterally. I'd prefer to have the contractor's signature on the no-cost settlement or, less preferred, a bilateral modification that has solid accord and satisfaction language.

See generally Nash & Cibinic, Administration of Government Contracts (3d Ed. 1995), at 1130.

Do not pass Go, do not go to FAR Part 49. You absolutely do not need to terminate the contract. That is entirely unnecessary.

Under an IDIQ contract you have no obligation to the contractor after you have purchased the minimum, unless the contract expressly provides otherwise. Thus, you can do nothing and simply let the contract die. If you are sure that you won't place additional orders against the contract, you could send an email to the contractor as a matter of courtesy, notifying them of your intentions. But do not do that unless you are absolutely sure that you won't place additional orders.