1533-Contract Terminations

Question 1

What is the definition of Termination for Convenience (T4C)?

Answer 1

The Government’s right to completely or partially terminate performance of work under a contract when it is in the Government’s interest

Question 2

What is the definition of Termination for Default (T4D)?

Answer 2

The Government’s right to completely or partially terminate a contract because of the contractor’s actual or anticipated failure to perform its contractual obligations

Question 3

When the price of the undelivered balance of the contract is less than $5,000, what should happen to the contract?

Answer 3

The contract should normally not be terminated for convenience but should be permitted to run to completion

Question 4

How shall the contracting officer terminate contracts for convenience or default?

Answer 4

Only by a written notice to the contractor

Question 5

What are the Reasons to Terminate for Convenience (T4C) of the Government?

Answer 5

Changes in situations and technology
Lack of funds
Termination is in the best interest of the government

Question 6

What are the Contractor’s Rights under a Terminate for Convenience (T4C)?

Answer 6

The contractor may recover:
Its performance costs incurred up to the date of termination
Certain costs that continue after the date of termination
Termination expenses
Profit or fee for the work performed

Question 7

What is the Government’s Right under a Termination for Default (T4D)?

Answer 7

Under the Default clause (52.249-8), the Government has the right to terminate the contract completely or partially for default if the contractor fails to—
Make delivery of the supplies or perform the services within the time specified in the contract,
Perform any other provision of the contract, or
Make progress and that failure endangers performance of the contract

Question 8

What is a cure notice required for?

Answer 8

Required for a Termination for Default (T4D) unless there is less than 10 days left on the contract

Question 9

What is a cure notice?

Answer 9

Notice of termination consideration

Contractor has 10 days to fix the issue

Question 10

What are the Cure Notice Requirements?

Answer 10

Cure notice is required for a termination for default
Must be “10” days left in the contractor period of performance to issue a “cure notice”

If 10 days are not remaining, the “cure notice” would, in effect, extend the period of performance

Question 11

If you are trying to Terminate for Default (T4D) a small business concern, what shall the contracting officer provide?

Answer 11

The contracting officer shall provide a copy of any CURE NOTICE or SHOW CAUSE NOTICE to the Small Business Administration

Question 12

What authorizes contracting officers to terminate contracts for convenience or for default?

Answer 12

The FAR

Question 13

When shall a contracting officer effect a no-cost settlement instead of issuing a termination notice?

Answer 13

If the contractor incurred no cost

Question 14

What are the prime contractor’s duties after receipt of the termination notice?

Answer 14

Notify the subcontractor

Question 15

Is counsel required to recommend approval for the termination for default/cause?

Answer 15

Yes

Question 16

What procedures may the Government use in lieu of termination for default (T4D) for a contractor’s actual or anticipated failure to perform its contractual obligations?

Answer 16

Termination for Cause (T4C)

Question 17

What FAR part shall the contracting officer use to follow procedures when terminating a contract for commercial items?

Answer 17

FAR part 12

Question 18

When terminating a contract for default before the delivery date, is the Government required to use a cure notice?

Answer 18

Yes

Question 19

When is it appropriate to use a show cause notice?

Answer 19

When there is less than 10 days on the contract