Part 49 Termination of Contracts

Question 1

What are the three types of terminations?

Answer 1

Termination for Vonvenience (T4C)
Termination for Default (T4D)
Termination for Cause (commercial contracts)

Question 2

What costs are recognized/allowed in a T4C?

Answer 2

Contract price for accepted items
Contract price for items completed before t4C but acceptance was after T4C
Cost with profit/fee on work in process at time of T4C
Costs without profit/fee for settlement costs and preparing REA.

Question 3

How should you rate profit/fee on work in process on a T4C?

Answer 3

Profit not necessarily profit rate negotitated.
Should be adjusted to reflect extent of work completed
Rate shoul also be adjusted to reflect projected profit earned if contract had not been terminated
If at a loss, no profit should be allowed

Question 4

What are the three instances for T4D?

Answer 4

Failure to deliver or perform by due date
Failure to make progress that endangers timely delivery/performance
Failure to perform any other provision of the contract

Question 5

What must the CO consider before a T4D?

Answer 5

The failure does not include acts of government or another contractor.
Availablity of supply/service for other sources
Urgency of need and how long it would take for a new contractor to deliver vs current contract to complete

Question 6

After a T4D if there is still a need?

Answer 6

Government may re-purchase

Question 7

What happens if the repurchase price is more than the terminated contract?

Answer 7

Governmnet may recoup that additional amount from the terminated contractor

Question 8

What should the government do prior to the T4D?

Answer 8

Issue Notice of Termiantion

Always coordinate with JA prior to issuance of cure notice or show cause notice.

Question 9

What is a Cure Notice?

Answer 9

Used for failure to make progress or failure to perform. Used when there are 10 or more days before the contract due date and give KTR 10 days to cure the delinquency/problem

Question 10

What is a SHow Cause Notice?

Answer 10

Used in instances of T4D, Should be issued immediately upon expiration of delivery period. Give KTR opportunity to explain why he has failed or is failing to perform.

Question 11

What happens if the prime or subs are small businesses?

Answer 11

SB notification to cognizant SB officer for the contractors area.

Question 12

What are the Contractors responsibilities upon notice of termination?

Answer 12

Stop work on terminated effort
Terminate subcontracts related to terminated work
Prepare and submit proposal for Equitable adjustment
Preserve any Government Property in its possesion