The word “termination” in nearly every context elicits concern. And in federal contracting, such concern may often be warranted. Some terminations are no big deal, resulting in a federal contract–or even just part of one–being ended a bit early for convenience of the government. But other terminations, based on alleged default or deemed “for cause,” can have significant negative impacts (especially on small and disadvantaged businesses). So, one thing remains consistent across the board for federal contract terminations: it is crucial to understand the type of termination you are issued, its legal implications, and your rights and options for resolution. This article provides a general overview of terminations. Future posts will dive in deeper to contractor termination rights and options and settlement proposals.
Continue readingTag Archives: termination for default
Winding Down: COVID-19 Work Stoppages & Suspensions
Many contractors are facing work stoppages or suspensions because of COVID-19—especially where working from home is not feasible. This post aims to provide a little bit of clarity about work stoppages, suspensions, and the FAR’s excusable delays provision.
Continue readingCOFC Rejects Agency’s Basis for Default Termination
The Court of Federal Claims recently reversed an agency’s default termination of a contractor that had experienced numerous performance issues and delays. The agency claimed that performance was “incurably behind schedule,” despite the contractor’s proposed recovery schedule.
The court held that the agency lacked a reasonable belief that the contract could not be timely completed.
Continue readingGovernment’s Default Termination Threat Was Improper Coercion, Says ASBCA
The Government improperly threatened to terminate a contractor for default, because there was no good reason to believe the contractor had actually defaulted.
In a fascinating new decision by the Armed Services Board of Contract Appeals, the Government’s threat–made to a contractor with cash-flow issues–amounted to coercion, and invalidated a settlement agreement that awarded the contractor much less than it probably should have received.
Termination For Default: The “No Reasonable Likelihood” Standard
Sometimes you may find yourself running late. It happens to the best of us for a multitude of reasons. But what happens to federal contractors when they are running late in performing under a contract and there is “no reasonable likelihood” of timely performance?
Unfortunately for contractors in this position, as illustrated by a recent Civilian Board of Contract Appeals (CBCA) decision, the result may be a default termination.
Nonmanufacturer Rule Violation Leads To Default Termination
A procuring agency appropriately terminated a small business set-aside contract for default when the SBA determined, after contract award, that the prime contractor was not complying with the nonmanufacturer rule.
A recent decision of the Armed Service Board of Contract Appeals involved a very interesting factual situation, in which the small business in question told the SBA that it planned to perform the contract in compliance with the nonmanufacturer rule, but then failed to do so. This failure, according to the ASBCA, justified a default termination.
CBCA: “Appeal” Sent To Contracting Officer Didn’t Count
A contractor’s challenge to a contracting officer’s final decision was “improperly directed” when it was sent only to the contracting officer, and did not delay the 90-day period in which the final decision could be appealed to the Civilian Board of Contracting Appeals.
As demonstrated in a recent CBCA decision, when a contractor receives a contracting officer’s final decision, the appeals clock starts ticking–and an “appeal” to the contracting officer doesn’t stop the clock.