CFCM Terminations 2 — Questions and Answers
Question 1: Under FAR 49.402-3, before issuing a termination for default notice, the contracting officer must first issue a:
- Final decision letter
- Cure notice or show cause notice (Correct answer)
- Stop-work order
- Demand for adequate assurance
Correct answer: Cure notice or show cause notice
FAR 49.402-3 requires the CO to issue a cure notice (if time permits) or a show cause notice before terminating for default.
Question 2: A contractor's right to receive partial payment for completed work upon termination for convenience is governed by:
- FAR 52.249-1
- FAR 49.201 (Correct answer)
- FAR 43.103
- FAR 52.232-5
Correct answer: FAR 49.201
FAR 49.201 establishes the settlement principles for termination for convenience, including payment for completed work.
Question 3: Which type of contract is LEAST likely to include a termination for convenience clause?
- Fixed-price supply contracts
- Cost-reimbursement contracts
- Purchase orders under the simplified acquisition threshold (Correct answer)
- Indefinite-delivery contracts
Correct answer: Purchase orders under the simplified acquisition threshold
Purchase orders under the simplified acquisition threshold are generally not required to include the termination for convenience clause.
Question 4: When a contractor fails to submit a termination settlement proposal within the time specified in FAR 49.206-1, the contracting officer may:
- Extend the deadline automatically by 90 days
- Unilaterally determine the settlement amount (Correct answer)
- Immediately debar the contractor
- Issue a cure notice
Correct answer: Unilaterally determine the settlement amount
FAR 49.206-1 allows the CO to determine the amount due unilaterally if the contractor fails to submit a timely proposal.
Question 5: A contractor appealing a termination for default has the burden of proving which of the following?
- The government acted in bad faith
- The default was excusable (Correct answer)
- The government breached the contract first
- The contracting officer lacked authority
Correct answer: The default was excusable
In a default termination appeal, the contractor bears the burden of proving that the failure to perform was excusable under FAR 49.402-8.
Question 6: Under FAR 49.303, the government's liability after terminating a cost-reimbursement contract for convenience includes:
- Only fee earned on completed work
- Allowable costs incurred plus a proportionate fee (Correct answer)
- The full contract price minus savings
- Only direct costs with no fee
Correct answer: Allowable costs incurred plus a proportionate fee
FAR 49.303 provides that the government pays allowable costs incurred plus a proportionate fee for a terminated cost-reimbursement contract.
Question 7: Which FAR clause addresses termination for convenience in fixed-price contracts over the simplified acquisition threshold?
- FAR 52.249-1
- FAR 52.249-2 (Correct answer)
- FAR 52.249-4
- FAR 52.249-6
Correct answer: FAR 52.249-2
FAR 52.249-2 is the termination for convenience clause used in fixed-price contracts exceeding the simplified acquisition threshold.
CFCM Terminations 2
Under FAR 49.402-3, before issuing a termination for default notice, the contracting officer must first issue a: