CPCM Contract Closeout and Termination 2 — Questions and Answers
Question 1: Which board or court has jurisdiction over contractor appeals of contracting officer final decisions under the Contract Disputes Act?
- U.S. District Court only
- Armed Services Board of Contract Appeals (ASBCA), Civilian Board of Contract Appeals (CBCA), or U.S. Court of Federal Claims (Correct answer)
- Government Accountability Office (GAO)
- Small Business Administration (SBA) hearing panel
Correct answer: Armed Services Board of Contract Appeals (ASBCA), Civilian Board of Contract Appeals (CBCA), or U.S. Court of Federal Claims
Under the CDA, contractors may appeal to the appropriate Board of Contract Appeals (ASBCA or CBCA) or directly to the U.S. Court of Federal Claims within 12 months of the COFD.
Question 2: A convenience termination settlement proposal should include which of the following?
- Only future anticipated profits on the terminated work
- Costs incurred, settlement expenses, and a reasonable profit on work performed prior to termination (Correct answer)
- All contractor overhead costs for the past three fiscal years
- Costs of bid preparation for the original contract award
Correct answer: Costs incurred, settlement expenses, and a reasonable profit on work performed prior to termination
A termination for convenience settlement covers allowable costs incurred before termination plus settlement expenses and a fair profit on the work done, but not anticipated profits on unperformed work.
Question 3: The quick-closeout procedure under FAR 42.708 is used when:
- The contract must be closed within 30 days of expiration
- Final audit of indirect rates is not yet complete but negotiating a rate now is cost-effective (Correct answer)
- The contractor has filed for bankruptcy before contract completion
- All deliverables are rejected and reprocurement is required
Correct answer: Final audit of indirect rates is not yet complete but negotiating a rate now is cost-effective
Quick-closeout allows the ACO to negotiate final indirect rates directly with the contractor when the cost of waiting for a DCAA audit outweighs the benefit, expediting file closure.
Question 4: In a termination for default, what must the government prove to sustain the default?
- The contractor committed fraud in the original proposal
- The contractor failed to perform a material contract requirement and the default was not excusable (Correct answer)
- The contractor's financial condition worsened after award
- The contractor did not attend required progress meetings
Correct answer: The contractor failed to perform a material contract requirement and the default was not excusable
To sustain a default termination, the government must show a material failure to perform and that the failure was not caused by excusable delays under FAR 49.401.
Question 5: What happens to a default termination that the government later determines was improper?
- It is automatically converted to a termination for convenience (Correct answer)
- The contractor must renegotiate the contract from the beginning
- The government must restart the entire procurement
- The contractor loses the right to any settlement payment
Correct answer: It is automatically converted to a termination for convenience
An improper default termination is converted to a termination for convenience by operation of law, entitling the contractor to a convenience settlement rather than default recovery.
Question 6: Records retention requirements for closed government contracts generally require files to be kept for:
- 2 years after final payment
- 3 years after final payment
- 6 years and 3 months after final payment for most contract files (Correct answer)
- 10 years after contract award date
Correct answer: 6 years and 3 months after final payment for most contract files
FAR 4.805 requires most contract files to be retained for 6 years and 3 months after final payment, ensuring availability for audits and litigation.
CPCM Contract Closeout and Termination 2
Which board or court has jurisdiction over contractor appeals of contracting officer final decisions under the Contract Disputes Act?