CPCM Contract Closeout and Termination 1 — Questions and Answers
Question 1: Which of the following is the primary difference between termination for default and termination for convenience?
- Termination for default allows the contractor to recover all costs incurred
- Termination for convenience compensates the contractor for costs incurred plus reasonable profit, while default may result in reprocurement cost liability for the contractor (Correct answer)
- Termination for convenience applies only to fixed-price contracts
- Termination for default requires a 30-day cure notice in all circumstances
Correct answer: Termination for convenience compensates the contractor for costs incurred plus reasonable profit, while default may result in reprocurement cost liability for the contractor
Under termination for convenience (FAR 49.2), the contractor recovers costs plus a reasonable profit; under default (FAR 49.4), the contractor may owe the government excess reprocurement costs.
Question 2: The statute of limitations for a contractor to file a claim under the Contract Disputes Act (CDA) is:
- 1 year from the date of the contracting officer's final decision
- 6 years from the date the claim accrued (Correct answer)
- 3 years from the date of contract completion
- 90 days from the date of the dispute
Correct answer: 6 years from the date the claim accrued
The CDA imposes a 6-year statute of limitations running from the date the claim accrued, meaning the date the contractor knew or should have known the basis for the claim.
Question 3: What is the purpose of a release of claims in a contract closeout?
- To confirm the contractor has paid all subcontractors in full
- To document the contractor's waiver of any further claims against the government for contract performance (Correct answer)
- To authorize the government to retain withheld payments indefinitely
- To certify that all deliverables were accepted by the government
Correct answer: To document the contractor's waiver of any further claims against the government for contract performance
A release of claims is a bilateral agreement in which the contractor agrees that the final payment settles all outstanding issues, releasing the government from further claims.
Question 4: Under the Contract Disputes Act (CDA), a contracting officer's final decision (COFD) must be issued within what timeframe for claims not exceeding $100,000?
- 30 days of receipt of a written request for a final decision
- 60 days of receipt of a written request for a final decision (Correct answer)
- 90 days of receipt of a written request for a final decision
- 180 days of receipt of a written request for a final decision
Correct answer: 60 days of receipt of a written request for a final decision
FAR 33.211 requires the contracting officer to issue a final decision within 60 days for claims of $100,000 or less when the contractor requests an expedited decision.
Question 5: Which of the following actions must be completed before a contract can be officially closed out?
- The contractor must submit a bid on the follow-on contract
- All deliverables accepted, final invoice paid, and all open actions (audits, property disposal) resolved (Correct answer)
- The contractor must provide a performance bond for the warranty period
- The government must publish a notice of contract completion in SAM.gov
Correct answer: All deliverables accepted, final invoice paid, and all open actions (audits, property disposal) resolved
Contract closeout requires confirming delivery/acceptance, resolving all financial and property matters, completing audits, and processing the final payment before the file is closed.
Question 6: Excess reprocurement costs in a termination for default are:
- Costs the government incurs to complete the work through another contractor, charged back to the defaulted contractor (Correct answer)
- Costs the contractor incurs to complete performance after being cured
- Settlement costs paid to the terminated contractor for work already performed
- Overhead costs the government charges for administering the default process
Correct answer: Costs the government incurs to complete the work through another contractor, charged back to the defaulted contractor
If the government must reprocure after a default termination, the defaulted contractor is liable for the difference between the defaulted contract price and the cost of reprocurement.
CPCM Contract Closeout and Termination 1
Which of the following is the primary difference between termination for default and termination for convenience?