Termination for Convenience & Default Flashcards
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Under FAR Part 49, which type of termination allows the government to stop work on a contract for any reason, even without contractor fault?
Answer: Termination for Convenience
Termination for Convenience (FAR Part 49) allows the government to terminate a contract at any time without fault on the contractor's part.
When a contract is terminated for default, what is the contractor generally entitled to receive?
Answer: Compensation only for work completed and accepted before termination
In a termination for default, the contractor receives payment only for work completed and accepted prior to termination, with no settlement costs or anticipated profits.
What is the minimum cure notice period a Contracting Officer must provide before terminating a contract for default due to a contractor's failure to perform?
Answer: 10 calendar days
FAR 49.607 requires the Contracting Officer to issue a cure notice giving the contractor at least 10 days to cure the failure before a default termination.
Under FAR Part 49, which of the following is NOT an allowable cost in a termination for convenience settlement?
Answer: Anticipated profits on the terminated portion of work
Anticipated profits on terminated work are not allowable in a termination for convenience settlement; only actual costs and reasonable profit on work performed are recoverable.
A 'show cause' notice is typically issued by the Contracting Officer when the contractor:
Answer: Is in imminent danger of failing to meet a delivery schedule
A show cause notice is issued when the contractor is in danger of defaulting, requiring the contractor to explain why the contract should not be terminated for default.
Which FAR clause is typically included in fixed-price contracts to authorize the government to terminate for convenience?
Answer: FAR 52.249-1
FAR 52.249-1 (Termination for Convenience of the Government — Fixed-Price) is the standard clause authorizing government termination for convenience in fixed-price contracts.
When a contractor believes a termination for default was improper and a court or board later agrees, what is the legal effect?
Answer: The termination is converted to a termination for convenience
If a termination for default is found to be improper, it is converted to a termination for convenience, entitling the contractor to a full convenience settlement.