Contract Law & Commercial Transactions Flashcards

What is a 'termination for convenience' in government contracting?

Answer: The government's right to end a contract when it is in its interest, with compensation to the contractor

The government may end a contract for its convenience, paying allowable costs and a reasonable profit on work done.

A subcontractor needs access to classified information. What must the prime contractor generally verify before releasing it?

Answer: The subcontractor's valid facility clearance at the required level and safeguarding capability

Primes must confirm the subcontractor has the appropriate facility clearance and safeguarding capability before releasing classified information.

Which contract type reimburses allowable costs plus an additional fee?

Answer: Cost-plus-fixed-fee

Cost-plus-fixed-fee contracts reimburse allowable costs and add a fixed fee.

What is the 'statute of frauds' principle?

Answer: Certain contracts must be in writing to be enforceable

The statute of frauds requires certain categories of contracts, such as those over a set value or for land, to be written.

Who is the individual with authority to bind the government to a contract?

Answer: Contracting officer

Only a warranted contracting officer can enter into and modify contracts on behalf of the government.

A prime contractor receives a DD 254 revision that raises classification level. What is the FSO's best next step?

Answer: Review the changes and flow down updated guidance to affected cleared subcontractors as required

The FSO must review the revision and ensure applicable changes are communicated to subcontractors under their DD 254s.

What is 'breach of contract'?

Answer: A failure to perform a contractual obligation without legal excuse

A breach occurs when a party fails to perform its obligations without lawful justification.