Government Contract Terminations

Effectively Resolve Government Termination For Convenience & Default Disputes

Government contract Lawyers Protecting Your Rights and Maximizing Damages.

Call 1-866-601-5518 for a free initial consultation.

 The contract  termination for convenience lawyers at Watson & Associates, LLC help government contractors to properly assess and prepare claims and settlement agreements when the agency has terminated their contracts.  We have develop a successful relationship with small businesses and large organizations that have recieved a letter or notic of contract termination.  Protecting your rights is number one priority.  Thousands or millions of dollars can be at risk. Both the Court of Federal Claims and Armed Services Board of Contract Appeals have ruled against contractors that even though a claim may have been presented, the case was lost due to inadequate preparation or lacking knowledge of the law. Our goal is to maximize damages and help to to avoid costly mistakes. having worked for federal contracting agencies, our attorneys understand that contracting officers deny claims more often than not.

 

Services

Resolve the complex issues lurking in contact termination for convenience actions. There are certain allowable damages in this situation and you have certain time limits to submit your settlement proposal (typically one year). You might also have a valid reason to submit a request for equitable adjustment. Statistics show that agency officials will not always agree to the amounts that you submit. In other circumstances, agencies will always try to negotiate away your statutory entitlements. Our contract lawyers frequently help large and small businesses with:

• Assessment for breach of contract by the government
• Preparation of partial Termination for Convenience
• Direct representation on your behalf with the government
• Complete analysis of relevant and allowable recovery
• Post-termination costs
• Settlement proposal and expenses
• Handling subcontracting claims
• Mitigation of contract damages
• Negotiations
• Resolving matters pertaining to costs of performance incurred up until the time of contract termination
• Termination of construction contracts
• Costs for any reasonable efforts in preparation for future work
• Proving legal requirements of liability, causation, and price adjustment
• Developing and preparing settlement proposals
• Appeals to the Armed Services Board of Contract Appeals (ASBCA)
• GSA Schedules

 

Contract Termination for convenience on a government contract can become huge blow to your company. Your anticipated revenues may be gone and you are not sure what rights you have against the agency. Embedded in federal contracts is a termination for convenience clause. This allows the agency to unilaterally terminate a contract when it is in the best interest of the government. In your specific case, there might be a question as to what is “in the best interest of the government.” Contractors enter into an agreement to perform services or sell products. They also expect to get paid.  When the government  terminates a contract, there are certain statutory damages that you are entitled to receive. Many businesses do not quite understand the allowable damages aspect. This is where we can help you. The government contracts law firm at Watson & Associates, LLC is instrumental in helping federal contractors resolve terminations disputes with the various agencies. 

• Free initial consultations
• Creative fee structures available
• Learn how to protect your rights to appeal before it is too late
• Get legal help for various industry groups
• Hire experienced attorneys that understand the mistakes that agencies make
• Protect your rights 
• Maximize allowable damages
• Assess whether the agency has actually breached the contract 

 

Understand the legal pitfalls  that occur during contract terminations?

When the government terminates a contract for convenience, most companies understand the basics when it comes to settlement proposals. However, the goal is to maximize the allowable damages under the law by submitting sound settlement claims. The facts of your case may reveal circumstances that you might not be aware.  In addition, many find that mid-stream of an appeal process, many contractors introduce new damages as a result of the termination. During the claims process, you must understand how to preserve your legal rights for appeal. If not, you simply waive them. This can be disastrous because the claims was not part of the original settlement proposal. These are but a few reasons.

• Agency terminations are not always lawful
• Agencies will more than likely deny submitted claims
• Unsupported claims will always be denied
• Preserving appeal rights is a commonly-missed aspect of the initial termination process

 

Whether you have a construction contract or services contract dispute, your initial approach is critical to the underlying outcome.

• Get legal advice as to whether certain costs are covered.
• We incorporate case law into your termination settlement proposal (increases your chances of the agency taking your seriously.)
• Understand that agencies incorrectly deny certain claims.
• Ensure timeliness of claim submission.

Know what is allowable under the law. Understanding the efforts and resources that you have expended in preparation for a specific project can mean the difference between a settlement for thousands versus millions of dollars. Understanding the facts to decide whether to submit a request for equitable adjustment can also make difference.  These are the specific details that we embark upon when helping contractors facing termination. At times, there can be a valid challenge to the agency’s reasoning for the termination. This is where the government contract law attorneys at Watson & Associates, LLC can help you.  Take advantage of our free initial consultation ans see samples of our recent government contract cases.

 

Various outcomes from claims cases that could impact you

There are several court decisions that demonstrate the varying types of problems that contractors experience during the termination stages. You must avoid them at all cost.

David J. Needham, ASBCA No. 57133 (Oct. 25, 2010) (elements of costs recoverable under convenience termination proposal of aircraft lease).

Clark Construction Co., ASBCA No. 53914 (Jan. 5, 2010) (no improper delays or errors in Government’s review and rejection of submittals).

Trace Systems, Inc., ASBCA No. 57574 (Oct. 20, 2011) (contract contained latent ambiguity concerning whether R&R travel expenses were reimbursable, and contractor’s interpretation that they were reimbursable was reasonable).

Individual Development Assocs., ASBCA No. 55174 (2007) (net credit to Government on convenience termination settlement).

The Swanson Group, Inc. ASBCA No. 54863 (2007) (timeliness of termination settlement proposal).

Individual Development. Assocs., Inc., ASBCA Nos. 55174, 55188 (2006) (termination claim).

 

Maximize termination damages: The government will always scrutinize your settlement proposal in a termination for convenience matter.  Your goal is to provide sufficient legal support to justify  and maximize your damages. Having a lawyer that will help you to properly assess your damages and negotiate with the agency is critical to the end result.

 

Get aggressive legal representation when the Contracting Officer denies your claim. When the agency denies you claim, you must act quickly. There is a required time for you to file an appeal. At this juncture, you may want to consider having counsel represent your termination rights at the Board of Contract Appeals level. The reality is that agencies do not always follow the law and make mistakes.

 

Understanding the appeals process is critical. At the appellate level, you are subject to procedural rules. You must understand them. If the contracting officer denies your claim, you have the right to appeal. However, you are now entering into the complex procedural rules of litigation. You will require legal help to convince the appeals court that the agency should pay you. Cases can, and often do, get dismissed due to procedural defects. Watson & Associates’ government attorneys have successfully resolved termination claims for large and small businesses from Washington, DC to al other states..

 

Legal scrutiny for agency breach of contract: Contrary to many government contracts attorneys, we know that the first order of business in a termination for convenience case is to see whether the agency has actually breached the contract. Not all terminations are valid. The strategy for the government is to not pay your for anticipated profits, which are not generally allowed in a termination for convenience. This the whole reason for the unilateral clause in your contract.

 

Contract Terminations Will Become More Frequent

As more focus is casted on federal government contracting, companies can expect more contract terminations. In March 2009, President Obama issued a memorandum to the heads of executive departments and agencies concerning government contracting. The President stated that the federal government should consider terminating existing contracts that are “wasteful, inefficient or not otherwise likely to meet the agency’s needs.” The Office of Management and Budget (OMB) was directed to issue a government-wide guidance by July 1, 2009 to create processes to take corrective actions that may include modifying or canceling such contracts.

The President followed up this memorandum in May 2009 with his proposed 2010 budget. In it, approximately $1.5 billion in existing construction programs are to be eliminated. Cuts are proposed for construction programs with the Army Corps of Engineers, EPA, Department of Transportation, etc.

 

Termination for Convenience Damages

The key to any claim is to understand procurement law while preparing your settlement proposal. Under the contract termination clause, you generally cannot claim anticipated profits. Allowable claims can include:

• The contract price for completed services accepted by the Government not previously paid for.
• The costs incurred in the performance of the work terminated with profit, including initial costs and preparatory expenses.
• The cost of settling and paying termination settlement proposals under terminated subcontracts.
• Accounting, legal, clerical, and other expenses reasonably necessary for the preparation of termination settlement proposals and supporting data.
• Storage, transportation, and other costs incurred, reason­ably necessary for the preservation, protection, or dispo­sition of the termination inventory.

 

What Happens if the Agency Does Not Agree to the Amount of Your Claim?

Agencies very seldom pay the entire claim. When you and TCO cannot agree on a termination settlement (or equitable adjustment on the continued portion of a partially terminated contract) and you fail to submit a claim complying with the submission and certification requirements for a final decision under the Disputes clause, the TCO must issue a unilateral determination of any amount due.

The unilateral determination, issued via SF 30, will authorize payment of any amount determined due by the TCO. You must also be advised of the procedure for filing a claim under the Disputes clause of the contract and that the unilateral determination will be considered final unless disputed within 12 months from date of issuance. Upon issuance of the unilateral determination, the TCO must advise you that payment of the amount determined to be due will be made without prejudice to the rights of the Government or the contractor. In the event that you are unwilling to submit an invoice in the amount of the unilateral determination, the TCO should direct payment in that amount. Having a contract termination clause lawyer on your team can make the difference in how much the agency pays you.

 

What are Your Duties as a Prime Contractor?

Get guidance before you act. Upon receipt of the notice of contract termination, the prime contractor should immediately stop all work and terminate all subcontracts related to the terminated portion of the prime contract. The contractor should initiate efforts to preserve property. Actions should be undertaken to solicit settlement proposals from all subcontractors. The contractor is responsible for submission of a settlement proposal and inventory schedule to the TCO. The proposal must be adequately supported.

What Happens When You Fail to Submit a Timely Settlement Proposal?

Termination clauses provide that the contractor’s right of appeal from a determination of the TCO is forfeited if the contractor fails to submit a settlement proposal within the regulatory 1-year time period. Although the clause states that the TCO may accept and act upon a contract termination proposal at any time after the original 1-year time limit or extension thereof, the contractor’s right of appeal from a determination by the TCO, once forfeited for failure to submit a timely proposal, is not restored. Therefore, if a late proposal is accepted, the TCO must notify the contractor that, while the proposal will be considered, the contractor shall have no right of appeal. If an extension is not granted, the TCO should not take any action on any late proposals submitted. The TCO is not required to notify the contractor of an impending unilateral determination due to the contractor’s failure to submit a timely proposal.

 

Do You Need Legal Representation With Termination of Construction Contracts?

Utilize our experience with termination of construction contracts. Under the standard Termination for Convenience Clause in federal construction contracts, the Government has the right to terminate a contract “without fault.” When it does so, the contractor is to be paid for the work it completed but does not receive compensation for profits lost on the unperformed work. Obviously, losing profits is a prospect no contractor wishes to face.

The political forces may prevent some terminations; however, we can expect many projects to be carefully scrutinized. Some contracting officers may take the opportunity to terminate construction projects in which the parties have a troubled relationship. Others may threaten contract termination unless concessions are granted on changes or claims.

 

What Can You Do to Minimize Loss?

Safe approach to termination for convenience cases: Federal contractors that are subject to a contract termination action can rest assure that our government contract lawyers realize that the agency is not immune to unlawful mistakes. We first assess your case to see if the agency is liable for breach of contract. If so, damages will not be limited by the termination clause and you may be entitled to recover greater damages as a result of the breach. We will then help you to prepare the claim paperwork and guide you in the submission phase. As part of our analysis, our firm also reviews case law that supports your position. Proactive approaches to minimize loss can include:

• Always keep documentation to support your termination damages. This is often a problem that can be a significant factor when submitting a settlement proposal.
• Never rely on what the government tells you after notice of contract termination. Contractors tend to rely on the government for help. This can be a fatal mistake simply because there is potentially a conflict of interest problem, or the person giving you advice may often be the COTR/COR. For example, in a construction termination for convenience case, the COTR generally cannot bind the federal government. You may now be faced with a situation where the contracting officer’s decision is contrary. Never attempt to handle a termination for convenience settlement on your own. Click here to see an article on the Termination for Convenience clause.
• Get the help needed to maximize recovery. When the government terminates a contract for convenience, the law allows for certain damages. However, a contracting officer may unlawfully terminate for convenience when in fact there could be a breach of contract case in your favor. This is when our legal counsel can be extremely beneficial.

 

We Represent Businesses in All States

Watson & Associates can represent federal contract termination contractors in in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Utah, Vermont, Virginia, Washington, Washington, DC, West Virginia, Wisconsin, and Wyoming.

 

Contractor Tips

Termination for Convenience is inappropriate when the government does not order the guaranteed minimum amount under an Indefinite Delivery Indefinite Quantity (IDIQ) contracts. This can be very harmful in construction projects. However, there is no breach of contract if the government cancels the unordered portion during performance. If the government waits until after the performance period to terminate for convenience, contact a government contracts attorney at our office for immediate help.

Never guess on your damages. Contractors sometimes find themselves in a situation where they are depending upon the contracting officer to tell them what to do and what damages they cannot get. Others may try to read the FAR and self-interpret the rules. This can be a costly mistake because you may overlook important rights. Our contract termination lawyers can help you to avoid such pitfalls.

Never assume that a termination clause flows down to subcontractors. This is one of the most common disputes between prime contractors and subcontractors. The Christian Doctrine does not apply to subcontractors. Therefore, without having the expert advice of a government contract law firm to advise you, your company may be stuck with payment to a subcontractor for lost profits.

• Requirements contracts. The Government’s failure to order all of its needs under a requirements contract is a breach of contract if the agency terminates the contract for convenience. If the agency fails to do this, then you might be entitled to recovery anticipatory profits.
• Bad faith is difficult to prove. A Termination for Convenience is a breach if it is made in bad faith or is an abuse of discretion. To prove bad faith, courts require you to show the government’s intent to harm the contractor and to provide proof by clear and convincing evidence. If you believe that you are subject to bad faith case, call one of our attorneys for immediate help at 1-866-601-5518. 

 

Include Appropriate Clauses in Subcontracts

We guide you in federal subcontracting matters. As government contract attorneys, we often advise our clients (especially in construction contracts) that they cannot automatically apply the government’s Termination for Convenience clause into subcontracts. There must be an appropriate expressed clause in the subcontract that discusses Termination for Convenience. Failure to include such a clause could subject prime contractors to lost-profit claims from subcontractors. Contact Watson & Associates for help on this topic.

You must understand the Christian Doctrine. When you sign a government contract, a Termination for Convenience clause is read into every contract, even if the agency fails to include it. You cannot avoid a Termination for Convenience simply because the agency failed to incorporate it. See G.L. Christian & Associates vs. United States. 

 

Termination for Default Rights

Termination for Default – Protect our reputation. Besides a criminal conviction or debarment or suspension, termination for default is one of the most severe agency sanctions to be imposed upon a government contractor. In this situation, you want to ensure that you have adequate legal representation from experienced government contract attorneys. Watson & Associates represent large corporations and small businesses that are faced with what is commonly referred to as “the kiss of death in government contracting.”

• Get help with the acceptable defenses to termination for default actions
• Get assistance in negotiating a termination for default into a termination for convenience
• Avoid and defend possible suspension and debarment

 

Tip: If the government’s failure to cooperate created the problems that prevented timely performance, a termination for default is improper. See CJP Contractors, Inc. v. U.S., 45 Fed. Cl. 343 (1999).

If you are in a situation that can possibly cause a termination for default, contact our contract termination defense lawyers. We can possibly protect your rights and avoid this catastrophe.

 

Get Experienced Representation with Termination for Default Contracts

If you are exposed to this adverse action, you have rights under federal procurement law. The agency has substantial power to terminate contracts. However, you can rest assured that not all actions are lawful. This contract termination clause permits the government to terminate the contract if you fail to perform on time, fail to perform with diligence to ensure timely completion, or fail to perform work in accordance with the requirements of the contract. The government has the right to complete the work and charge the contractor for the excess costs incurred following a termination for default. Both the contractor and its surety would then be liable for these costs.

 

Our contract termination lawyers can help with allowable costs. When you hire our government contract-termination lawyers, we also fight for other additional costs that are commonly missed by businesses attempting to settle with the federal agency. For example, the costs associated with the preparation of the settlement proposal are recoverable expenses, to include accounting, legal, clerical, and other expenses reasonably necessary for the preparation of the Termination Settlement Proposal and supporting data.

 

Other Government Contract Services

In addition to handling your termination-contract litigation and negotiations, Watson & Associates’ attorneys also provide a wide array of federal procurement support, including:

• Compliance
• Construction
• Procurement fraud
• Government investigations
• Consulting services
• SBA 8a Certification
• Central Contractor Registration
• Teaming agreements and joint venture agreements
• Suspension and debarment
• Subcontracting matters
• Government procurement training
• Terminations
• RFP and proposals
• Bid protests
• FAR interpretation
• Marketing to the federal government
• GSA schedules
• Claims

 

Nationwide & Overseas Assistance

Federal law allows our government contract lawyers to represent construction and service contract clients that need Termination for Convenience assistance regardless of their resident state. Watson & Associates can represent businesses in Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, U.S. Virgin Islands, Utah, Vermont, Virginia, Washington, Washington, DC, West Virginia, Wisconsin, and Wyoming.

Cities in which we practice include Anchorage, AK; Atlanta, GA; Austin, TX; Chicago, IL; Colorado Springs, CO; Dallas, TX; Denver, CO; Indianapolis, IN; Las Vegas, NV; Los Angeles, CA; Miami, FL; Philadelphia, PA; San Antonio, TX; San Diego, CA; San Francisco, CA; San Jose, CA; Santa Clara, CA; and Tampa, FL.

 

Contact us for Immediate Help

If you are a prime contractor, subcontractor, or construction surety facing a termination for default or Termination for Convenience, contact our attorneys online or call us toll free at (866)601.5518