FAR Termination for Default & Contract Termination for Cause
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If you are facing a termination for default (termination for cause) of a federal government contract, your business career is at risk because your past performance can be impacted when bidding on future federal projects. The actual default process occurs as early as when the contracting officer issues a letter of concern; a cure notice, and show cause letter.
In fact, many agencies are already drafting the paperwork for issuing a default termination even before the show cause response returns.
If the contracting officer has asserted the termination by default clause and has issued you a termination letter, getting prompt legal help can make the difference in getting the termination overturned or even converted to a termination for convenience.
CONTRACT DEFAULTS AND TERMINATIONS APPEAL & LITIGATION SERVICES
As government contract termination by default clause lawyers, we provide:
- Assessment of notice to cure and show cause government contracting decisions
- FAR Cure notices and related documents for construction contracts or contracts acquiring supplies and services
- Construction contract rights and minimize the changes of being liable to the government
- Service contracts dispute resolution and whether you are liable to the government for damages
- Failure to perform contractor default cases – unlawful termination – failure in acquiring supplies on time
- Substantial completion defenses if applicable
- Corps of Engineers construction default legal representation
- Legal analysis of government fault outside of the contractor’s responsibility
- Legal review for the government’s breach vs default when issued a contract termination letter
- Review of specific facts that create legal defenses for the contractor such as constructive change matters
- Detailed legal analysis and preparation of your appeal to the Boards of Contract Appeals and COFC
- A thorough assessment of the relevant facts leading to the notice of default
- Potential for negotiations in contract disputes.
- We handle construction contract defaults and terminations T4D appeal cases.
- We provide help with converting default decisions into a termination for convenience.
To Speak in Confidence With a Government Contract Attorney About Appealing a T4D Default Case, Call 1-866-601-5518 for a FREE Initial Consultation.
After receiving a letter of default on a contract with the federal government, there may be legitimate reasons why you could not comply with the terms and conditions of the contract. However, you must communicate those reasons either in the response to the cure notice or the show cause response. Waiting until you appeal the termination for default is too late.
Compared to a termination for convenience, if the federal government issues your company a termination for default letter (also referred to as FAR Part 49 default or T4D under FAR 49), without sound legal representation for dispute resolution, you may end up owing the government thousands of dollars or giving up your legal rights.
WHAT IS A FAR TERMINATION FOR DEFAULT (T4D)?
The Federal Acquisition Regulations T4D or FAR termination for cause clause, which is secretly embedded into your contract, allows the government to terminate the contract for cause. This means that when you do not follow the terms of the contract, are late performing or even gives the contracting officer a reasonable belief that your company will not perform the contract as agreed (anticipatory repudiation), the agency can issue a default letter.
- Be mindful that the government can terminate the contract entirely or in part. Very seldom would you see a contract default in part but it does happen from time to time.
FAR TERMINATION FOR CAUSE TIPS
Many government contractors or their attorneys simply focus on the facts at hand when handling T4D cases. However, while this is admirable, experienced contract termination attorneys also keep track of preservation of rights for a potential appeal.
- You want to make sure that all of the critical issues are addressed at the contracting officer level – or least brought up. This is especially true when the CO issues a show cause notice for non performance.Waiting for the appeal process is simply too late.
- FAR 33.211(a)(4)(v) and 41 USC 605(a) require that contracting officers’ decisions advise contractors of the specifics of their appeal rights. If the contracting officer’s decision does not do so and you demonstrate that you were actually prejudiced by the missing or erroneous information, the 90-day appeal period to the Board does not begin to run. Decker & Company v. West, 76 F.3d 1573, 1579-80 (Fed. Cir. 1996); Ra-Nav Laboratories, Inc., ASBCA No. 49211, 96-2 BCA ¶ 28,514 at 142,396, recons. denied, 97-1 BCA ¶ 28,650, aff’d, 137 F.3d 1344 Cir. 1998).
TERMINATION FOR DEFAULT CONVERTED TO A TERMINATION FOR CONVENIENCE?
The following are some of the situations where the ASBCA, CBCA or Court of Federal Claims may rule in your favor as the appellant seeking to convert a termination for default into a termination for convenience.
- If you refuse to perform further on a government contract due to multiple instances of abuse suffered from government employees, culminating in a false allegation that you had assaulted your government supervisor. Court of Federal Claims found that subsequent termination by default was made in bad faith and is converted to termination for convenience. Brian Bowles v. United States, No. 14-198 (Aug. 8, 2019)( Bad faith and breach of contract).
- Contract agency failed to consider several required factors in FAR 49.402-3(f)(1)-(7) prior to terminating the contract for default and relied instead on analysis of government official who had history of hostility toward contractor and whose own analysis was deficient. On appeal the Court of Federal Claims converted the default termination to termination for convenience. Alutiiq Manufacturing Contractors, LLC v. United States, No. 15-881 C (June 27, 2019)
DID THE CONTRACTING OFFICER DOCUMENT THE REASONS FOR THE TERMINATION?
Some courts and even government attorneys may choose not to pay any attention to the contracting officer’s memorandum in support of the default termination. May agencies refer to this document as the “Determination and Findings (D&F).
As mandated by the Federal Acquisition Regulations, “When a contract is terminated for default or a procedure authorized by 49.402-4 is followed, the contracting officer shall prepare a memorandum for the contract file explaining the reasons for the action taken.
When trying to overturn a termination for default or convert it to a termination for convenience, our contract dispute lawyers understand that the real reasons sometimes surface after the termination decision has been already issued.
CONTRACT TERMINATION FOR DEFAULT APPEALS TO THE FEDERAL CIRCUIT COURT
If you received and adverse decision from the Court of Federal Claims or ASBCA or CBCA, Watson’s appellate lawyers can also litigate appeals to the U.S. Court of Appeals for the Federal Circuit. Our government contract appeals lawyers understand the importance of having a default termination overturned and impact to your business. When you appeal cases from the Court of Federal Claims, the standard is uniquely different than at the trial court level.
- A contract default termination is a government claim which is “immediately appealable.
- Common disputes arise on appeal as to whether there was a contracting officer’s final decision under the CDA.
Effect of Contract Defaults and Requests for Reconsideration
One of the issues raised when appealing a government contract termination for cause is whether a Request for Reconsideration suspends the appeal deadline. The Court of Appeals for the Federal Circuit in the case of Guardian Angels Medical Service Dogs, Inc. v. United States, No. 2015-5058 (Jan. 8, 2016) stated that ” In many situations, a timely request for reconsideration is sufficient to render an agency decision non-final and thereby suspend the running of the appeal period. See, e.g., Locomotive Eng’rs, 482 U.S. at 284–85 (explaining that under the Hobbs Act, 28 U.S.C. § 2344, a petition for administrative reconsideration stays the running of the limitations period until the petition has been acted upon by the agency); Clifton Power Corp. v. FERC, 294 F.3d 108, 110 (D.C. Cir. 2002) (“A request for administrative reconsideration renders an agency’s otherwise final action non-final with respect to the requesting party.”)
CALL OUR GOVERNMENT CONTRACT TERMINATION FOR DEFAULT APPEAL LAWYERS
If you have been issued a service contract termination for default letter allegedly because the CO thinks that there may be case when a contractor fails to perform the services for commercial item contracts, a contractor defaults on contract for construction or need immediate help a pending case, call our FAR termination for default government contracts T4D attorneys at 1-866-601-5518 for a Free Initial Consultation.
Get a FREE CONSULTATION
- The difference between termination for convenience and default.
- Understanding the Termination Default Clause
- Responding to cure notices
- Costs associated with termination of contract for cause T4Ds
- Termination of contract appeals and being proactive
- Grounds for termination of contract.
- Breach of the Implied Covenant of Good Faith and Fair Dealing
- T4D Process and Appeals
- Learn how appeal courts look at government contractor termination for cause cases