Termination for Default
Many companies may not realize that when the agency issues you a cure notice, the agency probably has already drafted the default letter. Termination for default or cause will have a very drastic impact on your business. If you are currently in the cure notice show cause phase, you want to seriously consider bringing counsel on board.
What is a Termination for Default?
A Termination for Default (otherwise referred to as a contract termination for cause or T4D) in federal government contracting relates to either complete termination of the contract or partial termination. This depends on the specific facts and circumstances of your particular case.
The termination of the contract can be a result of the contractor’s actual or anticipated failure to meet the contract requirements. Contract termination for cause is the legal term used for a government contract Termination for Default in an award under FAR PT 12 – acquisition of commercial items. Whereas, termination for default is used for non commercial contract awards.
What Happens If You Default on a Government Contract?
When the contracting officer issues a termination for default, you can face some pretty egregious consequences. This is why is it very important to have a viable understanding of your legal rights. Especially, for small business and construction companies, the immediate future of revenues and profit for the business is at risk
Terminated contractors can also face the risk of having to return issued progress payments to the government.
A defaulted contract can also cause the contractor to reimburse the government for re-procurement costs. You, as the terminated contractor, will now have to litigate the matter on appeal in hopes of getting the default converted to a termination for convenience.
The ultimate consequence, if you default on a government contract, is that it can severely impact your past performance ratings and the ability to secure future government projects. This is why having an experience termination for default appeal attorney is essential.
The government contract termination for default lawyers at Watson & Associates, LLC provides aggressive legal counsel to small businesses and large companies doing business with the United States government and seeking to appeal the default decision to an appellate court.
We will first assess the facts in your case and consider the agency’s reason for default, assess whether there is merit to appealing the contracting officer’s decision and analyze the next steps with your top management staff.
- We understand the limitations and rules that contracting officers must follow when issuing government contract termination for default actions under FAR Part 49.
- When the Federal Government terminates your contract for default or cause, it can actually recover damages from your company. It can also recover, unliquidated progress payments, and the excess costs of procuring the same or similar items or services.
When the contractor defaults on a contract, the process to overcome it can be an uphill battle. Understanding how the government is supposed to go through the process before terminating for cause is very beneficial to the company.
- A successful termination for default can cripple your company
- The government does make serious mistakes
- By leveraging the right government contract dispute attorney, you can uncover the government’s mistakes and get the default termination converted to a termination for convenience.
GOVERNMENT CONTRACT TERMINATION ATTORNEY SERVICES
As federal procurement and contract default attorneys, we help clients throughout the United States and overseas to navigate through the termination for default process and also with the following:
- Responding to cure notices and show cause letters
- Appealing the contract termination for default action to the respective Board of Contract Appeals or Court of Federal Claims
- Litigation and negotiations to have defaults turned to termination for convenience
- Consulting and preventive guidance
- FAR compliance and outside counsel services
- Help with terminations that lead to investigations and suspension and debarments
What is the termination for default clause (FAR Part 49)?
Government contracts can be terminated in part or whole by the contracting officer (CO). The Federal Acquisition Regulations (FAR Part 49) allows the CO to protect the government’s interests when he or she makes a reasoned decision that the government interests are at risk. It means that the government must prove that there is a justifiable reason for the ultimate decision.
Who must prove the case?
When government contractors challenge a default termination of contract, it is the government who must prove that termination for cause for valid. See Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987); see also Aptus Co. v. United States, 61 Fed. Cl. 638, 646 (2004) (“When a contractor challenges the government’s default termination of his contract, the government bears the burden of proof as to the propriety of said termination.”).
What can lead to a default termination?
During the contract performance stage, your company may display signs that lead the government to believe that you will not meet the contract requirements ( anticipatory repudiation) and that the agency is at risk of non-performance. The contracting officer can issue you a cure notice, and later a show-cause letter. If any of these tools fail, then the agency may issue a notice of contract termination.
How does our government contract termination for default lawyers help you
When the contracting officer issues a termination for default notice, you must act quickly. If you plan on appealing a government contract termination for cause under FAR Part 49, you will want to retain legal counsel for proper representation in one of the federal procurement appeal courts.
- Help with reconsideration requests
- Assessment of termination for cause cases
- Preparing for appeals
- Litigation support
Watson’s government contract lawyers provide aggressive legal representation to clients across the United States and overseas. We assess cure notice responses and show cause letters to the contractor. We help clients to minimize any response claims that the contracting officer attempts to come after them. We help with various termination clause actions, legal defenses, termination appeals to the various courts, and more. At the end of the day, our government contract appellate attorneys work hard to help you accomplish the goal of converting default decisions into a termination for convenience.
Government Contract Termination Litigation and Appeals
When the contracting officer issues a notice of contract termination, you can appeal the decision to the Civilian Board of Contract Appeals, Armed Services Board of Contract Appeals (ASBCA) or United States Court of Federal Claims (COFC). In either case, you must act promptly. Each court has its own rules that you must follow.
Be mindful that appealing government contract default decisions to the U.S. Court of Appeals for the Federal Circuit also have certain deadlines and court rules to follow. Our attorneys can explain and represent you in these matters.
Tips to help you get the most from a consultation with your government contract default terminations lawyer.
- Before your consult, write down the questions you want to be answered.
- Have a decision-maker available to decide the next steps and make decisions about any litigation costs etc.
- At the consultation, write down the options and key points that your contract default lawyer discusses.
For immediate help with government contract litigation and FAR Part 49, call the Watson & Associates law firm at 1-866-601-5518.
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- The difference between termination for convenience and default.
- Understanding the FAR Default Clause
- Responding to cure notices
- Costs associated withT4Ds
- Termination of contract appeals and being proactive
- Grounds for terminating your 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