FAR Termination for Default Lawyers
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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.
AVOID COMMON PROBLEMS WITH DEFAULT TERMINATIONS
Many federal contractors, including small businesses fail to address critical issues the either the cure notice response or show cause response stages. When they appeal the default, they will spend thousands in unnecessary litigation and motions to dismiss from the government attorneys. At Watson & Associates, LLC, our government contract termination for default consulting team and T4D Appeal attorneys will comb through the facts and assess whether the contracting officer’s actions violated procurement law or was unreasonable.
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.
WHAT MUST GOVERNMENT SHOW BEFORE ISSUING A FAR TERMINATION FOR CAUSE?
When the contracting officer issues a contract termination for cause under FAR 52.249-8 or FAR 49.4, and alleges that you have failed to meet your contractual obligation under the contract cancellation clause, it must defend any appeal filed by the contractor.
In a T4D case, if the contract was terminated before the actual completion date, the agency must show that use of the FAR Termination for Default Clause was proper and correct. If not, the agency could be found to have issued an unlawful decision. See Case Where Contractors’ Mistake in Bid Pricing Causes Government to Terminate for Default and Court Gives no Mercy.
FAR TERMINATION FOR DEFAULT CLAUSE 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).
COMMON REASONS WHY YOU MAY NOT WIN AN APPEAL
- As a federal contractor you fail to complete project by completion date specified in contract. The Court of Federal Claims on appeal found that Government did not waive the contract defaults and terminations rights because it consistently informed contractor after completion date had passed that the contractor was in default, that the Government was considering terminating for default, and that the Government intended to assess liquidated damages. State Corps v. United States, No. 14-1121 C (Feb. 15, 2019)
- The Court of Federal Claims decided that a partial termination for convenience was improper because agency Contracting Officer testified she did not exercise her own independent judgment in ordering it, but contractor did not establish that the invalid termination for convenience or any other alleged government actions or breaches excused its subsequent failure to perform or invalidated the subsequent default termination). Securiforce International America, LLC v. United States, No. 12-759 C (Apr. 12, 2016)
TERMINATION FOR DEFAULT PROCESS
If your company has been termination from a government contract for default, getting the decision overturn can sometimes fall on whether the contracting officer followed the mandated requirements of the default clause or the Federal Acquisition Regulations. For example, FAR 49.402-3 in part states:
(4)If the contractor is a small business firm, the contracting officer shall immediately provide a copy of any cure notice or show cause notice to the contracting office’s small business specialist and the Small Business Administration Regional Office nearest the contractor. The contracting officer should, whenever practicable, consult with the small business specialist before proceeding with a default termination (see also 49.402-4).
(f) The contracting officer shall consider the following factors in determining whether to terminate a contract for default:
(1) The terms of the contract and applicable laws and regulations.
(2) The specific failure of the contractor and the excuses for the failure.
(3) The availability of the supplies or services from other sources.
(4) The urgency of the need for the supplies or services and the period of time required to obtain them from other sources, as compared with the time delivery could be obtained from the delinquent contractor.
(5) The degree of essentiality of the contractor in the Government acquisition program and the effect of a termination for default upon the contractor’s capability as a supplier under other contracts.
(6) The effect of a termination for default on the ability of the contractor to liquidate guaranteed loans, progress payments, or advance payments.
(7) Any other pertinent facts and circumstances.
(g)If, after compliance with the procedures in paragraphs (a) through (f) of this 49.402-3, the contracting officer determines that a termination for default is proper, the contracting officer shall issue a notice of termination stating-
(1) The contract number and date;
(2) The acts or omissions constituting the default;
(3) That the contractor’s right to proceed further under the contract (or a specified portion of the contract) is terminated;
(4) That the supplies or services terminated may be purchased against the contractor’s account, and that the contractor will be held liable for any excess costs;
(5)If the contracting officer has determined that the failure to perform is not excusable, that the notice of termination constitutes such decision, and that the contractor has the right to appeal such decision under the Disputes clause;
(6) That the Government reserves all rights and remedies provided by law or under the contract, in addition to charging excess costs; and
(7) That the notice constitutes a decision that the contractor is in default as specified and that the contractor has the right to appeal under the Disputes clause.
CONTRACTOR DEFENSES TO TERMINATION FOR DEFAULT
If you are looking to overturn a FAR termination for default of a government contract, our federal contract dispute lawyers will help you look to the following contractor defenses.
- Excusable delays
- Any waiver of contract due dates
- Contracting officer’s failure to follow procedural requirements
- Defective specifications and performance impossibility
- Contracting Officer abuse of discretion
- Failure to exercise discretion
TERMINATION FOR DEFAULT CONVERTED TO A TERMINATION FOR CONVENIENCE?
The following are some of the situations where the court 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)
CONSIDERATION OFFAR TERMINATION FOR CAUSE FACTORS
What must the contracting officer consider before issuing a government contract default action?
FAR (49.402-3(f)) contract termination for default clause shows a list of things that the contracting officer must consider before terminating a contract for default.The language is not discretionary. However, this can be a potential way to reverse you default termination. The FAR factors include:
- The terms of the contract and applicable laws and regulations.
- The specific failure of the contractor and the excuses for the failure.
- The availability of the supplies or services from other sources.
- The urgency of the need for the supplies or services and the period of time required to obtain them from other sources, as compared with the time delivery could be obtained from the delinquent contractor.
- The degree of essentiality of the contractor in the Government acquisition program and the effect of a termination for default upon the contractor’s capability as a supplier under other contracts.
- The effect of a termination for default on the ability of the contractor to liquidate guaranteed loans, progress payments, or advance payments.
- Any other pertinent facts and circumstances.
Can a Contractor Terminate a Government Contract for Default?
As a practical matter, no: However, the contract may want to consider filing a Contract Disputes Act claim where it alleges breach of contract. This is an important consideration because if you proceed directly to court, your case may be dismissed for failure to first file the claim with the contracting officer and get a final decision.
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.
U.S.NATIONWIDE AND OVERSEAS CIVILIAN CONTRACTOR LAWYER HELP
Our termination for default government contracts lawyers provide legal counsel to defense contractors throughout the United States and overseas including Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington, Washington DC, West Virginia, Wisconsin, Wyoming, and Virgin Islands. Call our federal contract appeal lawyers and overseas civilian contractor lawyers today for immediate help. 1-866-601-5518. We help with default contract cases in Dubai, Afghanistan, Iraq contractors and Saudi Arabia when contractor defaults on a contract for the US Government.
CALL OUR GOVT 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