Government Contract Cure Notice

Our Government Contract Lawyers have extensive experience assisting clients in responding to cure notices, show cause notices, and terminations for default.  Please call us at (202) 609-7386 or send an email if we can be of assistance.   

Cure Notice - Avoiding Contract Termination:  

A termination for default can have a severe toll upon a government contractor.  First, the contractor suffers the loss of revenue from the terminated contract and will likely have difficulty getting any further payments under the contract.  Second, the contractor will have difficulty getting new work because of the impact on past performance.  Third, the contractor is liable for reprocurement costs the Government incurs to higher someone else to do the job.  Fourth, a termination for default can, but typically does not, result in debarment from government contracting.  Thus, you should make every effort to avoid a termination for default. 

The FAR includes several different termination clauses, but all Federal Government Contracts include a clause allowing the Government to terminate for default.  The clause allows the government to terminate a contract entirely or in part if a contractor fails to fulfill their duties under the terms of the agreement or fails to properly comply with a cure notice.

In most cases, prior to termination the contracting officer will issue a cure notice and allow you ten days to respond.  You should obtain legal counsel as soon as the contracting officer sends a cure notice or show cause letter. Many federal contractors fail to adequately react to the notices. As a result, avoidable terminations are not avoided and favorable facts upon which an appeal may occur are hindered.

If you are trying to avoid a termination, responses should not be confrontational and generally should state that you are ready, willing, and able to perform the contract in accordance with its terms.  Each situation is different, but here are some basics to keep in mind - 

• It's crucial to present the contracting officer with a detailed and well organized response that provides all pertinent information.
• Your response should list the legal basis for why the contract should not be terminated.
• You should specifically address each issued raised in the cure notice and how you are going to correct it.
• Generally, you should not admit fault, especially if you are not at fault, but do so diplomatically.