Government Contract Termination for Default

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.   

Government Contract Termination for Default:  

As discussed here, if you receive a cure notice, you should take it very seriously.  A default termination will have a significant impact upon your company and should be avoided if possible.  One of the long term impacts on your company will be the negative past performance which may prevent you from obtaining future contracts that you otherwise could have won.

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.

Once the contract is terminated, the Government will not reverse the termination.  If the contract was improperly terminated for default, then the termination will be converted to one for the convenience of the Government, which will allow you to recoup costs not available for a default termination.

Because of the impact of a default termination on a company's past performance and the potential to have to pay the Government its reprocurement costs, companies often find it wise to appeal the default termination, regardless of the value of the lost contract.