Joseph Feibel – January 7, 2018
Question:
What is termination for default; and when does it occur?
Answer:
Termination for default (or cause) occurs when the contractor fails to perform in accordance with the contract. The Government should terminate a contract only when termination is it its best interest. A contract is terminated for default (or cause) when there is no other alternative for obtaining performance given the current contractor’s problems and deficiencies, and the government has a sustainable case for default termination.
The word default is used in government contracting for noncommerical item contracts in accordance with FAR Part 49.
Default is defined as “failure to discharge a duty” referring in this case to the contractor’s failure to perform the noncommerical contract and the resultant termination of the contract by the government.
The word cause is normally used when terminating a commercial item contract in accordance with FAR Part 12. Cause is defined as “that which effects a result” referring in this case to the contractor’s failure to perform the commerical contract the resultant termination of the contract by the government.