1. Contract Termination and Excusable Delay

2. Contract Termination and Excusable Delay
Definition: An action taken pursuant to a contract clause in which the contracting officer unilaterally ends all of part of the work.
Types of terminations:
Termination for convenience- in the best interest of the government
Termination for Cause/Default- Contractor has not performed
Cancellation- There is no longer a need for the work

3. Contract Termination and Excusable Delay
Termination for Cause/Default can be for:
Failure to perform
Failure to adhere to schedule
Failure to comply with specific terms and conditions
Failure to comply with other terms and conditions in contract
Repudiation- “just ain’t gonna do it”

4. Contract Termination and Excusable Delay
Commercial Contract Termination:
UCC Section 2-309
Requires good faith of all parties
Notice given in reasonable time
Insures other party received unless:
Contract states that in breach or specific cause no notice agreement will be provided
Termination by mutual consent
Bilateral Agreement required

5. Contract Termination and Excusable Delay
Government Contract Termination
FAR 49- identifies government terminations except commercial items subject to FAR 12
Basically 2 types:
Convenience:
Contract no longer serves the best interest of the government due to priorities, end of program, downsizing, other significant events not anticipated
Default:
Contractor failed to perform one or more actions required in the contract
General rule: No prior notice entitlement unless contract provision requires it.

6. Contract Termination and Excusable Delay
Notices if required:
Cure Notice: states that contractor will be subject to default termination unless it corrects a specific contract noncompliance or makes necessary progress to meet the delivery schedule
Show Cause Notice: asks for explanation of why the contractor should not be terminated for default and affords the contractor an opportunity to “show cause” as to why a termination for default should not be assessed.
No Cost Termination: issued if the requirement no longer exists and the contractor is not liable to the government for damages the contracting officer may execute a “no-cost termination settlement” FAR

7. Contract Termination and Excusable Delay
Government:
Excusable Delay :Protects the contractor from penalty for
Acts of God or public enemy
Acts of the Government in either its sovereign or contractual capacity
Fire
Flood
Quarantine
Strikes
Epidemics
Unusual Severe Weather
Freight Embargos
Commercial
Force Majeure (Superior Force) protects the contractor from unexpected or uncontrollable event that upsets the plan.

8. Contract Termination and Excusable Delay
Contract Cancellation
Usually occurs shortly after contract execution
Seller realizes they cannot perform
No cost to either party
Buyer can find other source