Contract Default & Government Termination Letter

When your contract is terminated for default, the agency must issue a contract  termination letter. (see FAR 49.601). Responding to the contract termination letter and taking the next steps could be problematic if you do not understand the process and what standard the government must meet.

• By learning the rules, your company can get the second bite at the apple and not allow the agency to win by contract default in court.
• Failure of the government to give written notice or letter regarding breach of contract could create substantive right violations and potentially due process violations.

Termination for Default in government contracting happens when you fail to meet the terms and conditions of the contract. This can either be performance issues or failure to comply with the contract clauses.

Every contractor termination letter for default is not conclusive. If you have received a contract default termination letter from the contracting officer, you should start building your case right away. You never want to wait until a termination of contract for default letter lands on your desk.

Contracting Officer’s Obligations in Termination for Default Cases 

 When a default government contract termination notice is mailed, it shall be sent by certified mail, return receipt requested. When the contracting officer arranges for hand delivery of the notice, a written acknowledgment shall be obtained from the contractor.

Default End of Contract Letter: In the case of termination for default, the termination of contract letter or notice shall advise you that:

•  That the contract is being terminated for the convenience of the Government (or for default) under the contract clause authorizing the termination;
• The effective date of termination;
• The extent of termination;
• Any special instructions; and
• The steps the contractor should take to minimize the impact on personnel if the termination, together with all other outstanding terminations, will result in a significant reduction in the contractor’s workforce of the notice
• If the termination notice is by telegram, include these “steps” in the confirming letter or modification.

Distribution of copies of Default Contract Termination Letter

In addition to providing you with the default contract termination letter, the contracting officer must simultaneously send a copy of the contract termination letter to the contract administration office and to any known assignee, guarantor, or surety of the contractor.  If you receive a letter regarding breach of contract, you should extremely careful how you proceed.

How to Reply to Termination of Contract Default Letter

When the contracting officer issues you a termination or default letter, your response is very critical. Although, the government may be to blame, knowing how to reply to termination of contract letter means balancing your legal defenses and why the contract should not be terminated is more important than just blaming the government.

Avoid Costly Legal Mistakes, Get Your Free Copy the Termination for Default Checklist

For additional concerns or help with the next steps with how to respond to an end of contract default termination letter to the federal government, call our termination for default lawyers at 1-866-601-5518.