Government’s Cure Notice Often Leads to Termination of Contract for Default

Avoid Costly Legal Mistakes When Responding to the Agency’s Cure Notice.

Issuing a cure notice can be viewed as the government’s decision that will ultimately lead to a default termination notice under the FAR. The first and best defense of a Cure Notice is not to receive one.  When you receive a cure notice letter, the contracting officer sometimes will give the contractor the benefit of the doubt. However, when you do not adequately respond, you can almost guaranty that the cure notice will ultimately lead to a termination for cause.

To minimize the chances of getting terminated for default, you must address each issue mentioned in the cure notice. You must also tell the contracting officer how you would accomplish each of the unfinished tasks alleged in the cure notice. 

• Give estimated completion dates and times for each task
• Give a breakdown of the methods of completion for each task
• Refer to each section of the Statement of Work in the contract
• Ask the contracting officer to contact you for clarifications if necessary.
• Tell the government what measures (QA or otherwise) how you plan on preventing the deficiency from occurring again.
• Get a professional review of your response.

Things you don’t want to do:

To increase your chances of successful performance, refrain from doing the following:

• Do not respond to a cure letter with solely argumentative responses (you can politely discuss any misunderstandings or other reasons why the deficiency may have occurred).
• Do not generalize your responses.
• Do not offer solutions that change the terms of the contract (schedules, new contractors, etc.)

Tip: If the government’s cure notice is oral it must be later confirmed in writing. Contractors should be extremely careful when responding to the government’s cure notice letter.  For example, your response should in no way change the original terms and conditions of the contract. This will almost always lead to a termination for default.

What is the Cure Period?

Before terminating a contract for default because of your failure to make progress or to perform, the contracting officer will usually give you a written cure notice that allows you, at least, ten days to cure any defects.  Unless the failure to perform is cured within the ten days, the contracting officer may issue a notice of termination of contract for default.

The 10-day cure notice requirement may be extended if the contracting officer considers it reasonably necessary.  The contractor can use the failure to provide the cure notice under the FAR can be an absolute defense in its termination for default appeal.  

• Failure to provide the required cure notice is fatal.
• It failure will lead to a default that will be difficult to reverse on appeal.

In preparing the response, the contracting agency should articulate the failures and suggest the remedies. However, many government cure letters can be vague. You should immediately engage in meaningful conversation with the contracting officer- preferably in writing. 

Effectively Responding to the Government’s Cure Notice

Failure to Adequately Respond to Government’s Cure Notice Leads to Termination for Cause or Default Under FAR. When responding the government’s cure letter, you must tell the Contracting Officer what actions you plan to take to remedy your performance deficiencies.   This would include:

• How you will fully implement your Quality Control Plan
• When you plan on correcting the notice’s deficiencies
• How you plan to bring into conformance any current work orders not meeting contract performance standards
• What measures you will use to prevent the issues from happening again

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Follow up to Your Response is Critical

All of the above actions or other actions taken must be accomplished within the cure period given by the contracting officer. When responding to the government’s cure letter, a good practice should be always to follow up with the agency in writing to see whether your proposed solutions to the notice is acceptable to the government. Some agencies may not respond. Be mindful that failure to correct performance under the cure notice may lead to termination for default.

Read information about termination for default for failure to make progress.

See also Grounds Supporting Termination for Default Letter of Government Contracts.

For help with responding to the government’s cure notice or help to appeal a termination for default under FAR, call our government contract law lawyers at 1-866-601-5518. FREE INITIAL CONSULTATION.