Giving the agency a reason to issue a cure notice can put your company at a great disadvantage because chances are that you are on the path to receiving a termination for default. Responding to the government cure notice should ring the bell of caution for many contractors. This is especially true for high-dollar value projects in construction and other industries.
Failure to submit an adequate response to the government’s cure notice can have fatal results. A common headache and fear of many government contractors is receiving a termination for default. Your cure notice response can save the day if done correctly. Many companies engage without the help of legal counsel but only to find out the approach was argumentative and just pushed the contracting officer to the decision to terminate for default.
Cure notice responses should include:
- Viable legal defenses ( waiting until you file an appeal is too late if not included in the agency response)
- Plan of action of cure the problem with the specific time limits
- Any valid legal excuses of why the contract terms have not been met ( seek help from legal counsel)
Give Adequate Assurances When Responding to Government Cure Notices
In accordance with the contract’s Default Clause, the agency can, and often expects to see, adequate assurances of timely performance when responding to government cure notices. In your cure notice response, you must lay out a viable plan of action of how you will commit to timely performance of the contract. Contracting officers almost always use this reason to proceed to a termination for default.
- General statements and promises will not suffice.
- More detail is better than too little.
A termination for default can be justified if your cure notice response fails to give the government sufficient assurances of your company’s http://theodorewatson.com/termination-for-default/capability of timely performing in a specification-compliant manner. Courts tend to side with the agency if the contracting officer terminates your contract due to insufficient information in your response.
- You want to be very specific when responding to government cure notices.
- Give expected timelines for the completion of the remaining phases of work or delivery.
- You want to make sure that you consider submitting a quality assurance plan that articulates your oversight efforts on critical issues and concerns.
Examples include ordering materials to fulfill the specific terms of the contract; providing schedules and steps that you will use to meet the remaining obligations. It is always important to communicate with the CO and keep documentation on such communication. It can be an essential part of an appeal that you file later.
Tip: Never ask the contracting officer to change the terms of the original contract for the first time in your cure notice response.
Has the Government Rescinded the Notice – Then Subsequently Issued a Termination for Default
When you are not performing under the terms of the contract, the government is entitled to exercise its rights under the contract. Under these circumstances, it can issue you a cure notice.
However, if the Agency rescinds the cure notice, it should not move to terminate the contract for default. Instead, it should restart the cure process. By not issuing a new notice, the government arguably is not abiding by the terms of the contract and legal impacts your notice of right to cure.
How to Avoid Costly Mistakes With Your Government Cure Notice Response
The key to avoiding a termination for default is to focus on responding to government cure notices in a way that gives assurances. Although you may be angry or disagree with the government, your cure notice response must focus on providing a plan of action, articulating legal excuses for noncompliance, and describing why a termination for default will not be in the government’s interest.
A costly mistake can arise when your cure notice of default response is filled with only reasons why the government is incorrect, assigning blame to the government, and simply demanding payment for an alleged scope change. If you have a disagreement with the issuance of cure notices, you may want to consider full compliance and then later submitting a claim.
- Filing an immediate claim and then demanding a change or amendment to the contract is a serious mistake.
- The government may prevail on appeal simply because you chose not to comply with the cure notice.
- Always respond as stated above and protect your notice of right to cure
For additional help with responding to government cure notices, contact a government contracts attorney at 1-866-601-5518. FREE INITIAL CONSULTATION.