Contract Termination Matters and Associated Notices
- FAR Part 49 Termination of Contracts.
Scope of Part.
This part establishes policies and procedures relating to the complete or partial termination of contracts for the convenience of the Government or for default. It prescribes contract clauses relating to termination and excusable delay and includes instructions for using termination and settlement forms.
- AIR-2.0 Policy And Procedures Memorandum (PPM) #164A
Notification Process For Significant Contract Terminations
1. Background. Matters of contract termination are addressed within Part 49 of the FAR. Specifically, within the procedures for default is the probable use of two delinquency notices known as a cure notice and a show cause notice. In FAR Part 49, reference is also made to FAR Subpart 42.13 for stop-work orders. All of these have specific purposes, under specific circumstances, and are to be used only after complete IPT coordination and review by counsel and the contracting officer. In addition to the internal operating procedures of the Contracts Competency which require Division Level review of cure notices, show cause letters, and stop-work orders, such notices should be brought to the attention of the Director, Contracts Competency. The Contracts Competency Director shall use his discretion in determining whether or not the respective Commanding Officers or their Deputies should be briefed on the use of a cure notice, show cause notice, or stop-work order prior to its release by the contracting officer.
- Prior to issuance of a cure or show cause notice or stop-work order, the Contracts Division Head should review the coordinated action and advise the Contracts Competency Director. The Director, Contracts Competency shall use his discretion in determining whether or not the respective Commanding Officers or their Deputies should be briefed prior to its release by the contracting officer. Should a briefing be desired, it should be scheduled and given by the leader of the IPT, with attendance by counsel, the requiring competency head, the contracting officer, and the Director, Contracts Competency.
- As appropriate, the contracting officer should follow the amplification information found in NAVAIR ONE DOC Part 49 and NAVAIR Policy and Procedures Memorandum 164A regarding AIR-2.0 responsibilities for the Congressional notification required for contract terminations involving a reduction of employment of 100 or more contractor employees, as set forth in DFARS Subpart 249.7001.