Terminations of Government Contracts

Overview

Two days of intense instruction in the rules, the ramifications and the remedies involved in termination of contracts for default and for the Government’s convenience.

A course specially designed for both Government and contractor representatives in which you will learn:

• Grounds for default termination

• Valid excuses for default

• Damages which may result from termination

• The structured procedure which may be followed

“Terminations need not necessarily be the end”

An unpleasant feeling. That (and we may be understating it) is what Government contractors customarily get when you raise the subject of contract terminations. And it is probably the reason for the absence of programs devoted exclusively to what is one of the “trauma-topics” in Government procurement. We suspect, in other words, a reaction by some that teaching terminations is like teaching trouble...and nobody wants to learn about trouble.

But we offer a different view. We believe that if you learn about trouble, you can learn to avoid it. Trouble for contractors-who may suffer from having their contracts terminated for default or for the Government’s convenience. Trouble for the Government-which, if it improperly initiates or pursues termination actions, can end up paying more (and getting less) than if it let things stand or resorted to other alternatives.

Knowing the rules of terminations, (a) contractors may (in given circumstances) be able to convince Government representatives that contemplated default terminations are inappropriate, or may be able to lessen the impact of a termination and (b) the Government will be better able to determine whether (and, if so, how) termination actions should be pressed. Similarly, both parties will be armed with the knowledge necessary to correctly proceed with, and realize maximum reasonable returns from terminations for the Government’s convenience. All this will be provided to you in two concentrated days of lectures-supplemented by a special Course Manual that is yours for future reference.

The time you spend with us will be a trying one-but trying only in terms of the sincerity of purpose necessary to profit from the intense pace of instruction. Keep in mind that (to put it rather whimsically) it is not the intent of this course to instruct you in how to behave at your own funeral. Rather, we seek to guide you in how to prevent such an unhappy consequence or-should it occur-in how to salvage some measure of benefit.

Dates/Locations

No upcoming dates/locations at this time

Agenda

9:00 AM - 4:00 PM

Terminations of Government Contracts Course Curriculum

INTRODUCTION

Types of Terminations
1. Default By Contractor
2. Convenience of The Govt
3. No-Cost
Govt vs. Commercial Contracts
1. Distinctions in the Settings
2. Comparison of Rights
3. Comparison of Remedies
4. Ethics Issues

DEFAULT TERMINATION

Standard Contract Clauses
1. What They Say-A Briefing
2. Similarities & Differences
Default vs. Contract Breach
1. Substantive & Procedural Comparisons
2. Contractor & Govt Pros-&-Cons
Govt Right To Terminate
1. Can It Terminate
2. Should It Terminate-The Factors
3. Alternatives To Default Termination
4. Govt Internal Procedures
Grounds for Default
1. Failure To Deliver On Time
  1. Time deemed of the “essence”
  2. Determining the delivery date-first articles, prepods and end items
  3. Partial deliveries
2. Failure To Meet Specifications
  1. “Strict Compliance” doctrine
  2. Contract interpretation factors
  3. Non-conforming work
  4. Govt waiver of specifications
  5. Preproduction models
  6. “Substantial performance” doctrine
3. Failure To Make Progress
  1. Types of progress failures
  2. Govt “cure notice” requirements
  3. Adequacy of contractor’s cure
4. Anticipatory Breach of Contract
  1. Inability to perform
  2. Repudiation & abandonment
  3. Govt demand for assurances
  4. Contractor’s insolvency
5. Failure To Perform Other Provisions
  1. Material contract provisions
  2. Non-material contract provisions
6. Incorrect Grounds for Default
  1. Wrong reason
  2. Existence of other proper reasons
  3. Consequences
Default Excuses
1. General Concepts
  1. Causes “beyond the control & without fault of negligence” of contractor
  2. forseeability of causes
  3. Effect of excusable delay
2. Changes in the Work
3. Defective Specifications
4. Impossibility of Performance
  1. Subjective vs. objective
  2. Actual
  3. Practical or commercial
  4. Contractor assumption of risk
5. Delays
  1. Govt granting of approvals
  2. Govt inspection
  3. Payments by Govt
  4. Labor shortages
  5. Contractor lack of capability
  6. Contractor lack of financing
  7. Inadequate contractor staff & equipment
6. Govt Interference With Performance
7. Govt Failure To Disclose Information
8. Govt-Furnished Property
9. Work Suspensions & Stoppages
10. Differing Site Conditions
11. Govt Sovereign Acts
12. Subcontractor Delays
  1. Lower tier subcontractors
  2. Designated subcontractors
  3. Sole source subcontractor
13. Acceleration of Performance
14. Other Default Excuses
  1. Acts of God or public enemy
  2. Strikes
  3. Unusually severe weather
  4. Unanticipated economic conditions
  5. Embargoes
Proving Excusable Delay
1. Extent of Delay
2. Notice Requirements
3. Concurrent Delay
4. Mitigation of Delay
Govt Waiver of Delivery Date
1. Waiver vs. forbearance
  1. Waiver-elements & consequences
  2. Forbearance-elements & consequences
  3. Govt waiver actions
  4. Contractor reliance
  5. Forbearance becoming waiver
2. Termination After Waiver
  1. Setting a new delivery schedule
  2. Contractor inability to perform
  3. Govt right to terminate
Excess Reprocurement Costs
1. Contractor’s General Liability
2. Measurement of Costs
3. Timeliness of Govt Reprocurement
4. Govt Methods of Reprocurement
5. Similarity of Reprocured Work
6. Govt Completion of Work
Recovery of Progress Payments
1. Govt Right To Recover
2. Value of Govt-Accepted Inventory
3. Cost Reimbursement Contract Situations
4. Deferred Payment Agreements
Liquidated Damages
1. Definition
2. Validity of Damages Amount
3. Substitute for Actual Damages
4. Negotiation of Limitations
5. Apportionment of Concurrent Delay
6. Assessment & Collection
7. Contractor Relief From Liability
Cost-Type Contract Damages
1. The Contract Provisions
2. Measurement of Damagess
Other Damages
1. Govt Administrative Costs
2. Incidental Damages
3. Consequential Damages
Contesting The Default
1. Challenging Validity of Termination
2. Challenging Reprocurement Cost Assessment
3. Methods & Techniques of Proof
4. Contracting officers, Appeal Boards & Courts
5. Reinstatement of Contract

CONVENIENCE TERMINATION

General Considerations
1. Nature of Convenience Termination
2. The Standard Clauses-A Briefing
3. Total vs. Partial Terminations
4. How Convenience Terminations Occur
  1. Contracting officer’s written notice
  2. Erroneous default termination
  3. Erroneous contract cancellation
  4. Constructive terminations
5. Limitations On Govt Right To Terminate
6. Reinstatement of Terminated Contract
Termination Procedures
1. Notice of Termination
2. Work Stoppage
3. Notice To Subcontractors
4. Conferences
5. Disposition of Inventory
6. Settlement of Subcontractors’ Claims
  1. Prime’s negotiations with subs
  2. Settlement authority
  3. Govt approval & Assistance
Contractor’s Dollar Recovery
1. General Rights To Costs & Profit
2. Applicable Cost Principles
  1. Federal Acquisition Regulation
  2. Agency Implementation
  3. Equitable considerations
  4. Reallocation of costs
3. Performance Costs
  1. Pre-contract costs
  2. Initial & preparatory costs
  3. Complete work
  4. Incomplete work
  5. Materials
  6. Non-specification work
4. Post-Termination Costs
  1. Continuing costs
  2. Unabsorbed overhead
  3. Idle facilities
  4. Loss of useful value
  5. Unexpired leases
  6. Disruption & inefficiency
5. Profit
  1. Factors in determining amount
  2. Profit on subcontracted work
  3. Anticipated profit
6. Loss Contracts
  1. “Adjustment for loss” formula
  2. Avoiding the loss formula
7. Contractor's Settlement Expenses
  1. Types of recoverable costs
  2. Documentation required
Partial Terminations
1. Partial Termination vs. Deductive Change
2. Cost of Performing Terminated Work
3. Price Adjustment for Remaining Work
  1. Purpose
  2. Loss of “learning curve” benefits
  3. Reduced material quantities
  4. Other recoverable costs
4. Special Procedures
The Settlement Proposal
1. Purpose
2. Inventory Basis vs. Total Cost Basis
3. No-Cost Settlements
4. Submitting The Settlement Proposal
5. Review Procedures
6. Settlement Negotiations
  1. Negotiation standards
  2. Partial settlement
  3. Settlement Review Board
  4. Contracting officer’s negotiation memorandum
  5. Payment
  6. Retention of records
7. The Results
Disputes
1. Contract Disputes Act of 1978
2. Appeals To Boards & Courts
3. Methods of Presentation & Proof
4. Subcontracting Litigation

Experts

Greg Bingham

Partner, HKA

Greg is a forensic accounting and quantum expert with over 33 years of experience in the field of business consulting, primarily for Government and Construction Contractors.

Clients have included corporations, partnerships, and individuals; in-house and outside counsel. Greg has consulted w...

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Accreditation

See Individual Courses For Available Credits

Certificates of Completion are provided to all seminar participants who attend Federal Publications Seminars courses following the event, upon request.

CPE: Continuing Professional Education

Field of Study: Specialized Knowledge

Delivery Method: Group-Live Classroom

Federal Publications Seminars is affiliated with West Professional Development and is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.

For more information regarding administrative policies such as refunds, cancellations and complaints, please contact Federal Publications Seminars at 888.494.3696.

CPE Hours

This program is eligible for: 13.0 (CPE) hours of credit

Program Level: Basic

Program Prerequisite: None

Advance Preparation: None

Method: Group-Live

CLP: Continuous Learning Points

Approved for CLP by Defense Acquisition University

Defense Acquisition Workforce members must acquire 80 Continuous Learning Points (CLP) every two years from the date of entry into the acquisition workforce for as long as the member remains in an acquisition position per DoD Instruction 5000.66. We will provide you with documentation of points awarded for completing the event.

CLP Hours

This program is eligible for: 11.0 (CLP) hours of credit

CLE: Continuing Legal Education

States have widely varying regulations regarding MCLE credit. LegalEdcenter is an approved provider in AL, AK, AR, CA, GA, IL, ME, MO, MS, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, PA, RI, SC, TN, TX, UT, VA, VI, VT, WA, WI, and WV. Credit may be applied for in other jurisdictions on request and in accordance with state MCLE rules.

Please note that because some states are changing their policy on CLE reporting, you will need to fill out the request for credit from Federal Publications Seminars within 10 business days, or we may not be able to issue credits for the program.

CLE Hours

This program is eligible for: 11.0 (60 minutes), 13.0 (50 minutes)

Travel

No travel information is available at this time

Level

100

Basic or fundamental subject matter is covered. Courses are geared to general knowledge or can be taken as a refresher.
200

Specific topics or issues within a topic area are covered. Students should be familiar with terms of art and general concepts concerning the course topic.
300

Workshops and class discussions cover specific subject matter in-depth, and participation is strongly encouraged. Attendees should have at least 2-3 years' experience in the area of study.
400

Courses build upon students' knowledge and experience, and cover complex issues within the subject matter. Should have 4-5 years' mastery of subject for in-depth analysis.
500

Masters-level programs designed for professionals with 5+ years' experience. Courses cover in-depth and technical analysis on specific subjects and updates on current issues.