Termination for Cause

According to the termination for cause terms in FAR 52.212-4 (Deviation) and FAR 52.212-4 (Alternate I) (Deviation), the ordering activity reserves the right to terminate the order, or any part thereof, for cause:

• In the event of any default by the contractor
• If the contractor fails to comply with any contract term or condition
• If the contractor fails to provide the government (upon request) with adequate assurances of future performance

Schedule orders cannot be terminated for cause if it is determined that a Schedule contractor has a valid excusable failure.

Government/Contractor Liabilities

The ordering agency is not liable for any services or supplies not accepted.

The contractor is liable for all rights and remedies provided by law. The government’s preferred remedy is to acquire similar items from another contractor and to charge the defaulted contractor with any excess repurchase costs and any incidental or consequential damages incurred due to the termination.

If the termination remedy is repurchase, and the terminated contractor is charged any excess costs, the ordering activity must repurchase at the lowest price possible, considering the quality required by the government, delivery requirements, and administrative expenses.

When excess costs are anticipated, the ordering activity may withhold funds due to the contractor as offset security. Ordering activities must minimize excess costs to be charged against the contractor and collect or set-off any excess costs owed.

If an ordering activity is unable to collect excess repurchase costs, it must notify the Schedule contracting office after final order payment to the contractor.