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Termination for Default


longhornjoe

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Can anyone explain why a contracting officer would issue a bilateral modification to the contract using a form SF30 to implement a T4D? The CO checked box 13.E requiring the contractor to return a signed copy. The mod includes all the required information from 49.402-3(g).

I don't understand why a CO would issue what appears to be a bilateral mod, rather than send a basic notice to the contractor.

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Perhaps the Contracting Officer would want confirmation that the contractor had received the document and understood the changes contained in that modification. A copy of of the modification with the contractor's signature would be a record in the contract file that the contractor had received and ackowledged the mod.

If the contractor is disputing the T4D, then they might not want to sign the SF-30, but that is between the contractor, their attorneys and the Government. I would not presume to nor am I quailfied, to advise the contractor to any action in this circumstance.

Personally, I would not use the SF-30 signature block for that purpose, I would issue the T4D as a unilateral modification, with a certified letter, receipt requested method of delivery. Fortunately I have not had to do that so far in my career, I have always managed to negotiate a way out for both the Government and the contractor.

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Geez. So does that mean the contract isn't terminated until the contractor signs and returns the mod? ???

Was there a notice of termination and what is the effective date on the SF30?

I might add that it is sometimes difficult to find the contractor if they abandon the contract ("walk away from it"). I personally know of at least two interesting situations. One, where a government employee had to stake out a small contractor's home and serve him the termination, because he refused to pick up the certified mail.

Another time, the KO actually served the contractor the termination through the open window of the contractor's pickup truck as he tried to run over the KO! Again, he wouldnt or couldn't receive the certified mailed TFD.

Don't screw around with Terminations. Make it a unilateral instrument and make sure that the contractor actually receives it.

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Guest Vern Edwards

It is impossible to answer the question or criticize the CO's action without seeing the content of the mod. There may more in it than a mere notice of termination--something to which the parties have agreed that requires mutual assent. The CO's action may be unorthodox, but it is not necessarily wrong.

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I agree with Vern as most termination situations are more complicated than a simple "you're done here" in my experience. In all of the situations I worked, most of them inherited, I was able to work them out without a T4D by descoping, compensation from the contractor in the form of extra work along with additional time to complete the work, or allowing subs to take over more responsibility. Those were all construction contracts, I have not had any termination scenarios other than failure to deliver scenarios otherwise, and those are relatively simple.

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Deleted. Wasn't done typing. "Me no know. Me no tell. Me push button and it go like hell!"

See my next post...

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I don't necessarily disagree with Vern or dwgerald. This is a supposedly a termination for default, so the alternatives that dw discusses aren't relevant to this scenario. I asked three questions about the mod in order to gain more understanding of the details of the termination. If notice of termination has already been given, the mod should cite the effective date of the action as the date of the actual notice. Once the decision to terminate for fault has been made after careful consideration, the government should take decisive action to issue the N.O.T. and get the re-procurement process moving, in order to minimize the time and other cost impacts of getting the contract completed. The longer the government takes to finalize the action, the more delays and time associated costs.

For construction contracts, there often will be supplies, materials and possibly equipment involved that require protection from weather and theft. There may be construction in progress that needs to be protected from the weather. The Bonding company will be reluctant to pay for liquidated damages during the time that the government takes to finalize the termination. So, time is of the essence and it is in all parties' interests to move swiftly.

In this scenario, the government may have already issued a termination notice by other means and might have achieved mutual agreement on something contained in the mode. We don't know. However, I still believe that it is not wise to delay issuing the Termination notification using a bilateral vehicle. A TFD is not dependent upon mutual agreement, plus the KO must then rely upon the other party to sign the mod. It's difficult enough to get many contractors to sign and then return routine mods, even after agreement on the details. If I was the contractor, I'd most likely send the Termination mod to my lawyer and some might try to forestall the default.

Maybe the KO only wants the contractor to acknowledge receipt of the mod - which it might or might not do. Longhornjoe didnt mention whether the Block 13 C. (supplemental agreement) was checked. If it wasn't, then it isn't necessarily a bilateral mod.

Was 13 C. or another block checked, besides 13 E., Joe?

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Thanks for the discussion so far. The only other check in section 13 is under 13.A with a reference to 52.249-10. Block 13.C was not checked. No other termination notice has been delivered. The effective date of the mod is the date the CO signed the SF30. The SF30 continuation page purports to be a termination notice and does not address any settlement or agreement terms.

I'm not necessarily challenging the CO's action, only trying to understand it and really appreciate everyones' comments.

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Guest Vern Edwards
Thanks for the discussion so far. The only other check in section 13 is under 13.A with a reference to 52.249-10. Block 13.C was not checked. No other termination notice has been delivered. The effective date of the mod is the date the CO signed the SF30. The SF30 continuation page purports to be a termination notice and does not address any settlement or agreement terms.

I'm not necessarily challenging the CO's action, only trying to understand it and really appreciate everyones' comments.

If the modification contains nothing more than a notice of termination, then I cannot think why it should be bilateral. A CO does not require the contractor's consent to terminate the contract. It would be inappropriate to require the contractor's signature on the SF 30 as proof of delivery. Proof of delivery should be provided by the USPS or commercial courier. In short, while there might be legitimate reasons for a bilateral mod terminating the contract--e.g., if the mod includes an agreement about damages--I cannot think of any reason why a mere notice of termination should be bilateral.

Did you ask the CO?

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Thanks for the discussion so far. The only other check in section 13 is under 13.A with a reference to 52.249-10. Block 13.C was not checked. No other termination notice has been delivered. The effective date of the mod is the date the CO signed the SF30. The SF30 continuation page purports to be a termination notice and does not address any settlement or agreement terms.

I'm not necessarily challenging the CO's action, only trying to understand it and really appreciate everyones' comments.

Longhornjoe, this wasn't a "bilateral mod". It is a unilateral action with the date of the KO's signature identified as the effective date.

The KO is requiring the Contractor to acknowledge receipt but that doesn't affect the termination. I agree with Vern that proof of delivery by other means is the proper or best way to go...

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