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FAR 12.403:  Termination

Comptroller General - Key Excerpts

The present solicitation was issued to Maher on August 7, and Maher was awarded the production contract on September 5. An award synopsis was posted on FedBizOpps the same day and Essan filed this protest on September 17. Essan asserts that it was improperly excluded from the competition for the reprocurement, that the reprocurement was for a different item than the terminated contract, and that Maher’s proposed price in the reprocurement was unreasonable. Generally, the statutes and regulations governing federal procurements are not strictly applicable to reprocurements of defaulted requirements. Bluff Springs Paper Co., Ltd./R.D. Thompson Paper Prod. Co., Joint Venture, B-286797.3, Aug. 13, 2001, 2001 CPD para. 160 at 2. Under the standard provisions applicable to fixed-price contracts, FAR sections 49.402-6(b) and 52.249-8, an agency may use any terms and acquisition method deemed appropriate for repurchase of not more than the undelivered quantity for which the contract was terminated, but must obtain competition to the maximum extent practicable. In this case, because the terminated contract was for the acquisition of commercial items, FAR sect. 49.402-6 is only applicable as guidance, and only to the extent that it does not conflict with the specific procedures applicable to commercial item acquisitions. FAR sect. 12.403(a). As applicable here, for commercial item acquisitions, FAR sect. 12.403(c)(2) provides that the government’s rights after a termination for default include all the remedies available to any buyer in the marketplace, and that the government’s preferred remedy will be to acquire similar items from another contractor and to charge the defaulted contractor with any excess reprocurement costs. These FAR provisions allow the agency to purchase the needed supplies as expeditiously as possible while preserving the government’s right to seek excess reprocurement costs from the defaulted contractor. (Essan Metallix Corporation, B-310357, December 7, 2007) (pdf)

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For the Government For the Protester
Essan Metallix Corporation, B-310357, December 7, 2007 (pdf)  
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