Let’s say a contractor sends off a First Article Test (FAT) for testing, it gets approved (but the contractor is not yet notified) but contemporaneously a recommendation is made to cancel the contract because the material is no longer needed. Prior to receipt of the FAT approval letter, the contractor tenders the production lot for inspection by DCMA. Should the contractor be on the hook for costs incurred for finalizing the production lot prior to receipt of the FAT approval?

Did the contractor receive a termination or cancellation notice?

On 6/29/2023 at 10:27 PM, annieK said:

Should the contractor be on the hook for costs incurred for finalizing the production lot prior to receipt of the FAT approval?

More info is needed.  Was there a timeframe within which the results of the FAT test were to be communicated to the contractor?  If so, was this done?  Was there sufficient time for the contractor to wait for the results of the FAT before the production lot was due?  Was the production lot delivered early?  If the answer to Don's question is "yes" was the notice delivered prior to delivery of the production lot?

On 6/29/2023 at 7:27 PM, annieK said:

Let’s say a contractor sends off a First Article Test (FAT) for testing, it gets approved (but the contractor is not yet notified) but contemporaneously a recommendation is made to cancel the contract because the material is no longer needed. Prior to receipt of the FAT approval letter, the contractor tenders the production lot for inspection by DCMA. Should the contractor be on the hook for costs incurred for finalizing the production lot prior to receipt of the FAT approval?

The terms and conditions of the contract between the parties needs to be read. Contract requirements need to be identified that support whether contractor failed to perform or failed to refrain from performing in accordance with such terms and conditions.