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What kind of analysis or recommendations should the COR provide to the CO?

In addition to providing the CO with notification of possible termination, the COR should suggest available alternatives to terminating a contract, indicating the advantages and disadvantages of each alternative. The suggested alternatives should have the least possible impact on the government's requirements (per the instant contract and future contracts), delivery schedule, and overall cost.

What are some available alternatives to termination the CO and COR may consider?

The CO is not compelled to terminate a contract simply because he or she was asked to do so by the program or project office. Alternatives to termination may include:

Continuing the present contract through such means as:

- Permitting performance by the contractor, a surety ("one who undertakes to perform other acts in the event that his or her principal fails therein"), or a guarantor ("one who makes a guaranty, i.e., a promise to be responsible for the default of another") under a revised delivery schedule

- Allowing the contractor to continue with consideration (i.e., something of value given to the government by the contractor in return for the government not exercising its right to terminate the contract)

- Forbearing or postponing termination action

- Permitting the contractor to subcontract with an acceptable third party.

A no-cost cancellation when:

- The government can obtain the supply or service elsewhere

- A no-cost settlement is acceptable to the contractor

- Government property had not been furnished to the contractor

- There are no outstanding payments, debts due the government, or other contractor obligations.

Termination for convenience if:

- The requirement is no longer necessary

- The requirement could be more cost-effectively met by reproducing it from another source

- There is no sustainable case for default.

Termination Proceedings

What is the COR's role in assisting the CO with termination proceedings?

Termination proceedings may involve meetings, discussions, and conference calls between the contractor and the government. The COR may be asked to assist the CO in preparing for these proceedings by providing documentation supporting the termination decision and by coordinating information related to the termination.

What information might be included with the termination decision?

Termination documentation may include the following information:

The reasons for terminating the contract

General principles related to the conclusions and agreements reached on any aspects of the settlement proposal submitted by the contractor (i.e., the CO's judgments or discretionary decisions during negotiation of the settlement), including the contractor's obligations under the termination settlement

The extent of the termination, the point at which work will be stopped, and the status of any plans, drawings, and data that would have been delivered had the contract been completed

The status of any continuing work

The obligation of the contractor to terminate subcontracts and general principles to be followed in settling subcontractor settlement proposals

The names of subcontractors involved and dates that the termination notices were issued to them

The names of contractor personnel handling the review and settlement of subcontractor settlement proposals and the methods being used to do so

Arrangements for the transfer of title and delivery to the government of any material required by the government.

 
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