49.402-5
Memorandum by the contracting officer
Contracting officers must document the reasons for terminating a contract for default or using an alternative procedure in a memorandum for the contract file.
Overview
FAR 49.402-5 requires that when a contract is terminated for default, or when an alternative procedure under FAR 49.402-4 is used, the contracting officer must document the reasons for the action in a memorandum for the contract file. This memorandum serves as an official record explaining the rationale behind the termination or the chosen procedure, ensuring transparency and accountability in the contract administration process.
Key Rules
- Memorandum Requirement
- The contracting officer must prepare a memorandum for the contract file whenever a contract is terminated for default or an authorized alternative procedure is used.
- Explanation of Reasons
- The memorandum must clearly explain the reasons for the termination or the specific action taken under FAR 49.402-4.
Responsibilities
- Contracting Officers: Must document and justify the decision to terminate for default or use an alternative procedure by preparing a memorandum for the contract file.
- Contractors: No direct compliance requirement, but should be aware that the rationale for termination will be formally documented.
- Agencies: Ensure oversight by maintaining proper documentation for audit and review purposes.
Practical Implications
- This requirement ensures that all terminations for default or alternative procedures are properly justified and recorded, supporting transparency and defensibility of the contracting officer's actions. Failure to document can lead to challenges in audits, disputes, or legal proceedings. Contracting professionals should treat this as a critical step in the termination process to protect the agency and ensure regulatory compliance.