49.405
Completion by another contractor
If a surety fails to complete a defaulted contract, the contracting officer must arrange completion—using the same specifications and ensuring the lowest price—by awarding a new contract through an appropriate method.
Overview
FAR 49.405 addresses the procedures for completing a government contract when the original contractor defaults and the surety fails to arrange for completion. In such cases, the contracting officer is responsible for ensuring the work is finished, typically by awarding a new contract using the same plans and specifications. The regulation allows for flexibility in the contracting method, permitting either sealed bidding or other appropriate procedures. The contracting officer must also act with reasonable diligence to secure the lowest possible price for the completion of the work, ensuring fiscal responsibility and continuity of government operations.
Key Rules
- Surety Non-Performance
- If the surety does not arrange for contract completion after default, the contracting officer must take action.
- Awarding a New Contract
- The contracting officer should award a new contract based on the original plans and specifications.
- Contracting Methods
- The new contract can be awarded through sealed bidding or any other suitable contracting method.
- Price Diligence
- The contracting officer must exercise reasonable diligence to obtain the lowest available price for completion.
Responsibilities
- Contracting Officers: Must arrange for completion of the work, select an appropriate contracting method, and ensure the lowest price is obtained.
- Contractors: Should be aware that failure to perform may result in the government re-awarding the contract to another party.
- Agencies: Must oversee the process to ensure compliance with procurement regulations and fiscal responsibility.
Practical Implications
- This section ensures government projects are completed even after contractor default.
- It emphasizes cost control and procedural flexibility for contracting officers.
- Common pitfalls include failing to document diligence in price determination or not following proper contracting procedures.