49.504 Termination of fixed-price contracts for default
Source: FAR 49.504 on acquisition.gov
Contracting officers must include the appropriate default termination clauses in fixed-price contracts based on contract type, value, and specific circumstances to ensure proper remedies in case of contractor default.
Overview
FAR 49.504 prescribes the required contract clauses for termination of fixed-price contracts for default. It directs contracting officers to include specific default clauses in solicitations and contracts for supplies, services, research and development, construction, and dismantling/demolition, depending on the contract type and value. The section also provides guidance on when to use alternate versions of these clauses, such as for transportation contracts or contracts awarded during national emergencies. The use of these clauses is generally mandatory for contracts exceeding the simplified acquisition threshold, but may also be used for lower-value contracts if circumstances warrant (e.g., history of poor performance, essential completion dates, or key personnel concerns).
(a)
(1) Supplies and services. The contracting officer shall insert the clause at 52.249-8, Default (Fixed-Price Supply and Service), in solicitations and contracts when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold. The contracting officer may use the clause when the contract amount is at or below the simplified acquisition threshold, if appropriate (e.g., if the acquisition involves items with a history of unsatisfactory quality).
(2) Transportation. If the contract is for transportation or transportation-related services, the contracting officer shall use the clause with its AlternateI.
(b) Research and development. The contracting officer shall insert the clause at 52.249-9, Default (Fixed-Price Research and Development), in solicitations and contracts for research and development when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold, except those with educational or nonprofit institutions on a no-profit basis. The contracting officer may use the clause when the contract amount is at or below the simplified acquisition threshold;, if appropriate (e.g., if the contracting officer believes that key personnel essential to the work may be devoted to other programs).
(c)
(1) Construction. The contracting officer shall insert the clause at 52.249-10, Default (Fixed-Price Construction), in solicitations and contracts for construction, when a fixed-price contract is contemplated and the contract amount is expected to exceed the simplified acquisition threshold. The contracting officer may use the clause when the contract amount is at or below the simplified acquisition threshold, if appropriate (e.g., if completion dates are essential).
(2) Dismantling and demolition. If the contract is for dismantling, demolition, or removal of improvements, the contracting officer shall use the clause with its AlternateI.
(3) National emergencies. If the contract is to be awarded during a period of national emergency, the contracting officer may use the clause-
(i) With its AlternateII when a fixed-price contract for construction is contemplated, or
(ii) With its AlternateIII when a contract for dismantling, demolition, or removal of improvements is contemplated.