Delinquency notices
FAR 49.607 mandates specific procedures and formats for delinquency notices to ensure contractors are properly notified and given a fair opportunity to respond before termination for default.
Overview
FAR 49.607 provides guidance and sample formats for issuing delinquency notices—specifically Cure Notices and Show Cause Notices—when a contractor is at risk of default. These notices are essential steps in the contract termination process for default and are designed to ensure due process and clear communication between the government and contractors. The section outlines when each notice should be used, the required content, and procedural requirements such as proof of delivery.
Key Rules
- Cure Notice
- Must be issued if termination for default is considered before the contract delivery date and there is sufficient time (at least 10 days) for the contractor to remedy the failure.
- Show Cause Notice
- Used when there is not enough time left in the delivery schedule for a cure period; issued immediately after the delivery period expires.
- Proof of Delivery
- All delinquency notices must be sent with proof of delivery requested to ensure receipt and documentation.
Responsibilities
- Contracting Officers: Must determine which notice is appropriate, ensure proper timing, use the prescribed formats, and send notices with proof of delivery.
- Contractors: Must respond to notices within specified timeframes (typically 10 days), providing explanations or corrective actions as required.
- Agencies: Must maintain documentation of notices and responses for potential termination actions and legal compliance.
Practical Implications
This section ensures contractors are given fair warning and an opportunity to cure or explain performance failures before termination for default. Proper use of these notices protects both the government’s interests and contractor rights, and failure to follow these procedures can jeopardize termination actions or lead to disputes. Common pitfalls include issuing a Cure Notice when insufficient time remains or failing to document delivery and responses.