Default (Fixed-Price Construction)
FAR 52.249-10 empowers the Government to terminate fixed-price construction contracts for default and hold contractors liable for damages unless delays are excusable and properly reported.
Overview
FAR 52.249-10, Default (Fixed-Price Construction), establishes the Government’s rights and procedures when a contractor fails to diligently prosecute or complete construction work within the contractually specified time. The clause allows the Government to terminate the contractor’s right to proceed, take over the work, and hold the contractor and its sureties liable for damages and increased completion costs. It also outlines excusable delays, such as acts of God, government actions, and other unforeseeable events, provided the contractor notifies the Contracting Officer in writing within 10 days of the delay’s onset. Alternate versions of the clause address contracts for demolition/removal and contracts awarded during national emergencies, modifying the default and excusable delay provisions accordingly.
Key Rules
- Termination for Default
- The Government may terminate the contractor’s right to proceed if work is not prosecuted with required diligence or completed on time.
- Government Remedies
- Upon termination, the Government may complete the work by other means and use materials on site; the contractor and sureties are liable for damages and extra costs.
- Excusable Delays
- Delays beyond the contractor’s control (e.g., acts of God, severe weather, strikes) are excusable if promptly reported in writing.
- Notification Requirement
- Contractors must notify the Contracting Officer in writing within 10 days of the start of any excusable delay.
- Alternate Clauses
- Special provisions apply for demolition/removal contracts and contracts awarded during national emergencies.
Responsibilities
- Contracting Officers: Issue written notice of termination, determine excusable delays, and decide on time extensions.
- Contractors: Diligently prosecute and complete work, promptly notify of excusable delays, and accept liability for unexcused delays.
- Agencies: Oversee contract performance, enforce remedies, and document findings and decisions.
Practical Implications
This clause ensures timely completion of construction contracts and protects the Government from losses due to contractor default. Contractors must maintain diligent progress, document and communicate delays, and understand their liability for damages. Failure to comply can result in termination, financial liability, and reputational harm. Common pitfalls include late notification of delays and inadequate documentation of excusable causes.