Few things are more alarming for a government contractor than receiving a notice of default termination. If you’ve been awarded a federal contract, you’ve likely invested substantial time, personnel, and resources to fulfill your obligations. When an agency suddenly terminates that contract for default, it not only disrupts your business; it threatens your future in the federal contracting arena. Knowing how to respond quickly and strategically is essential.
At Downey & Associates, we help businesses throughout Denver and nationwide defend their rights when they face adverse actions under federal contracts. If you’re dealing with a termination for default (T4D), here’s what you need to know and what you should do immediately.
What Is a Termination for Default?
A termination for default occurs when a federal agency ends a contract because it believes the contractor has failed to meet key obligations. This could include missing deadlines, delivering subpar goods or services, failing to comply with contract terms, or any action the agency views as a material breach.
This is different from a termination for convenience, where the government ends the contract even if the contractor has done nothing wrong. While a termination for convenience allows for partial compensation, a termination for default can result in severe consequences, including financial penalties and negative performance ratings that could impact future awards.
Common Reasons Agencies Issue Default Terminations
Federal agencies are required to follow specific guidelines before terminating a contract for default. Some of the most common reasons they cite include:
Failure to deliver goods or services on time
Consistently substandard performance or deliverables
Noncompliance with technical specifications or terms
Failure to make progress on the project
Violations of federal laws or regulations
Agencies often issue a “cure notice” or “show cause notice” before taking final action. These notices are a warning and an opportunity to explain or fix the issue. How you respond at this stage can determine whether the contract is salvaged or terminated.
Immediate Steps to Take After Receiving a Termination Notice
Once you receive a T4D notice, time is of the essence. Here’s what you should do:
1. Review the Contract and the Termination Notice Carefully
Start by reviewing your contract terms, especially the Federal Acquisition Regulation (FAR) clauses related to default (such as FAR 52.249-8 for fixed-price supply and service contracts). Compare the agency’s claims to the actual contractual requirements. In many cases, agencies incorrectly assert default when the contractor was acting within the contract’s scope or was delayed due to excusable causes.
2. Document Everything
Gather all records related to performance, including emails, delivery logs, progress reports, subcontractor communications, and change orders. This documentation can help prove that you fulfilled your obligations or that delays were caused by factors outside your control, such as government interference or supply chain disruptions.
3. Identify Excusable Delays
FAR allows for “excusable delays” in some situations, including extreme weather, acts of God, labor disputes, or other unforeseen events. If one of these conditions contributed to your inability to perform, it might negate the default. You’ll need strong documentation and timely communication to support this defense.
4. Respond Promptly to Cure or Show Cause Notices
Before finalizing a termination for default, agencies typically issue a cure notice (giving you time to correct deficiencies) or a show cause notice (asking you to explain why the contract should not be terminated). Respond to these notices with detailed explanations, supporting evidence, and a commitment to corrective action when appropriate. Your response should be strategic, factual, and professional; it will become part of the administrative record.
5. Consult a Federal Contracts Attorney
This is not a situation to handle alone. The stakes are high: a default termination can result in claims for excess reprocurement costs, contract debarment, and a black mark on your record with the System for Award Management (SAM). An attorney experienced in federal contract law can help you build a defense, prepare a formal dispute, or negotiate a conversion to a termination for convenience, which is far less damaging to your business.
Can You Appeal a Termination for Default?
Yes. Contractors have the right to challenge a termination for default by filing an appeal. You can appeal to either:
The appropriate Board of Contract Appeals (such as the Civilian Board of Contract Appeals or Armed Services Board of Contract Appeals), or
The U.S. Court of Federal Claims
Appeals must typically be filed within 90 days of the final decision (for Board of Contract Appeals cases) or within 12 months if filing in the Court of Federal Claims. Your appeal must clearly explain why the default was improper and present strong evidence that supports your position.
Why Early Legal Involvement Matters
Too often, contractors wait until the termination is finalized before seeking legal help. By that point, opportunities to correct or mitigate the situation may be lost. Involving a federal contracts attorney early allows you to evaluate your risk, respond appropriately to agency notices, and potentially resolve the issue without the need for formal litigation.
At Downey & Associates, we represent contractors across a wide range of industries who do business with federal agencies. Whether you’re a defense contractor, IT provider, construction firm, or SBA-certified small business, we know how to protect your rights and your reputation when things go wrong.
Call Downey & Associates Today for Legal Support
If you've received a cure notice, show cause letter, or a formal termination for default, we can help you assess the facts, develop a sound response strategy, and take decisive legal action. Our federal government contracts attorneys are here to help you challenge unjust actions and keep your business moving forward.
Don't let a default termination define your company’s future. Contact us today for a confidential consultation and take the first step toward protecting your government contract and your livelihood.
Everyone knows there’s big money in black gold (oil) and companies’ eager to get at this natural resource don’t take too kindly to the roadblocks they hit along the way. In this particular case (State of Wyoming et al v. Jewell et al [No. 16-8068]), a federal judge in Wyoming is getting a little bit of push back from the federal government as well as some legal professors about one of his controversial rulings blocking federal rules surrounding hydraulic fracturing on government ground.
The Bureau of Land Management (BLM) disclosed rules in 2015 that mandated that drilling companies disclose the materials they inject into the ground to free up oil and gas. The rules were put together as a result of public concern that fracking could pollute or contaminate underground water.
Details and Claims Concerning the Wyoming Federal Judge’s Controversial Ruling
The following details and claims were gathered from local news reports:1
U.S. District Judge Scott Skavdahl of Casper made a ruling in June that BLM doesn’t have the authority to regulate fracking.
The BLM claims it was acting in the public’s best interest.
Obama’s administration filed a brief with the 10th U.S. Circuit Court of Appeals in Denver arguing that the BLM has the rightful authority to regulate fracking.
In Judge Skavdahl’s ruling he referenced Florida State University law professor Hannah Wiseman’s article supporting his conclusion that Congress stopped federal regulation fracking in 2005.
Nearly 40 law professors, including Wiseman, say they disagree with Judge Skavdahl’s interpretation of the article.
Petroleum Association of Wyoming Vice President John Tobitaille issued a statement saying the state already regulates the oil and gas producers
What is Next for Wyoming’s Fracking Regulation Ruling?
Many legal pundits thought that since Obama personally filed a brief, along with that of a large number of reputable law professors, that it would have ensured an overturning of the ruling. However, new developments could redirect the ruling, including:2
Several former U.S. Department of the Interior officials -- both Republicans and Democrats -- have told the 10th Circuit that it should decide whether the BLM was within it's jurisdiction to issue a rule imposing restrictions on fracking on tribal and federal lands.
In May, the BLM asked the 10th Circuit Court to hold in abeyance litigation concerning the fracking rule matter, while also defending right to announce its own regulation.
Lastly, if the court holds the matter in abeyance, the BLM plans to rewrite Obama regulations to better adhere to the Trump administration's policies. Some legal experts believe rewriting the regulations will lead to limiting the BLM's authority to regulate oil and gas practices.
Has your corporation or industry been hindered by a wrongful court ruling? If so, contact Denver Business Attorney Thomas E. Downey. Since 1983, Thomas Downey and his legal team at Downey & Associates, PC, have aggressively sought justice for all kinds of business-related matters, including contract negotiations, workplace accidents, and corporate conflicts.
Our Denver business attorney is experience handling complex corporate matters and un-judicious court rulings. We are up to the challenge of filing court appeals and fighting out long-drawn courtroom battles to achieve the best possible outcomes for our clients.
Why wait, call our Denver business attorney today to find out how we can assist you at (303) 813-1111 or by emailing him using the contact form on this page.
From our law offices in Englewood, we service clients in Colorado as well as throughout the U.S.
1“Feds, law professors say judge wrong to block fracking rules” published in The Denver Post, August 2016.
2"Former DOI Honchos Urge 10th Circ. To Hear Frack Rule Case" published in 360 Law, June 2017.
Getting into government contracting can be a boon for businesses, providing them with a steady stream of work for months or even years. When business leaders decide to get into government contracting, however, asking the following questions first can help them figure out:
The types of contracts to bid on
What they may need to do first to position the business for a government contract win.
Questions to Answer before Bidding on a Government Contract
What is the intent of becoming a government contractor? – Beyond just looking to expand business operations and increase profits, is there another motivation behind getting into government contracting? What unique government need could your business meet? Knowing what your business’ non-financial motivation(s) is or are for getting into government contracting can be pivotal to developing an exceptional bid.
What government agency would my business be a best fit for? – The answer to this question can help you focus your attention on the best-fit agencies, which again can position your bid (and efforts/expended resources) for positive returns.
Is my business prepared to dedicate time and resources to the involved application process? – Putting together a bid for a government contract and then getting through the bidding/review process can take months (or sometimes longer), depending on the nature of the contract. So, before you start spinning your wheels, consider the big picture and whether your business will be able to commit time and staff to support the bid development process, to present the bid in an interview in the future and to undergo the vetting process (among other things).
Is the business prepared to take on the work that could come with a government contract? – Specifically, would your business in its current state be able to handle the current workload, as well as the new work that will come if the bid is won? If not, it’s crucial to consider what additional infrastructure may be needed to support a government contract win.
Who would my business be competing against and how could we beat the competition? – The answer to this question is really intended to help business leaders figure out whether they should be partnering with other businesses in the contracting/work effort and, if so, what businesses would make the best partners moving forward.
Contact a Denver Business Attorney at Downey & Associates, PC
For experienced help positioning your business to win and work on government contracts, contract Denver Business Attorney Thomas E. Downey. Since 1983, Thomas Downey and the other legal professionals at Downey & Associates, PC, have been providing individuals and businesses in the Denver Metro Area and throughout the U.S. with the highest level of legal service for their business, litigation, and property tax issues.
To learn more about our various services and how Mr. Downey can help you, contact our firm by calling (303) 813-1111 or by emailing us using the contact form on this page. From our law offices in Centennial, we serve clients throughout Colorado and the U.S.
Winning a government contract can be a boon for any business. From securing a stable source of revenue to making connections with professionals who can help your business in the future, government contracting can be extremely beneficial.
Before your business can enjoy such advantages, however, it first needs to win a government contract. Below, we’ll point out some of the things you can do to optimally position your business for a government contract win.
Position Your Business for a Govt. Contract Win By…
Teaming up with another business – Although a certain percentage of government contracts are specifically set aside for small businesses, partnering up with one or two other small businesses when bidding for a contract can be a smart move.
This is because collaborating with other businesses can establish credibility for your business, potentially lower your bid and possibly even connect you with businesses that already have a history of working on government contracts (thereby helping your business with compliance-related issues).
Finding a mentor – If your business has never worked on a bid for a government contract before, finding a mentor is another good move when putting together your proposal. Mentors, which can be found at networking events or even through professional associations, can help businesses efficiently navigate the marketplace and sidestep potential mistakes when putting together and presenting bids for government contracts.
Getting certified – Depending on the type of business or work your company performs, getting certified in your field may be another effective way of getting a step ahead of the competition when it comes to winning a government contract. A certification will essentially alert government officials that your business is officially recognized for providing a certain quality/level of services.
Focusing your bid on performance and government-centric values – As you develop your proposal for a government contract, two important points of focus that should drive your proposal should be your company’s past performance (i.e., demonstrating a strong ability to deliver goods/services on time) and a clear understanding of what the government client needs (i.e., demonstrating a clear understanding of the client’s values, challenges and goals).
Contact an Experienced Denver Business Lawyer at Downey & Associates, PC
If you need help procuring or complying with a government contract, contact Denver Business Lawyer Thomas E. Downey. Since 1983, Thomas Downey and the other legal professionals at Downey & Associates, PC, have been providing individuals and businesses in the Denver Metro Area and throughout the U.S. with the highest level of legal service for their litigation, property tax and business legal issues. Our dedication to our clients means that they can always trust that we will aggressively protect their rights and interests while helping them achieve the best possible outcomes to their important legal matters.
To learn more about our various services and how we can help your business, contact us by calling (303) 813-1111 or by emailing us using the contact form on this page.
From our law offices in Centennial, we serve clients throughout Colorado and the U.S.
Downey & Associates PC represents clients in Denver and in the surrounding Colorado communities including Englewood, Littleton, Aurora, Greenwood Village, Broomfield, Boulder, Westminster, Fort Collins, Colorado Springs, Adams County, Denver County, Arapahoe County, Douglas County, Jefferson County, Boulder County, Larimer County and El Paso County.
