+------------+---------------------------------------------------------+
| **Overall  | Apply remedies to protect the rights of the Government  |
| Duty**     | under commercial item contracts and simplified          |
|            | acquisitions.                                           |
+------------+---------------------------------------------------------+
| *          | Given contracts with the Contract Terms and Conditions  |
| *Overall** | -- Commercial Items clause (FAR 52.212-4) or purchase   |
|            | orders for other than commercial items, the contract    |
| **Co       | file, evidence of performance problems, and             |
| nditions** | documentation of informal attempts to resolve the       |
|            | problems.[^1]                                           |
+------------+---------------------------------------------------------+
| *          | Select the remedy that will best minimize the impact of |
| *Overall** | contractor performance problems on performance,         |
|            | delivery, and cost. Obtain reasonable consideration for |
| **         | any relief granted the contractor from the contract's   |
| Standard** | original terms and conditions. Document all decisions   |
|            | and contacts with the contractor sufficient to support  |
|            | the Government's posi­tion in disputes or court          |
|            | proceedings. Correctly follow prescribed procedures for |
|            | the remedy.                                             |
+------------+---------------------------------------------------------+
|            |                                                         |
+------------+---------------------------------------------------------+
| **Part A:  |                                                         |
| Select a   |                                                         |
| Formal     |                                                         |
| Contract   |                                                         |
| Remedy**   |                                                         |
+------------+---------------------------------------------------------+
| **         | Select a formal contract remedy for a performance       |
| Sub-Duty** | problem.                                                |
+------------+---------------------------------------------------------+
| **Sub-Duty | Select the formal contract remedy that is appropriate   |
| Standard** | for the contracting situation.                          |
+------------+---------------------------------------------------------+

  --------------- ---------------------------------------------------------
  **Part B: Cure  
  Notice**        

  **Sub-Duty**    Remedy performance problems using a cure notice, the
                  contractor's response, and related action.

  **Sub-Duty      Issue the cure notice when there is sufficient time for
  Standard**      the contractor to cure identified performance problems
                  and a formal remedy is required. Based on an evaluation
                  of the contractor's response, take appropriate action to
                  modify the contract, terminate the contract, or allow the
                  contractor to continue performance without contract
                  modification.

                  

  **Part C:       
  Reject          
  Nonconforming   
  Supplies or     
  Services**      

  **Sub-Duty**    Reject nonconforming supplies or services.

  **Sub-Duty      Reject nonconforming supplies or services unless the
  Standard**      contractor provides adequate consideration or acceptance
                  is otherwise in the Government's best interest.

                  

  **Part D:       
  Enforce         
  Warranty        
  Clause**        

  **Sub-Duty**    Obtain redress under a warranty clause.

  **Sub-Duty      Exercise the Government's rights under a warranty clause
  Standard**      contained in the contract or purchase order.
  --------------- ---------------------------------------------------------

  -------------- ---------------------------------------------------------
  **Part E:      
  Enforce        
  Implied        
  Warranties**   

  **Sub-Duty**   Obtain redress under implied warranties (e.g.,
                 merchantability or fitness for a particular purpose).

  **Sub-Duty     Exercise the Government's rights under a warranty implied
  Standard**     by the contract and related information.
  -------------- ---------------------------------------------------------

+----------+--------+-------------------------------------------------+
| **Po     |        |                                                 |
| licies** |        |                                                 |
+----------+--------+-------------------------------------------------+
| *        | ***Age | ***Subject***                                   |
| **FAR*** | ncy*** |                                                 |
|          |        |                                                 |
|          | ***Sup |                                                 |
|          | pl.*** |                                                 |
+----------+--------+-------------------------------------------------+
| 8.405-4  |        | Delinquent performance on Federal Supply        |
|          |        | Schedules.                                      |
+----------+--------+-------------------------------------------------+
| 12.208   |        | Contract quality assurance.                     |
+----------+--------+-------------------------------------------------+
| 12.213   |        | Other commercial practices.                     |
+----------+--------+-------------------------------------------------+
| 12.301   |        | Solicitation provisions and contract clauses    |
|          |        | for the acquisition of commercial items.        |
+----------+--------+-------------------------------------------------+
| 12.302   |        | Tailoring of provisions and clauses for the     |
|          |        | acquisition of commercial items.                |
+----------+--------+-------------------------------------------------+
| 12.402   |        | Acceptance.                                     |
+----------+--------+-------------------------------------------------+
| 1        |        | Termination for cause.                          |
| 2.403(c) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 12.404   |        | Warranties.                                     |
+----------+--------+-------------------------------------------------+
| 12.503   |        | Applicability of certain laws to Executive      |
|          |        | agency contracts for the acquisition of         |
|          |        | commercial items.                               |
+----------+--------+-------------------------------------------------+
| 22.1022  |        | Withholding of contract payments.               |
+----------+--------+-------------------------------------------------+
| 22.1023  |        | Termination for default.                        |
+----------+--------+-------------------------------------------------+
| 22.1307  |        | Actions because of noncompliance with           |
|          |        | Affirmative Action for Special Disabled and     |
|          |        | Vietnam Era Veterans (FAR 52.222-35).           |
+----------+--------+-------------------------------------------------+
| 22.1407  |        | Actions because of noncompliance with           |
|          |        | Affirmative Action for Work­ers with             |
|          |        | Disabilities (FAR 52.222-36).                   |
+----------+--------+-------------------------------------------------+
| 23.506   |        | Failure to comply with requirements to maintain |
|          |        | a drug-free workplace.                          |
+----------+--------+-------------------------------------------------+
| 46.101   |        | Definitions for quality assurance.              |
+----------+--------+-------------------------------------------------+
| 46.407   |        | Nonconforming supplies or services.             |
+----------+--------+-------------------------------------------------+
| 46.702   |        | General policy relating to warranties.          |
+----------+--------+-------------------------------------------------+
| 46.706   |        | Warranty terms and conditions.                  |
+----------+--------+-------------------------------------------------+
| 46.709   |        | Warranties of commercial items.                 |
+----------+--------+-------------------------------------------------+
| 46.8     |        | Contractor liability for loss of or damage to   |
|          |        | property of the Government.                     |
+----------+--------+-------------------------------------------------+
| 49.402   |        | Termination of fixed-price contracts for        |
|          |        | default.                                        |
+----------+--------+-------------------------------------------------+
| 49.607   |        | Delinquency notices.                            |
+----------+--------+-------------------------------------------------+
| 52.      |        | Inspection/acceptance.                          |
| 212-4(a) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Risk of loss.                                   |
| 212-4(j) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Termination for cause.                          |
| 212-4(m) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Warranty.                                       |
| 212-4(o) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Limitation of liability.                        |
| 212-4(p) |        |                                                 |
+----------+--------+-------------------------------------------------+

+----------+--------+-------------------------------------------------+
| *        | ***Age | ***Subject***                                   |
| **FAR*** | ncy*** |                                                 |
|          |        |                                                 |
|          | ***Sup |                                                 |
|          | pl.*** |                                                 |
+----------+--------+-------------------------------------------------+
| 52.212-5 |        | Contract terms and conditions required to       |
|          |        | implement statutes or Executive Orders --       |
|          |        | commercial items. Alternate I added for waiving |
|          |        | Examination of Records.                         |
+----------+--------+-------------------------------------------------+
| 52.213-1 |        | Fast payment procedure.                         |
+----------+--------+-------------------------------------------------+
| 52.      |        | Inspection/acceptance.                          |
| 213-4(d) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Termination for cause.                          |
| 213-4(g) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 52.      |        | Warranty.                                       |
| 213-4(h) |        |                                                 |
+----------+--------+-------------------------------------------------+
| 5        |        | Liquidated damages subcontracting plan (if FAR  |
| 2.219-16 |        | 52.219-16 was incorporated by an addendum to    |
|          |        | FAR 52.212-4).                                  |
+----------+--------+-------------------------------------------------+
| 5        |        | Equal opportunity (incorporated by reference if |
| 2.222-26 |        | checked in FAR 52.212-5).                       |
+----------+--------+-------------------------------------------------+
| 5        |        | Affirmative Action for Special Disabled and     |
| 2.222-35 |        | Vietnam Era Veterans                            |
+----------+--------+-------------------------------------------------+
| 5        |        | Affirmative Action for Work­ers with             |
| 2.222-36 |        | Disabilities                                    |
+----------+--------+-------------------------------------------------+
| 5        |        | Service Contract Act of 1965, as amended        |
| 2.222-41 |        | (incorporated by reference if checked in FAR    |
|          |        | 52.212-5).                                      |
+----------+--------+-------------------------------------------------+
| 5        |        | Terms for financing of purchases of commercial  |
| 2.232-29 |        | items.                                          |
+----------+--------+-------------------------------------------------+
| 5        |        | Installment payments for commercial items.      |
| 2.232-30 |        |                                                 |
+----------+--------+-------------------------------------------------+
| 5        |        | Warranty of supplies of a noncomplex nature.    |
| 2.246-17 |        |                                                 |
+----------+--------+-------------------------------------------------+
| 5        |        | Warranty of supplies of a complex nature.       |
| 2.246-18 |        |                                                 |
+----------+--------+-------------------------------------------------+
| 5        |        | Warranty of systems and equipment under         |
| 2.246-19 |        | performance specifications or design criteria.  |
+----------+--------+-------------------------------------------------+
| 5        |        | Warranty of services.                           |
| 2.246-20 |        |                                                 |
+----------+--------+-------------------------------------------------+

**Other KSA's**

1\. Knowledge of the most likely procedural errors in using remedies and
ways to avoid them.

2\. Knowledge of implied warranties and the need for a contractor to
provide consideration to the Government for breaching one.

3\. Knowledge of the purpose of liquidated damages clauses (as
motivation, not as penalty).

4\. Knowledge of the possibility that the Government may lose some or
all of remaining rights if it manifests acceptance of nonconforming
acts.

5\. Knowledge of the possibility that continuing acceptance of partial
performance will constructively modify the contractor's responsibility
for substantial performance.

6\. Knowledge of tests for invoking remedies.

7\. Knowledge of examples of actual implied warranties and language that
Boards of Contract Appeals have ruled to be merely "sales talk" or
"puffing" by the contractor (e.g., the "very best Oldsmobile").

8\. Knowledge of commercial contract law.

9\. Ability to identify and apply rules, principles, and relevant
information in making an accurate analysis of contractor performance
problems.

10\. Ability to conscientiously evaluate the details involved in
evaluating contractor performance.

11\. Ability to remain open to new information related to contractor
performance.

12\. Ability to persuade others to accept recommendations about which
remedies to use to influence contractor performance.

13\. Ability to make sound, well-informed, and objective decisions about
contract remedies.

14\. Ability to maintain the honesty and integrity of the acquisition
process.

  -----------------------------------------------------------------------
  **Other Policies and References (Annotate As Necessary):**

  -----------------------------------------------------------------------

![](media/image1.wmf){width="6.204166666666667in"
height="5.932638888888889in"}

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 1\. Obtain evidence of any     | Collect all related facts,          |
| reported contractor failure to | including the contractor's          |
| perform or other breach of     | reactions to Government complaints. |
| contract.                      | Reports on contractor failure to    |
|                                | perform typically relate to:        |
|                                |                                     |
|                                | -   Anticipated or actual late      |
|                                |     delivery;                       |
|                                |                                     |
|                                | -   Failure to control costs; or    |
|                                |                                     |
|                                | -   Unsatisfactory performance.     |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 2\. Determine whether the      | Consider both:                      |
| contractor, the Government, or |                                     |
| both have failed to comply     | -   Contract language; and          |
| with contract requirements.    |                                     |
|                                | -   Other evidence (e.g.,           |
|                                |     contractor representations      |
|                                |     regarding the deliverable).     |
|                                |                                     |
|                                | If at issue, determine whether      |
|                                | contractor representations          |
|                                | regarding the quality, condition,   |
|                                | description, or performance         |
|                                | potential of the deliverable were:  |
|                                |                                     |
|                                | -   Part of the basis of the        |
|                                |     bargain, given the:             |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Price negotiation memorandum    |
|                                |     (i.e., what transpired during   |
|                                |     contract negotiations);         |
|                                |                                     |
|                                | -   The contrac­tor's proposal; and  |
|                                |                                     |
|                                | -   The contract itself; or         |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Mere "sales talk" or "puffing"  |
|                                |     about the offered supply or     |
|                                |     service.                        |
|                                |                                     |
|                                | Verify that the Government has      |
|                                | carried out its promises and        |
|                                | responsibilities, for example:      |
|                                |                                     |
|                                | -   Furnishing of suitable          |
|                                |     Government property at the      |
|                                |     specified time and place;       |
|                                |                                     |
|                                | -   Implied duty to not hinder      |
|                                |     performance;                    |
|                                |                                     |
|                                | -   Implied duty to disclose        |
|                                |     information vital for offer     |
|                                |     preparation or contract         |
|                                |     performance;                    |
|                                |                                     |
|                                | -   Implied duty to provide         |
|                                |     factually correct information;  |
|                                |     and                             |
|                                |                                     |
|                                | -   Implied warranty of             |
|                                |     specifications.                 |
|                                |                                     |
|                                | Analyze potential defenses to       |
|                                | allegations that the:               |
|                                |                                     |
|                                | -   Contractor failed to comply     |
|                                |     with contract requirements,     |
|                                |     such as:                        |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Impracticability of             |
|                                |     performance;                    |
|                                |                                     |
|                                | -   Mutual mistakes; or             |
|                                |                                     |
|                                | -   Unconscionable requirements.    |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Government failed to comply     |
|                                |     with contract requirements,     |
|                                |     such as:                        |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Disclaimers during              |
|                                |     negotiations; or                |
|                                |                                     |
|                                | -   The Sovereign Acts Doctrine.    |
+--------------------------------+-------------------------------------+

+-------------------------------+--------------------------------------+
| **Tasks**                     | **Related Standards**                |
+===============================+======================================+
| 3\. Select one or more formal | Select the remedy or remedies that   |
| remedies.                     | best match the problem and the       |
|                               | extent (if any) to which the         |
|                               | Government is at fault. Generally,   |
|                               | consider the following remedies:     |
|                               |                                      |
|                               | -   Cure notice and the possibility  |
|                               |     of contract termination for      |
|                               |     cause;                           |
|                               |                                      |
|                               | -   Rejection of supplies or         |
|                               |     ser­vices before or after         |
|                               |     acceptance and possible          |
|                               |     termination for cause;           |
|                               |                                      |
|                               | -   Remedies under a warranty clause |
|                               |     (if incorporated as an addendum  |
|                               |     to FAR\                          |
|                               |     52.212-4);                       |
|                               |                                      |
|                               | -   Remedies under implied           |
|                               |     warranties (e.g., the warranty   |
|                               |     of merchantability or the        |
|                               |     warranty of fitness for a        |
|                               |     particular purpose);             |
|                               |                                      |
|                               | -   Termination for convenience or   |
|                               |     cause (see the Termination       |
|                               |     Unit); or                        |
|                               |                                      |
|                               | -   Any other remedies provided in   |
|                               |     the specific clause that was     |
|                               |     breached.                        |
|                               |                                      |
|                               | Alternatively, it may be in the      |
|                               | Government's best interest to accept |
|                               | a supply or service nonconformance   |
|                               | with additional contractor           |
|                               | consideration. (FAR 46.407(f)).      |
+-------------------------------+--------------------------------------+
| 4\. Determine whether to      | Withhold or reduce payment:          |
| reduce or withhold payment.   |                                      |
|                               | -   As provided in the contract, for |
|                               |     example no payment is due under  |
|                               |     the:                             |
|                               |                                      |
|                               |     -   Terms for Financing          |
|                               |         Purchases of Commercial      |
|                               |         Items clause (FAR 52.232-29) |
|                               |         when supplies or services    |
|                               |         will not be delivered or     |
|                               |         performed in accordance with |
|                               |         the contract; or             |
|                               |                                      |
|                               |     -   Installment Payment for      |
|                               |         Commercial Items clause (FAR |
|                               |         52.232-30) when supplies or  |
|                               |         services will not be         |
|                               |         delivered or performed in    |
|                               |         accordance with the          |
|                               |         contract.                    |
|                               |                                      |
|                               |         -   For delivered and        |
|                               |             accepted supplies or     |
|                               |             services to reflect any  |
|                               |             downward adjustment in   |
|                               |             the price agreed to by   |
|                               |             the contractor.          |
+-------------------------------+--------------------------------------+

![](media/image2.wmf){width="6.490972222222222in"
height="5.341666666666667in"}

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 1\. Determine whether to issue | Use a cure notice in situations     |
| a cure notice.                 | where the contractor:               |
|                                |                                     |
|                                | -   Fails to:                       |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Make progress as to endanger    |
|                                |     performance of the contract; or |
|                                |                                     |
|                                | -   Perform some of the other       |
|                                |     requirements of the contract    |
|                                |     (e.g., provide required         |
|                                |     insurance); and                 |
|                                |                                     |
|                                |     -   Has sufficient time         |
|                                |         remaining in the contract   |
|                                |         delivery or performance     |
|                                |         schedule to permit a        |
|                                |         realistic cure period       |
|                                |         (i.e., 10 days or more).    |
|                                |                                     |
|                                | Otherwise, prepare a termination    |
|                                | notice and send it to the           |
|                                | contractor immediately upon         |
|                                | expiration of the delivery period.  |
+--------------------------------+-------------------------------------+
| 2\. Issue the cure notice.     | The notice must:                    |
|                                |                                     |
|                                | -   Follow the format presented in  |
|                                |     FAR 49.607(a);                  |
|                                |                                     |
|                                | -   Clearly identify the            |
|                                |     contractor's failure or         |
|                                |     failures in performance of the  |
|                                |     contract; and                   |
|                                |                                     |
|                                | -   Provide the contractor 10 days  |
|                                |     to cure its failure or          |
|                                |     failures, but may provide any   |
|                                |     longer time that is reasonably  |
|                                |     necessary.                      |
|                                |                                     |
|                                | If the contractor is a small        |
|                                | business, immediately provide a     |
|                                | copy of the cure notice to the:     |
|                                |                                     |
|                                | -   Contracting office small        |
|                                |     business specialist; and        |
|                                |                                     |
|                                | -   Small Business Administration   |
|                                |     Regional Office nearest the     |
|                                |     contractor.                     |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 3\. Obtain contractor's        | Examples of possible contractor     |
| response and de­termine the     | responses include:                  |
| validity of any supporting     |                                     |
| data offered by the            | -   An offer to cure performance;   |
| contractor.                    |                                     |
|                                | -   An offer to provide substantial |
|                                |     performance in exchange for     |
|                                |     relief from some provisions of  |
|                                |     the contract;                   |
|                                |                                     |
|                                | -   Presentation of a case for      |
|                                |     excusable delay;                |
|                                |                                     |
|                                | -   Agreement with the notice's     |
|                                |     facts with no solu­tion offered; |
|                                |     or                              |
|                                |                                     |
|                                | -   No response.                    |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 4\. Determine the next step.   | Typically, alternatives include the |
|                                | following:                          |
|                                |                                     |
|                                | -   Take no further action. Only    |
|                                |     choose this alternative when    |
|                                |     the contractor provides         |
|                                |     sufficient evidence that        |
|                                |     performance failures will be    |
|                                |     cured to complete the contract  |
|                                |     on time.                        |
|                                |                                     |
|                                | -   Modify the contract. Only       |
|                                |     choose this alternative when:   |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   The contractor provides         |
|                                |     evidence of excusable delay     |
|                                |     that merits an extension of the |
|                                |     delivery or performance period  |
|                                |     or other contract modification  |
|                                |     to permit completion within the |
|                                |     original period; or             |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   The modification is in the      |
|                                |     Government's best interests and |
|                                |     the contractor provides:        |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Sufficient evidence that the    |
|                                |     contract will be completed as   |
|                                |     modified; and                   |
|                                |                                     |
|                                | -   Appropriate con­sideration for   |
|                                |     any relief from the contract's  |
|                                |     requirements.                   |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Begin proceedings to terminate  |
|                                |     for cause. Consider the         |
|                                |     following factors before        |
|                                |     determining to terminate a      |
|                                |     contract for cause:             |
|                                |                                     |
|                                |     -   The terms of the contract   |
|                                |         and applicable laws and     |
|                                |         regulations.                |
|                                |                                     |
|                                |     -   The specific failure of the |
|                                |         contractor and the excuses  |
|                                |         for the failure.            |
|                                |                                     |
|                                |     -   The availability of the     |
|                                |         supplies or services from   |
|                                |         other sources.              |
|                                |                                     |
|                                |     -   The urgency of the need for |
|                                |         the supplies or services    |
|                                |         and the period of time      |
|                                |         required to obtain them     |
|                                |         from other sources.         |
|                                |                                     |
|                                |     -   The degree of essentiality  |
|                                |         of the contractor in the    |
|                                |         Government acquisition      |
|                                |         program and the effect of a |
|                                |         termination for default.    |
|                                |                                     |
|                                |     -   The effect of a termination |
|                                |         on the contractor's ability |
|                                |         to liquidate any Government |
|                                |         financing.                  |
|                                |                                     |
|                                |     -   Any other pertinent facts   |
|                                |         and circumstances.          |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 5\. If the decision is to take | In the notice, state that:          |
| no further ac­tion, provide     |                                     |
| written notice to the          | -   The Government accepts the      |
| contractor and document a      |     contractor's commitments to     |
| finding of facts.              |     cure performance.               |
|                                |                                     |
|                                | -   Contractor failure to fulfill   |
|                                |     its commitments to cure         |
|                                |     performance failures will       |
|                                |     re­store the Government's right  |
|                                |     to terminate for cause.         |
+--------------------------------+-------------------------------------+
| 6\. If the decision is to      | In the modification, clearly        |
| modify the contract, execute a | describe the contract changes,      |
| bilateral modification.        | including any:                      |
|                                |                                     |
|                                | -   Change in the delivery          |
|                                |     schedule;                       |
|                                |                                     |
|                                | -   Change in other terms and       |
|                                |     conditions; and                 |
|                                |                                     |
|                                | -   Consideration provided by the   |
|                                |     contractor in return for the    |
|                                |     modification.                   |
+--------------------------------+-------------------------------------+
| 7\. If the decision is to      | Implement the termination following |
| terminate the contractor for   | the procedures described in the     |
| convenience or cause,          | Termination Unit.                   |
| implement the termination.     |                                     |
+--------------------------------+-------------------------------------+
| 8\. Document the contract      | Documentation should include:       |
| file.                          |                                     |
|                                | -   The cure notice;                |
|                                |                                     |
|                                | -   The contractor's response;      |
|                                |                                     |
|                                | -   A summary of any other facts    |
|                                |     that affected the decision on   |
|                                |     the appropriate course of       |
|                                |     action;                         |
|                                |                                     |
|                                | -   A price negotiation memorandum  |
|                                |     covering any negotiations with  |
|                                |     the contractor; and             |
|                                |                                     |
|                                | -   Any contract modification or    |
|                                |     written notice to the           |
|                                |     contractor.                     |
+--------------------------------+-------------------------------------+

![](media/image3.wmf){width="4.48125in" height="7.708333333333333in"}

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 1\. When payment is made using | Correctly determine the date that   |
| fast payment procedures,       | title to the supplies was vested in |
| instruct the contractor to     | the Government and issue            |
| replace, repair, or correct    | instructions to the contractor      |
| supplies lost, damaged, or not | within 180 days from that date.     |
| conforming to purchase         |                                     |
| requirements promptly at the   | The Contracting Officer is          |
| contractor's expense.          | primarily responsible for           |
|                                | collecting any debts resulting from |
|                                | the contractor's failure to         |
|                                | replace, repair, or correct         |
|                                | supplies lost, damaged, or not      |
|                                | conforming to purchase              |
|                                | requirements.                       |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 2\. Determine sufficiency of   | Ensure that the Government is not   |
| evidence to re­ject the work.   | at fault and consider relevant case |
|                                | law and questions such as:          |
|                                |                                     |
|                                | -   Has the Government accepted the |
|                                |     deliverable either explicitly   |
|                                |     or implicitly by silence, late  |
|                                |     rejection, or retention and use |
|                                |     of goods?                       |
|                                |                                     |
|                                | -   Did the Government inspect the  |
|                                |     deliverable prior to            |
|                                |     acceptance? If so:              |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Was the defect patent (i.e.,    |
|                                |     discoverable through            |
|                                |     inspection) or latent?          |
|                                |                                     |
|                                | -   Was fraud or gross mistake      |
|                                |     amounting to fraud the reason a |
|                                |     discoverable patent defect      |
|                                |     survived inspection prior to    |
|                                |     acceptance?                     |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Was acceptance predicated on    |
|                                |     the reasonable assumption that  |
|                                |     the nonconformance would be     |
|                                |     cured (discovery at time of     |
|                                |     acceptance)?                    |
|                                |                                     |
|                                | -   Was acceptance reasonably       |
|                                |     induced by the seller's         |
|                                |     assurances (no discovery at the |
|                                |     time of acceptance)?            |
|                                |                                     |
|                                | -   Is the Government estopped by   |
|                                |     reason of ac­cepting             |
|                                |     nonconforming work under a      |
|                                |     prior contract for the same     |
|                                |     requirement?                    |
|                                |                                     |
|                                | If the Government has accepted the  |
|                                | deliverable, only consider revoking |
|                                | acceptance if the Government        |
|                                | reports the defect to the           |
|                                | contractor:                         |
|                                |                                     |
|                                | -   Within a reasonable time after  |
|                                |     the defect was discovered or    |
|                                |     should have been discovered;    |
|                                |     and                             |
|                                |                                     |
|                                | -   Before substantial change       |
|                                |     occurs in the condition of the  |
|                                |     item, unless the change is due  |
|                                |     to the defect in the item.      |
|                                |                                     |
|                                | Note: If the Government is at       |
|                                | fault, op­tions may include          |
|                                | modifying the contract or           |
|                                | terminating for convenience.        |
+--------------------------------+-------------------------------------+

+-------------------------------+--------------------------------------+
| **Tasks**                     | **Related Standards**                |
+===============================+======================================+
| 3\. Determine whether to      | A minor nonconformance may be        |
| accept a minor                | accepted without additional          |
| nonconformance.               | contractor consideration as long as  |
|                               | the nonconformance does not          |
|                               | adversely affect the safety, health, |
|                               | reliabil­ity, durability,             |
|                               | perfor­mance, interchangeability of   |
|                               | parts or assemblies, weight, or      |
|                               | appearance (where a consideration),  |
|                               | or any other basic objective of the  |
|                               | Government requirement.              |
|                               |                                      |
|                               | To assist in making this             |
|                               | determination, the Government may    |
|                               | establish a joint                    |
|                               | contractor-Government review group.  |
|                               | Acceptance of supplies and services  |
|                               | with any critical or major           |
|                               | nonconformance is outside the scope  |
|                               | of such a review group.              |
|                               |                                      |
|                               | Discourage the repeated tender of    |
|                               | nonconforming supplies or services,  |
|                               | including those with only minor      |
|                               | nonconformance, by appropriate       |
|                               | action, such as rejection and        |
|                               | documenting the contractor's         |
|                               | performance record.                  |
+-------------------------------+--------------------------------------+
| 4\. Notify the contractor of  | Promptness in giving the rejection   |
| the Government's rejection of | notice is essential because, if      |
| nonconforming supplies or     | timely notice of rejection is not    |
| services.                     | furnished, acceptance may in certain |
|                               | cases be implied as a matter of law. |
| .                             | The notice must:                     |
|                               |                                      |
|                               | -   Include the reasons for          |
|                               |     rejection.                       |
|                               |                                      |
|                               | -   Require the contractor to repair |
|                               |     or replace the supplies or       |
|                               |     reperform the service at no      |
|                               |     increase in the contract price.  |
|                               |                                      |
|                               | -   Be in writing if:                |
|                               |                                      |
|                               |     -   The supplies or services     |
|                               |         have been rejected at a      |
|                               |         place other than the         |
|                               |         contractor's plant;          |
|                               |                                      |
|                               |     -   The contractor persists in   |
|                               |         offering nonconforming       |
|                               |         supplies or services for     |
|                               |         acceptance; or               |
|                               |                                      |
|                               |     -   Delivery or performance was  |
|                               |         late without excusable       |
|                               |         cause.                       |
|                               |                                      |
|                               | Allow time (usually 10 days) for the |
|                               | contractor to respond.               |
+-------------------------------+--------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 5\. Review the contractor's    | Examples of possible contractor     |
| response.                      | responses include:                  |
|                                |                                     |
|                                | -   Correction of the               |
|                                |     nonconformance without further  |
|                                |     comment;                        |
|                                |                                     |
|                                | -   An offer to correct the         |
|                                |     nonconformance;                 |
|                                |                                     |
|                                | -   Proposal that the Government    |
|                                |     accept the nonconforming        |
|                                |     supplies or services for a      |
|                                |     lower price or other            |
|                                |     consideration;                  |
|                                |                                     |
|                                | -   Refusal to correct work or      |
|                                |     offer consideration; or         |
|                                |                                     |
|                                | -   No response.                    |
+--------------------------------+-------------------------------------+
| 6\. Determine whether to       | Normally:                           |
| accept the contractor's offer  |                                     |
| to cure the nonconformance.    | -   Accept the offer at no change   |
|                                |     in contract price if the        |
|                                |     nonconformance can reasonably   |
|                                |     be cured within the contract's  |
|                                |     delivery or performance         |
|                                |     schedule.                       |
|                                |                                     |
|                                | -   If a cure is not possible       |
|                                |     within the delivery or          |
|                                |     performance schedule:           |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Determine whether to extend the |
|                                |     delivery or performance         |
|                                |     schedule; and                   |
|                                |                                     |
|                                | -   If the decision is to extend    |
|                                |     the delivery or performance     |
|                                |     schedule, determine:            |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   The reasonableness of the       |
|                                |     proposed extension.             |
|                                |                                     |
|                                | -   Whether to require              |
|                                |     consideration from the          |
|                                |     contractor and the amount of    |
|                                |     such consideration.             |
|                                |                                     |
|                                |     -   If the contractor had       |
|                                |         reasonable grounds to       |
|                                |         believe that the            |
|                                |         deliverable was acceptable, |
|                                |         do not require              |
|                                |         consideration for a         |
|                                |         reasonable extension of the |
|                                |         delivery or performance     |
|                                |         schedule.                   |
|                                |                                     |
|                                |     -   Otherwise, obtain           |
|                                |         consideration.              |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 7\. Determine whether to       | Only accept nonconforming supplies  |
| accept noncon­forming supplies  | when in the Government's interest.  |
| or services given a contractor | Consider any:                       |
| offer of considera­tion.        |                                     |
|                                | -   Consideration offered by the    |
|                                |     contractor.                     |
|                                |                                     |
|                                | -   Information regarding the       |
|                                |     nature and extent of the        |
|                                |     nonconformance.                 |
|                                |                                     |
|                                | -   Written warranty that requires  |
|                                |     the contractor to make any      |
|                                |     necessary repairs or            |
|                                |     corrections after acceptance at |
|                                |     no cost to the Government.      |
|                                |                                     |
|                                | -   Recommendation for acceptance   |
|                                |     or rejection from other members |
|                                |     of the Government acquisition   |
|                                |     team along with the rationale   |
|                                |     supporting that recommendation. |
|                                |     Give special attention to any   |
|                                |     recommendation about the        |
|                                |     ability of the supply or        |
|                                |     service to meet health, safety, |
|                                |     and performance requirements.   |
+--------------------------------+-------------------------------------+
| 8\. If the contractor refuses  | Do not terminate for cause, if the  |
| to cure the nonconformance or  | contractor makes a persuasive case  |
| offer acceptable additional    | that:                               |
| consideration, determine       |                                     |
| whether to initiate            | -   There has been acceptance, or   |
| termination for cause.         |                                     |
|                                | -   Work is acceptable under the    |
|                                |     contract's terms and            |
|                                |     conditions.                     |
|                                |                                     |
|                                | Terminate for cause if:             |
|                                |                                     |
|                                | -   The contractor refuses or is    |
|                                |     not likely to cure the          |
|                                |     nonconformance, and             |
|                                |                                     |
|                                | -   Offered consideration (if any)  |
|                                |     is not acceptable.              |
+--------------------------------+-------------------------------------+

![](media/image4.wmf){width="3.2840277777777778in"
height="6.167361111111111in"}

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+--------------------------------+-------------------------------------+
| 1\. Verify that the warranty   | Base the verification on:           |
| clause applies.                |                                     |
|                                | -   The terms and conditions of the |
|                                |     applicable warranty clause in   |
|                                |     the contract (e.g., dura­tion of |
|                                |     the warranty);                  |
|                                |                                     |
|                                | -   Whether Government obligations  |
|                                |     under the clause have been met; |
|                                |     and                             |
|                                |                                     |
|                                | -   Whether the facts support the   |
|                                |     Government's case for invoking  |
|                                |     the warranty.                   |
+--------------------------------+-------------------------------------+
| 2\. Notify the contractor that | Prepare a written notice to the     |
| the Government intends to      | contractor of any breach of         |
| exercise its rights under the  | warranty. Assure that the notice:   |
| warranty clause.               |                                     |
|                                | -   Meets any requirements          |
|                                |     established in the contract     |
|                                |     warranty clause; and            |
|                                |                                     |
|                                | -   Is provided to the contractor   |
|                                |     within the time con­straints     |
|                                |     established in the clause.      |
+--------------------------------+-------------------------------------+
| 3\. Consider the contractor's  | If the warranty clause (e.g.,       |
| recommendation for corrective  | Warranty of Supplies of a Complex   |
| action (if any).               | Nature (FAR 52.246-18)) and         |
|                                | Warranty of Systems and Equipment   |
|                                | Under Performance Specifications or |
|                                | Design Criteria (FAR 52.246-19))    |
|                                | requires the contractor to submit a |
|                                | recommendation for corrective       |
|                                | action, consider that               |
|                                | recommendation in determining the   |
|                                | appropriate corrective action.      |
|                                |                                     |
|                                | Whenever practicable, reach         |
|                                | agreement with the contractor on    |
|                                | the appropriate corrective action.  |
|                                |                                     |
|                                | Document results of any agreement   |
|                                | with the contactor.                 |
+--------------------------------+-------------------------------------+
| 4\. Formally instruct the      | When not part of the original       |
| contractor on the required     | notice of the breach of warranty,   |
| corrective action.             | provide written notice of the       |
|                                | required contractor action with a   |
|                                | reasonable period to complete that  |
|                                | action. Select the best alternative |
|                                | for making the Government whole     |
|                                | available under the warranty        |
|                                | clause, given the circumstances.    |
|                                | Choose from among the alternatives  |
|                                | presented in the contract clause.   |
+--------------------------------+-------------------------------------+
| 5\. Monitor contractor         | Ensure that the Government receives |
| compliance with instructions   | the full measure of relief provided |
| for corrective action.         | by the warranty terms and           |
|                                | conditions.                         |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+================================+=====================================+
| 6\. If the contractor fails to | If the contractor fails to take the |
| complete the required          | required corrective action, obtain  |
| corrective action, take        | the required supplies or services   |
| unilateral action against the  | from other sources and charge the   |
| contractor.                    | related cost to the contractor.     |
|                                | This cost may be recovered by:      |
|                                |                                     |
|                                | -   An offset against an existing   |
|                                |     contract; or                    |
|                                |                                     |
|                                | -   A claim against the contractor. |
+--------------------------------+-------------------------------------+

![](media/image5.wmf){width="3.486111111111111in"
height="7.621527777777778in"}

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+--------------------------------+-------------------------------------+
| 1\. Verify that the            | Consider invoking the warranty of   |
| deliverable is covered by an   | merchantability or fitness for a    |
| implied warranty.              | particular purpose only:            |
|                                |                                     |
|                                | -   If the:                         |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   Contract or purchase order      |
|                                |     includes FAR 52.212-4 or        |
|                                |     52.213-4; or                    |
|                                |                                     |
|                                | -   Purchase order for other than   |
|                                |     commercial items does not       |
|                                |     include inspection terms that   |
|                                |     make acceptance final and       |
|                                |     conclusive absent latent        |
|                                |     defects, fraud, or gross        |
|                                |     mistake amounting to fraud; and |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   The Government has not waived   |
|                                |     the warranty with respect to    |
|                                |     the defect at issue under the   |
|                                |     Uniform Commercial Code (UCC).  |
|                                |                                     |
|                                | Correctly identify other implied    |
|                                | warranties (if any) under the       |
|                                | contract.                           |
+--------------------------------+-------------------------------------+
| 2\. If the contract includes   | If the contractor accepted a        |
| FAR 52.212-4, determine        | purchase order (i.e., offer from    |
| whether the contract disclaims | the Government), correctly          |
| the Government's rights under  | determine the legal effect of any   |
| FAR 52.212-4(o).               | disclaimer in a letter of           |
|                                | acceptance.                         |
|                                |                                     |
|                                | If the Government accepted the      |
|                                | contractor's offer, correctly       |
|                                | ascertain whether the resulting     |
|                                | contract excludes or limits the     |
|                                | Government's rights under           |
|                                | 52.212-4(o).                        |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+--------------------------------+-------------------------------------+
| 3\. If applicable, determine   | Correctly determine whether the     |
| whether the warranty of        | item is or is not merchantable      |
| merchantability has been       | under the tests in the UCC. Under   |
| breached.                      | the UCC 2A-314, for goods to be     |
|                                | merchantable they must:             |
|                                |                                     |
|                                | -   Pass without objection in the   |
|                                |     trade under the contract        |
|                                |     description;                    |
|                                |                                     |
|                                | -   In the case of fungible goods,  |
|                                |     be of fair average quality      |
|                                |     within the description;         |
|                                |                                     |
|                                | -   Be fit for the ordinary         |
|                                |     purposes for which such goods   |
|                                |     are used;                       |
|                                |                                     |
|                                | -   Be, within the variations       |
|                                |     permitted by the agreement, of  |
|                                |     even kind, quality and quantity |
|                                |     within each unit and among all  |
|                                |     units involved;                 |
|                                |                                     |
|                                | -   Be adequately contained,        |
|                                |     packaged, and labeled as the    |
|                                |     agreement may require; and      |
|                                |                                     |
|                                | -   Conform to the promise or       |
|                                |     affirmations of fact made on    |
|                                |     the container or label if any.  |
+--------------------------------+-------------------------------------+
| 4\. If applicable, determine   | Determine whether:                  |
| whether the contractor has     |                                     |
| breached the warranty of       | -   The seller knew the particular  |
| fitness for a particular       |     purpose for which the           |
| purpose.                       |     Government intended to use the  |
|                                |     item; and                       |
|                                |                                     |
|                                | -   The Government relied upon the  |
|                                |     contractor's skill and judgment |
|                                |     that the item would be          |
|                                |     appropriate for that particular |
|                                |     purpose.                        |
+--------------------------------+-------------------------------------+
| 5\. Notify the contractor of   | Notify the contractor within a      |
| the breach of the implied      | reasonable time after discovery of  |
| warranty.                      | the breach and within any deadlines |
|                                | established by the contract. The    |
|                                | notification:                       |
|                                |                                     |
|                                | -   Should identify:                |
|                                |                                     |
|                                |     -   The contract;               |
|                                |                                     |
|                                |     -   The item; and               |
|                                |                                     |
|                                |     -   State the basis for         |
|                                |         believing that an applied   |
|                                |         warranty exists.            |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   May:                            |
|                                |                                     |
|                                | ```{=html}                          |
|                                | <!-- -->                            |
|                                | ```                                 |
|                                | -   State the Government's position |
|                                |     on resolving the breach of      |
|                                |     warranty (e.g., request         |
|                                |     replacement of the item); or    |
|                                |                                     |
|                                | -   Request a contractor            |
|                                |     recommendation on the best way  |
|                                |     to resolve the breach.          |
+--------------------------------+-------------------------------------+

+--------------------------------+-------------------------------------+
| **Tasks**                      | **Related Standards**               |
+--------------------------------+-------------------------------------+
| 6\. Negotiate acceptable       | Based on any contractor response to |
| relief.                        | the notice of the breach of         |
|                                | warranty and other available        |
|                                | information, negotiate acceptable   |
|                                | relief. Alternatives typically      |
|                                | include:                            |
|                                |                                     |
|                                | -   No cost to the Government:      |
|                                |                                     |
|                                |     -   Repair;                     |
|                                |                                     |
|                                |     -   Replacement; or             |
|                                |                                     |
|                                |     -   Reperformance; or           |
|                                |                                     |
|                                |         -   Refund all or part of   |
|                                |             the purchase price.     |
+--------------------------------+-------------------------------------+
| 7\. Monitor contractor         | Ensure that the Government is made  |
| compliance with agreements (if | whole.                              |
| any) to make the Government    |                                     |
| whole.                         |                                     |
+--------------------------------+-------------------------------------+
| 8\. If the contractor fails to | If the contract has already closed  |
| provide acceptable relief      | out, file a claim against the       |
| within a reasonable time, take | contractor.                         |
| appropriate action.            |                                     |
|                                | If time remains in the delivery or  |
|                                | performance period (at least 10     |
|                                | days) issue a cure notice.          |
|                                |                                     |
|                                | If the delivery or period has       |
|                                | expired, prepare a termination      |
|                                | notice.                             |
+--------------------------------+-------------------------------------+

+---------------------+-----------------------+-----------------------+
| **[Pro              | **[O                  | **[Co                 |
| blem]{.smallcaps}** | ptions]{.smallcaps}** | mments]{.smallcaps}** |
+---------------------+-----------------------+-----------------------+
| The deliver­able has | Reschedule the        | Appropriate when:     |
| been or will be     | delivery date in      |                       |
| delivered late and  | exchange for          | -   There is a        |
| the delay is not    | consideration.        |     rea­sonable        |
| ex­cusable.          |                       |     probability of    |
|                     |                       |     delivery by the   |
|                     |                       |     new date; and     |
|                     |                       |                       |
|                     |                       | -   The requiring     |
|                     |                       |     activity can live |
|                     |                       |     with the new      |
|                     |                       |     date.             |
+---------------------+-----------------------+-----------------------+
|                     | Reduce or suspend     | Appropriate when:     |
|                     | commercial finance    |                       |
|                     | payments under FAR    | -   Commercial        |
|                     | 52.232-29(a) or       |     finance payments  |
|                     | 52.232-30(a).         |     are being made;   |
|                     |                       |     and               |
|                     |                       |                       |
|                     |                       | -   Performance of    |
|                     |                       |     the contract is   |
|                     |                       |     en­dangered by the |
|                     |                       |     contractor's      |
|                     |                       |     failure to make   |
|                     |                       |     progress.         |
+---------------------+-----------------------+-----------------------+
|                     | Accept late delivery  | Appropriate when:     |
|                     | and impose liquidated |                       |
|                     | damages.              | -   The contract      |
|                     |                       |     provides for      |
|                     | (Note: Liquidated     |     liquidated        |
|                     | damages can be        |     damages; and      |
|                     | incorporated by       |                       |
|                     | addendum to FAR       | -   There is a        |
|                     | 52.212-4 if a         |     reasonable        |
|                     | customary commercial  |     probability of    |
|                     | practice for the      |     delivery by a     |
|                     | market.)              |     date that the     |
|                     |                       |     requir­ing         |
|                     |                       |     activity can      |
|                     |                       |     tolerate.         |
+---------------------+-----------------------+-----------------------+
|                     | Send a cure notice 10 | Appropriate when      |
|                     | days or more prior to | there is little       |
|                     | the contract's        | probability of        |
|                     | delivery date, or     | delivery by a date    |
|                     | termination notice    | that the requiring    |
|                     | immediately upon      | activity can tolerate |
|                     | expiration of the     | and/or the con­tractor |
|                     | delivery period.      | has not offered       |
|                     |                       | adequate              |
|                     |                       | con­sideration.        |
+---------------------+-----------------------+-----------------------+

+---------------------+-----------------------+-----------------------+
| **[Pro              | **[O                  | **[Co                 |
| blem]{.smallcaps}** | ptions]{.smallcaps}** | mments]{.smallcaps}** |
+---------------------+-----------------------+-----------------------+
| The deliverable has | Accept the            | Appropriate when the  |
| not been implicitly | deliverable without   | nonconformance is     |
| or explic­itly       | consideration.        | mi­nor and obtaining   |
| accepted and does   |                       | consideration is not  |
| not conform to      |                       | in the Government's   |
| contract            |                       | interests (per FAR    |
| requirements.       |                       | 46.407(f)).           |
+---------------------+-----------------------+-----------------------+
|                     | Accept the            | Appropriate when the  |
|                     | deliverable in        | requiring activity    |
|                     | ex­change for          | can tolerate          |
|                     | consideration.        | non-conformance (per  |
|                     |                       | FAR 46.407(c)).       |
+---------------------+-----------------------+-----------------------+
|                     | Accept the            | Appropriate when the  |
|                     | deliverable and       | defect is covered by  |
|                     | in­voke a warranty to  | a warranty clause or  |
|                     | have the deliv­erable  | an implied warranty   |
|                     | brought up to         | (see FAR 52.212-4(o)) |
|                     | specification after   | and immediate         |
|                     | acceptance.           | ac­ceptance will       |
|                     |                       | benefit the requiring |
|                     |                       | activity.             |
+---------------------+-----------------------+-----------------------+
|                     | Reject the            | Appropriate when      |
|                     | deliverable and       | there is a reasonable |
|                     | obtain correction or  | expecta­tion that a    |
|                     | replacement at no     | satisfactory          |
|                     | cost to the           | replacement will be   |
|                     | Government.           | provided by the       |
|                     |                       | delivery date in the  |
|                     | Tell the payment      | contract, or, for     |
|                     | office to withhold    | consid­eration, within |
|                     | payment until an      | a reasonable time     |
|                     | acceptable            | thereafter.           |
|                     | deliv­erable has been  |                       |
|                     | furnished.            |                       |
+---------------------+-----------------------+-----------------------+
|                     | Reject the            | Appropriate when      |
|                     | deliverable and send  | there is little       |
|                     | a cure or termination | expectation of        |
|                     | notice.               | receiving an          |
|                     |                       | acceptable product    |
|                     |                       | within a reasonable   |
|                     |                       | time.                 |
+---------------------+-----------------------+-----------------------+

+--------------------+-----------------------+------------------------+
| **[Prob            | **[O                  | **[C                   |
| lem]{.smallcaps}** | ptions]{.smallcaps}** | omments]{.smallcaps}** |
+--------------------+-----------------------+------------------------+
| The deliverable    | Reject the supply or  | Appropriate when the   |
| has been accepted  | service after         | Government reports the |
| but does not       | acceptance as         | defect to the          |
| conform to         | provided in FAR       | contractor:            |
| con­tract           | 52.212-4(a).          |                        |
| requirements.      |                       | -   Within a           |
|                    |                       |     reasonable time    |
|                    |                       |     after the defect   |
|                    |                       |     was or should have |
|                    |                       |     been discovered;   |
|                    |                       |     and                |
|                    |                       |                        |
|                    |                       | -   Before substantial |
|                    |                       |     change occurs in   |
|                    |                       |     the condition of   |
|                    |                       |     the item, unless   |
|                    |                       |     the change is due  |
|                    |                       |     to the defect in   |
|                    |                       |     the item.          |
+--------------------+-----------------------+------------------------+
|                    | Invoke an express     | Appropriate when a     |
|                    | warranty.             | warranty clause has    |
|                    |                       | been incorporated by   |
|                    |                       | an addendum to         |
|                    |                       | 52.212-4.              |
+--------------------+-----------------------+------------------------+
|                    | Invoke an implied     | Appropriate when an    |
|                    | warranty.             | implied warranty       |
|                    |                       | applies (FAR           |
|                    |                       | 52.212-4(o)).          |
+--------------------+-----------------------+------------------------+
| Other breaches     | Invoke whatever       | Examples:              |
| when the           | remedy (if any) is    |                        |
| Contracting        | established in FAR    | -   Liquidated damages |
| Officer has        | clauses (if any)      |     under; the         |
| exhausted all      | incorporated by       |     Liquidated Damages |
| efforts at         | addenda or checked in |     -- Subcontracting  |
| informal           | FAR 52.212-5.         |     Plan (FAR          |
| resolution of the  |                       |     52.219-16) for     |
| problem.           |                       |     failing to com­ply  |
|                    |                       |     with the           |
|                    |                       |     subcontracting     |
|                    |                       |     plan.              |
|                    |                       |                        |
|                    |                       | -   Cancellation,      |
|                    |                       |     suspension, or     |
|                    |                       |     termination of the |
|                    |                       |     contract under     |
|                    |                       |     Equal Opportunity  |
|                    |                       |     (FAR 52.222-26)    |
|                    |                       |     (incorporated by   |
|                    |                       |     reference if       |
|                    |                       |     checked in FAR     |
|                    |                       |     52.212-5).         |
|                    |                       |                        |
|                    |                       | -   Withholding of     |
|                    |                       |     payments and       |
|                    |                       |     termination under  |
|                    |                       |     Service Contract   |
|                    |                       |     Act of 1965, As    |
|                    |                       |     Amended (FAR       |
|                    |                       |     52.222-41)         |
|                    |                       |     (incorporated by   |
|                    |                       |     reference if       |
|                    |                       |     checked in FAR     |
|                    |                       |     52.212-5).         |
+--------------------+-----------------------+------------------------+
|                    | Suspend or reduce     | Appropriate when the   |
|                    | payments under FAR    | supplies deliverable   |
|                    | 52.232-29 or 30.      | or services will not   |
|                    |                       | be delivered or        |
|                    |                       | performed in           |
|                    |                       | accordance with the    |
|                    |                       | contract.              |
+--------------------+-----------------------+------------------------+
|                    | Send a cure notice    | Appropriate when the   |
|                    | (10 days or more      | breach is of           |
|                    | prior to the          | sufficient magnitude   |
|                    | contract's delivery   | to warrant termination |
|                    | date).                | for cause.             |
+--------------------+-----------------------+------------------------+

[^1]: Note: For the purpose of training this unit, do not use contracts
    with addenda to FAR 52.212-4 that incorporate additional remedies
    (e.g., liquidated damages). Use contracts that incorporate
    commercial warranties; also use contracts with no addenda that limit
    or replace the language at FAR 52.212-4(a) and 212-4(o).