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If a competitor wins a contract you were pursuing, don't give up on eventually earning the work: A contract termination rebid is possible if the winning contractor defaults. A default termination is what usually results if the contractor fails to perform in the interest of the government agency.

Default Termination – Why It Happens

The agency may decide to terminate for default for reasons such as the following:

  • Attempted Fraud
  • Unmet quality requirements
  • Failure to perform the service or deliver the goods within the specified time as required the contract
  • Failure to make progress on a contract, endangering the completion of the contract
  • Failure to complete other tasks or obligations in the contract

Cure Notices and Show-Cause Notices

If the contractor has failed to perform or make progress on the contract, the contracting officer will produce a written notice, called a "cure notice." The contractor then has 10 days to respond to the notice and address the problem(s). If the contractor doesn't make any improvements or a formal response isn't received, a notice of contract default termination may be issued by the contracting officer.

If there isn't time to issue a cure notice, a show-cause notice may be sent. This notice lays out the problems with the contract performance and gives the contractor a chance to show why default termination of the contract should not occur. The response to the show-cause notice may be used when evaluating whether or not to terminate for default.

A contractor may be excused from default termination if its failure to perform is excusable. Here are some examples of excusable conditions that prevent a contractor from performing or completing a contract:

  • Floods, fires, or unusually severe weather
  • Epidemics
  • Strikes
  • Freight embargoes
  • Acts of government
  • Acts of public enemy

Finding Out about Contract Rebid Possibilities

If a contractor was terminated for default and your company would like to take over its portion of the contact, here are some tips to help you pursue a contract rebid effectively:

The easiest way to be the first to know about a contract termination/rebid is to subscribe to a service that delivers daily sales lead reports of new government bids, RFPs and projects. This ensures that you're not missing out on any contract rebid opportunities.

If you want to search for government projects that have "rebid" in the title, try accessing a database of government contracts.

Learn who the contract buyer is and start asking questions, such as what the previous contractor failed to accomplish that caused the agency to terminate for default, and what the agency's current needs are. Letting the agency know that you want to address those needs (with a plan to avoid contract delays, etc.) is a smart way to approach the agency in a consultative way.