We’ve either heard of or seen several instances where a letter terminating a government contract for the government’s convenience has included an incredibly brief time for submitting a settlement proposal.Regulations state that a contractor terminated for the government’s convenience has one year to submit a settlement proposal. This makes sense. Depending on the type of contract, the contractor may not even know all of the expenses viable in a settlement. Further, some contractors will require outside legal and accounting support; getting those resources hired may take more time than permitted in the letters that we have seen.
So what should a contractor do? First, ask the contracting officer for a reasonable extension. Keep in mind that the contracting officers are under pressure to wrap these contracts up quickly and demanding a full year will likely be poorly received. Second, take the time necessary to complete an accurate and complete settlement proposal. Rushing to get a settlement proposal done too quickly could result in incomplete recovery or allegations of a false claim. If the contracting officer rejects the settlement proposal as late, then and only then would a contractor seek relief from the appropriate board of contract appeals.
As in all things during these interesting times, it is critical to understand your rights but also to be prudent in asserting them. Sometimes, the fight won’t be worth the recovery and it is important to think through that equation carefully. Be sure to reach out to a trusted advisor to help with this process.
As I was writing this blog, Jason Miller at Federal News Network posted a story on a draft Executive Order to consolidate purchasing authority at GSA. There are few details available, but one consequence of such a consolidation may be a flood of terminations as individual agencies lose their ability to administer contracts. Should that happen, every government contractor should be prepared to submit settlement proposals.
Questions? Contact one of our expert FAR Terminations for Convenience attorneys specializing in government contract disputes.
