XL EagleTermination for default (Termination for default (T4D) / termination for cause)
Termination for default stands for Termination for default (T4D) / termination for cause. Termination for default happens when the government ends a contract because the contractor failed to perform, such as missing delivery dates, failing to make progress, or not meeting other contract terms. Under commercial contracts it is called termination for cause.
Before terminating for some failures, the government usually must send a cure notice giving the contractor time to fix the problem. A default termination can make the contractor liable for the extra cost of buying the work elsewhere and is reported in federal past performance systems. If the default is later found improper, it is generally converted to a termination for convenience.
Why it matters to a small contractor
A default termination can hurt your ability to win future federal work for years. If you are falling behind, talk to the contracting officer early, put your recovery plan in writing, and answer every cure or show cause notice on time.
Example
A small contractor misses delivery of furniture by three weeks without explanation and does not respond to a show cause notice. The agency terminates for default and later bills the contractor for the higher price paid to another vendor.
Termination for default: common questions
What is the difference between termination for default and termination for convenience?
Default is for contractor failure and can bring liability for excess costs. Convenience is for the government's own reasons, and the contractor is paid for work done.
Can a termination for default be challenged?
Yes. It is a contracting officer decision that can be appealed under the Contract Disputes Act. If found improper, it is usually converted to a termination for convenience.
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