Comparing Default and Convenience Terminations in Florida
If you are a Florida construction contractor that regularly does business with the federal government, you can expect that the contract for every project will contain provisions on default and convenience terminations. Federal Acquisition Regulations (FAR) allow the government to cancel, either because officials do not believe the contractor’s performance is adequate or purely for convenience. This basic difference between the two forms of termination is relatively straightforward.
When you dig deeper to look at the details, the distinctions between default and convenience terminations are numerous. They are also important to understand because of how they affect your ability to recover payment after the contract was canceled. It is important to consult with a Florida default and convenience terminations lawyer about your circumstances, but you can read on for some helpful background information.
Default Termination Overview: The government can cancel a contract for cause, meaning that there are issues with the contractor’s performance. A termination for default could be based upon any act that does not serve the government’s interests, including:
- Attempts to defraud;
- Not meeting quality specifications listed in the contract;
- Failure to perform services according to the construction project schedule;
- Failing to deliver supplies or materials by the deadline stated in the contract; or,
- Not making sufficient progress on the project, such that performance is impractical or impossible;
- Defaulting on any other material provisions in the contract.
How Terminations for Convenience Work: Public construction projects are funded by taxpayers, so the government strives to manage them in the most cost-effective and diligent way. When a contract becomes obsolete or the project is no longer necessary, the agency gives itself an out by inserting convenience termination clauses. The contracting officer can cancel for any reason, or no reason at all.
When the federal government terminates a construction project, it must send official notice in writing. The document must include the effective date of cancellation and any special instructions about preserving property or supplies at the site.
Terminations for Default v. Convenience Affect Contractors: The key reason to understand the differences between the two is because cancellation impacts payment. When the contractor is at fault in a default termination, there is no right to payment other than for items already accepted. If the government issues a termination for convenience, a contractor can obtain payment for work performed and materials provided. Plus, you may recover amounts linked to your preparations for the stages of the contract that were eventually canceled.
Speak to a Florida Construction Law Attorney About Default and Convenience Terminations
There is much more to these concepts than the above summary provides, so retaining a construction lawyer is essential. If you are involved in a dispute over terminations for default or convenience, please contact Linkhorst & Hockin, P.A. to speak to a member of our team. You can set up a consultation by calling 561-626-8880 or visiting us online. Our office serves Palm Beach County and South Florida in a range of construction law matters, and we are happy to help.