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You are a government Contracting Officer. Your contractor fails to make a delivery because a key...

You are a government Contracting Officer. Your contractor fails to make a delivery because a key subcontractor has defaulted. As contracting officer you have the authority to terminate the prime contractor for default. Should you terminate for default or for convenience?

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When the prime contractor fails to make delivery, I should terminate the prime contractor under termination for default. When the contactor fails to perform his contractual obligations, the termination applied is termination for default and the termination for convenience is used when the government terminates a contract when it is in the government’s best interest without considering whether the contractor has fulfilled his obligations or not. All the terminations under termination for convenience are not legally valid and require the government to compensate the contractor with specific statutory damages. But termination for default does not make the government liable for the associated costs of undelivered work and we have the right to terminate the contract for default as the contractor failed to deliver the contract.

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