[Code of Federal Regulations]
[Title 48, Volume 1]
[Revised as of October 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR8.405-5]

[Page 125-126]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
                CHAPTER 1--FEDERAL ACQUISITION REGULATION
 
PART 8_REQUIRED SOURCES OF SUPPLIES AND SERVICES--Table of Contents
 
                  Subpart 8.4_Federal Supply Schedules
 
Sec.  8.405-5  Termination for default.

    (a)(1) An ordering office may terminate any one or more orders for 
default in accordance with part 49, Termination of Contracts. The 
schedule contracting office shall be notified of all cases where an 
ordering office has declared a Federal Supply Schedule contractor in 
default or fraud is suspected.
    (2) Should the contractor claim that the failure was excusable, the 
ordering office shall promptly refer the matter to the schedule 
contracting office. In the absence of a decision by the schedule 
contracting office (or by the head of the schedule contracting agency, 
on appeal) excusing the failure, the ordering office may charge the 
contractor with excess costs resulting from repurchase.

[[Page 126]]

    (3) Any repurchase shall be made at as reasonable a price as 
possible considering the quality required by the Government, delivery 
requirement, and administrative expenses. Copies of all repurchase 
orders, except the copy furnished to the contractor or any other 
commercial concern, shall include the notation ``Repurchase against the 
account of ------------ [insert contractor's name] under Delivery Order 
------------ [insert number] under Contract ------------ [insert 
number]''.
    (4) When excess costs are anticipated, the ordering office may 
withhold funds due the contractor as offset security. Ordering offices 
shall minimize excess costs to be charged against the contractor and 
collect or setoff any excess costs owed.
    (5) If an ordering office is unable to collect excess costs, it 
shall take the following actions:
    (i) Notify the schedule contracting office within 60 days after 
final payment to the replacement contractor. The notice shall include 
the following information about the defaulted order:
    (A) Name and address of the contractor.
    (B) Schedule, contract, and order number.
    (C) National stock or special item number(s), and a brief 
description of the item(s).
    (D) Cost of schedule items involved.
    (E) Excess costs to be collected.
    (F) Other pertinent data.
    (ii) In addition to the above, the notice shall include the 
following information about the replacement contract:
    (A) Name and address of the contractor.
    (B) Item repurchase cost.
    (C) Repurchase order number and date of payment.
    (D) Contract number, if any.
    (E) Other pertinent data.
    (b) Only the schedule contracting officer may terminate for default 
any or all items covered by the schedule contract. When notified of 
default action by the schedule contracting officer with respect to 
defaulted items, ordering offices shall--
    (1) Refuse to accept further performance by the contractor;
    (2) Not place further orders with the contractor;
    (3) Repurchase against the contractor in default from sources 
designated by the schedule contracting officer; or
    (4) Proceed as otherwise directed by the schedule contracting 
officer.
    (c) All actions taken regarding terminations for default shall 
comply with the applicable requirements in part 49.

[48 FR 42129, Sept. 19, 1983, as amended at 59 FR 53717, Oct. 25, 1994]