[Code of Federal Regulations]

[Title 48, Volume 1]

[Revised as of October 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 48CFR8.406-4]



[Page 134-135]

 

            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. 8.406-4  Termination for cause.



    (a)(1) An ordering activity contracting officer may terminate 

individual orders for cause. Termination for cause shall comply with FAR 

12.403, and may include charging the contractor with excess costs 

resulting from repurchase.

    (2) The schedule contracting office shall be notified of all 

instances where an ordering activity contracting officer has terminated 

for cause an individual order to a Federal Supply Schedule contractor, 

or if fraud is suspected.

    (b) If the contractor asserts that the failure was excusable, the 

ordering activity contracting officer shall follow the procedures at 

8.406-6, as appropriate.

    (c) If the contractor is charged excess costs, the following apply:

    (1) Any repurchase shall be made at as low a price as reasonable, 

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 Order -------- [insert number] under Contract -------- [insert 

number].



    (2) When excess costs are anticipated, the ordering activity may 

withhold funds due the contractor as offset security. Ordering 

activities shall minimize excess costs to be charged against the 

contractor and collect or set-off any excess costs owed.

    (3) If an ordering activity is unable to collect excess repurchase 

costs, it shall notify the schedule contracting office after final 

payment to the contractor.

    (i) The notice shall include the following information about the 

terminated order:

    (A) Name and address of the contractor.

    (B) Schedule, contract, and order number.



[[Page 135]]



    (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) The notice shall also include the following information about 

the purchase 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.

    (d) Only the schedule contracting officer may modify the contract to 

terminate for cause any, or all, supplies or services covered by the 

schedule contract. If the schedule contracting officer has terminated 

any supplies or services covered by the schedule contract, no further 

orders may be placed for those items. Orders placed prior to termination 

for cause shall be fulfilled by the contractor, unless terminated for 

the convenience of the Government by the ordering activity contracting 

officer.