The Trump Administration has undertaken a series of contract terminations to realign federal spending with the Administration’s goals.[1] The Federal Acquisition Regulations (“FAR”) outline the process for contract termination. If a contract is terminated, contractors must be aware of the steps they can take to maximize recovery of termination costs.

In a federal contract, there are two types of termination, termination for default and termination for convenience. A contract may be terminated for default when the contractor fails to perform its obligations, such as by failing to make adequate progress on the project.[2] In a termination for default, the government is generally required to give notice and provide the opportunity for the contractor to “cure” or correct the problem before a termination decision is made.