FAR 49.402-1—The Government’s right.
Plain-English Summary
FAR 49.402-1 explains the Government’s basic right to terminate a contract for default when the contract includes the Default clause at FAR 52.249-8. It identifies the three core default triggers: failure to make delivery of supplies or perform services on time, failure to perform any other contract provision, and failure to make progress when that failure endangers contract performance. The section also makes clear that this right is not automatic; it is subject to the notice requirements in the Default clause, which means the contracting officer must follow the procedural steps in the clause before exercising termination. In practice, this provision is the Government’s primary contractual remedy for serious contractor nonperformance under standard fixed-price supply and service contracts. It matters because a default termination can have major consequences for the contractor, including liability for excess reprocurement costs and negative past performance impacts, while also giving the Government a tool to protect mission needs when performance is at risk.
Key Rules
Default clause required
The Government’s right under this section applies only when the contract contains the Default clause at FAR 52.249-8. If that clause is not in the contract, this specific default-termination authority does not apply in the same way.
Notice requirements control
Even when a default ground exists, the Government must comply with the notice requirements in the Default clause before terminating. This means the contracting officer must follow the clause’s procedural protections and cannot skip required notices.
Late delivery or performance
A contractor may be terminated for default if it fails to deliver supplies or perform services within the time specified in the contract. Timeliness is a core contractual obligation, and missing the required delivery or performance date can trigger default action.
Other contract breaches
Default is also available if the contractor fails to perform any other provision of the contract. This covers more than schedule failures and includes other material contractual obligations the contractor must satisfy.
Failure to make progress
The Government may terminate for default if the contractor fails to make progress and that failure endangers performance of the contract. This allows the Government to act before the final delivery date when the contractor’s performance trend shows the contract is at risk.
Complete or partial termination
The Government may terminate the contract completely or only in part. Partial termination allows the Government to limit the default action to the affected portion of the work when that is appropriate.
Responsibilities
Contracting Officer
Determine whether the Default clause applies, document the contractor’s failure, and follow the notice requirements in the clause before issuing a complete or partial termination for default. The contracting officer must assess whether the facts fit one of the three default grounds and whether termination is the proper remedy.
Contractor
Meet delivery and performance deadlines, comply with all contract provisions, and maintain sufficient progress to ensure successful completion. If performance problems arise, the contractor must respond promptly because failure to cure or recover can lead to default termination.
Agency
Use default termination authority only when supported by the contract and the facts, and ensure the action is consistent with procurement policy and the Government’s need to protect schedule, cost, and mission objectives.
Practical Implications
This section is the starting point for any default-termination analysis, so the first question is always whether FAR 52.249-8 is in the contract and whether the facts fit one of the listed grounds.
Contractors should treat schedule slippage, missed milestones, and unresolved compliance issues as serious warning signs, because default can be based not only on final failure but also on inadequate progress that threatens completion.
Contracting officers must build a clear record showing the specific failure and the basis for concluding that performance is endangered or otherwise noncompliant; weak documentation can undermine the termination.
A common pitfall is treating every performance problem as an immediate default issue; the Government still must follow the clause’s notice process and evaluate whether termination is justified under the circumstances.
Partial default termination can be a practical option when only part of the work is affected, but it still requires careful analysis of scope, contract language, and the impact on remaining performance.
Official Regulatory Text
Under contracts containing the Default clause at 52.249-8 , the Government has the right, subject to the notice requirements of the clause, to terminate the contract completely or partially for default if the contractor fails to- (a) Make delivery of the supplies or perform the services within the time specified in the contract, (b) Perform any other provision of the contract, or (c) Make progress and that failure endangers performance of the contract.