FAR 49.405—Completion by another contractor.
Plain-English Summary
FAR 49.405 addresses what happens when a defaulted or otherwise incomplete contract must be finished by someone other than the original contractor and the surety does not step in to arrange completion. It explains the contracting officer’s normal next step: obtaining completion through a new contract based on the same plans and specifications, rather than redesigning the requirement or starting over from scratch. The section also makes clear that the replacement contract may be awarded using sealed bidding or any other appropriate contracting method or procedure, giving the government flexibility to choose the most suitable acquisition approach for the circumstances. A key purpose of the rule is to protect the Government’s interest by ensuring the unfinished work is completed efficiently, consistently with the original scope, and at the lowest price reasonably obtainable. In practice, this section guides contracting officers in post-default completion actions and signals to contractors and sureties that the Government will seek economical completion of the remaining work using the original technical baseline whenever possible.
Key Rules
Surety Inaction Triggers Government Action
If the surety does not arrange for completion of the contract, the contracting officer normally takes responsibility for arranging completion. This means the Government does not wait indefinitely for the surety to act and may move forward with its own completion strategy.
New Contract Based on Original Plans
The replacement contract is to be based on the same plans and specifications as the original contract. This helps preserve the original scope and avoids changing the requirement simply because the original contractor failed to finish.
Flexible Acquisition Method
The new completion contract may be awarded through sealed bidding or any other appropriate contracting method or procedure. The contracting officer may therefore select the method that best fits the urgency, market conditions, and nature of the remaining work.
Reasonable Diligence for Lowest Price
The contracting officer must exercise reasonable diligence to obtain the lowest price available for completion. This is not a guarantee of the absolute lowest possible price, but it does require active, prudent efforts to secure the best available completion cost for the Government.
Responsibilities
Contracting Officer
Arrange completion of the unfinished work when the surety does not do so; base the new contract on the same plans and specifications; choose an appropriate contracting method or procedure; and use reasonable diligence to obtain the lowest available completion price.
Surety
If it chooses not to arrange completion, it leaves the Government to proceed with its own completion action under this section. The section does not impose an affirmative duty here, but it identifies the surety’s decision point as the trigger for Government action.
Replacement Contractor
Perform the remaining work under the new completion contract in accordance with the original plans and specifications, subject to the terms of the new award.
Agency
Support the contracting officer’s efforts to complete the work efficiently and economically, including any necessary acquisition planning, funding, and administrative support for the completion action.
Practical Implications
This section is most important after a default or abandonment situation, when the Government must quickly decide how to finish the job without losing control of scope or cost.
Contracting officers should document their efforts to obtain the lowest available price, because the standard is reasonable diligence, not merely selecting the first available source.
Using the same plans and specifications helps avoid scope creep, but the contracting officer still needs to confirm the remaining work is clearly defined and suitable for reprocurement.
A common pitfall is treating the completion effort like a brand-new requirement and unintentionally changing the scope, which can create pricing, protest, or performance problems.
Another risk is failing to consider the most appropriate acquisition method; while sealed bidding is allowed, the rule permits other methods when they better fit the circumstances of the completion action.
Official Regulatory Text
If the surety does not arrange for completion of the contract, the contracting officer normally will arrange for completion of the work by awarding a new contract based on the same plans and specifications. The new contract may be the result of sealed bidding or any other appropriate contracting method or procedure. The contracting officer shall exercise reasonable diligence to obtain the lowest price available for completion.