FAR 52.249-8—Default (Fixed-Price Supply and Service).
Plain-English Summary
FAR 52.249-8, Default (Fixed-Price Supply and Service), is the Government’s standard default clause for fixed-price supply and service contracts, including a transportation-related alternate. It explains when the Government may terminate a contract for default, including failure to deliver or perform on time, failure to make progress, and failure to comply with other contract terms. It also sets out the contractor’s right to a cure period for certain failures, the Government’s right to buy replacement supplies or services and recover excess reprocurement costs, and the contractor’s protection when the failure is excusable because of causes beyond its control and without its fault or negligence. The clause further addresses subcontractor-caused failures, the Government’s rights to completed and partially completed supplies and manufacturing materials after default termination, payment rules for accepted work and preserved property, and the conversion of an improper default termination into a termination for convenience. The transportation-services alternate modifies the basic clause by changing delivery language to pickup/delivery services and replacing the property-handling and payment provisions with a rule for Government goods in the contractor’s possession. In practice, this clause is central to schedule enforcement, cure notices, excusable delay analysis, default termination decisions, and post-termination settlement.
Key Rules
Default termination triggers
The Government may terminate for default if the contractor fails to deliver or perform on time, fails to make progress so as to endanger performance, or fails to perform other contract provisions. The termination may be for the whole contract or only part of it, but it must be done by written notice and is subject to the excusable-delay protections in the clause.
Cure notice for progress failures
For failures to make progress or perform other provisions, the Government generally must give the contractor notice of the failure and allow 10 days, or a longer period if the Contracting Officer authorizes it in writing, to cure the problem. This cure opportunity does not apply to every late-delivery situation, but it is a key procedural safeguard before default based on noncompliance or endangered performance.
Government reprocurement and excess costs
If the Government terminates for default, it may acquire similar supplies or services by whatever terms and method the Contracting Officer considers appropriate. The contractor is liable for excess costs the Government incurs in obtaining replacement performance, and the contractor must continue work that was not terminated.
Excusable causes protect the contractor
The contractor is not liable for excess costs if the failure to perform was caused by events beyond its control and without its fault or negligence. The clause lists examples such as acts of God, government acts, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather, but the key test is whether the cause was truly beyond control and without fault or negligence.
Subcontractor default rules
A contractor is generally not liable for excess costs caused by a subcontractor’s default if the subcontractor’s failure was also beyond the control and without the fault or negligence of both parties. However, this protection does not apply if the subcontracted supplies or services could have been obtained from other sources in time for the contractor to meet the delivery schedule.
Property transfer and preservation after default
After a default termination, the Government may require the contractor to transfer title and deliver completed supplies, partially completed supplies, and manufacturing materials specifically produced or acquired for the terminated portion. The contractor must also protect and preserve Government-interested property in its possession when directed by the Contracting Officer.
Payment and lien protection
The Government pays the contract price for completed supplies that are delivered and accepted. Payment for manufacturing materials and preservation/protection work is determined by agreement, and disputes go to the Disputes clause; the Government may withhold amounts needed to protect against liens or claims of former lienholders.
Wrongful default converts to convenience
If it is later determined that the contractor was not in default, or that the default was excusable, the termination is treated as if it had been a termination for convenience. This protects the contractor from the harsher consequences of an improper default action.
Government remedies are cumulative
The Government’s rights under this clause are in addition to any other rights and remedies available by law or under the contract. This means default termination and excess-cost recovery do not eliminate other legal or contractual remedies unless another rule limits them.
Transportation alternate changes the clause
For transportation or transportation-related services, Alternate I replaces delivery language with pickup and delivery-service language and removes the basic clause’s payment-for-manufacturing-materials paragraph. It also substitutes a special rule for Government goods in the contractor’s possession, requiring protection and preservation until surrender and making payment for that work a matter for agreement or dispute.
Responsibilities
Contracting Officer
Monitor performance, determine whether a failure justifies default, issue written default or cure notices, authorize any longer cure period in writing, decide whether to reprocure and how to do so, determine excess costs, direct transfer or preservation of property, and withhold amounts needed to protect the Government from liens or claims.
Contractor
Deliver supplies or perform services on time, make progress, comply with all contract requirements, respond to cure notices, continue performance of unaffected work after partial termination, prove excusable causes when asserting them, and after default comply with directions to transfer title, deliver property, or preserve Government-interested property.
Subcontractor
Perform its subcontract work in a manner that does not jeopardize the prime contract; if a subcontractor default occurs, the prime contractor must assess whether replacement sources are available in time and whether the subcontractor’s failure was beyond both parties’ control.
Government
If default is warranted, may terminate in whole or in part, acquire replacement performance, and seek excess costs; if the termination is later found improper or excusable, treat the action as a convenience termination and settle accordingly.
Disputes process
Resolve disagreements over payment for manufacturing materials, preservation/protection work, and related amounts under the Disputes clause when the contractor and Contracting Officer cannot agree.
Practical Implications
This clause is one of the main tools for schedule enforcement in fixed-price supply and service contracts, so contractors should treat missed milestones, slow progress, and contract noncompliance as potential default risks early.
A cure notice is not just paperwork; it is often the contractor’s best chance to explain the problem, show recovery actions, or document excusable delay before the Government terminates.
Excusable delay is narrowly applied in practice. Contractors should keep contemporaneous records showing the cause, the impact on performance, mitigation efforts, and why the event was beyond their control and without fault or negligence.
After a default termination, the contractor may still have immediate obligations to protect property, transfer title, and continue non-terminated work, so teams should not assume all performance duties stop at termination.
For transportation-related contracts, the alternate clause changes the property and payment mechanics, so parties should verify whether Alternate I applies and adjust their default-response procedures accordingly.
Official Regulatory Text
As prescribed in 49.504 (a)(1) , insert the following clause: Default (Fixed-Price Supply and Service) (Apr 1984) (a) (1) The Government may, subject to paragraphs (c) and (d) of this clause, by written notice of default to the Contractor, terminate this contract in whole or in part if the Contractor fails to- (i) Deliver the supplies or to perform the services within the time specified in this contract or any extension; (ii) Make progress, so as to endanger performance of this contract (but see paragraph (a)(2) of this clause); or (iii) Perform any of the other provisions of this contract (but see paragraph (a)(2) of this clause). (2) The Government’s right to terminate this contract under subdivisions (a)(1)(ii) and (1)(iii) of this clause, may be exercised if the Contractor does not cure such failure within 10 days (or more if authorized in writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure. (b) If the Government terminates this contract in whole or in part, it may acquire, under the terms and in the manner the Contracting Officer considers appropriate, supplies or services similar to those terminated, and the Contractor will be liable to the Government for any excess costs for those supplies or services. However, the Contractor shall continue the work not terminated. (c) Except for defaults of subcontractors at any tier, the Contractor shall not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of such causes include (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance the failure to perform must be beyond the control and without the fault or negligence of the Contractor. (d) If the failure to perform is caused by the default of a subcontractor at any tier, and if the cause of the default is beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be liable for any excess costs for failure to perform, unless the subcontracted supplies or services were obtainable from other sources in sufficient time for the Contractor to meet the required delivery schedule. (e) If this contract is terminated for default, the Government may require the Contractor to transfer title and deliver to the Government, as directed by the Contracting Officer, any (1) completed supplies, and (2) partially completed supplies and materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights (collectively referred to as "manufacturing materials" in this clause) that the Contractor has specifically produced or acquired for the terminated portion of this contract. Upon direction of the Contracting Officer, the Contractor shall also protect and preserve property in its possession in which the Government has an interest. (f) The Government shall pay contract price for completed supplies delivered and accepted. The Contractor and Contracting Officer shall agree on the amount of payment for manufacturing materials delivered and accepted and for the protection and preservation of the property. Failure to agree will be a dispute under the Disputes clause. The Government may withhold from these amounts any sum the Contracting Officer determines to be necessary to protect the Government against loss because of outstanding liens or claims of former lien holders. (g) If, after termination, it is determined that the Contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the Government. (h) The rights and remedies of the Government in this clause are in addition to any other rights and remedies provided by law or under this contract. (End of clause) Alternate I (Apr 1984) . If the contract is for transportation or transportation-related services, delete paragraph (f) of the basic clause, redesignate the remaining paragraphs accordingly, and substitute the following paragraphs (a) and (e) for paragraphs (a) and (e) of the basic clause: (a)(1) The Government may, subject to paragraphs (c) and (d) of this clause, by written notice of default to the Contractor, terminate this contract in whole or in part if the Contractor fails to- (i) Pick up the commodities or to perform the services, including delivery services, within the time specified in this contract or any extension; (ii) Make progress, so as to endanger performance of this contract (but see paragraph (a)(2) of this clause); or (iii) Perform any of the other provisions of this contract (but see paragraph (a)(2) of this clause). (2) The Government’s right to terminate this contract under subdivisions (a)(1)(ii) and (iii) of this clause, may be exercised if the Contractor does not cure such failure within 10 days (or more if authorized in writing by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure. (e) If this contract is terminated while the Contractor has possession of Government goods, the Contractor shall, upon direction of the Contracting Officer, protect and preserve the goods until surrendered to the Government or its agent. The Contractor and Contracting Officer shall agree on payment for the preservation and protection of goods. Failure to agree on an amount will be a dispute under the Disputes clause.