FAR 52.249-9—Default (Fixed-Price Research and Development).
Plain-English Summary
FAR 52.249-9, Default (Fixed-Price Research and Development), sets out the Government’s right to terminate a fixed-price R&D contract for default and the contractor’s protections if the failure to perform is excusable. It covers the grounds for default termination, including failure to meet the required time, failure to prosecute the work so performance is endangered, and failure to perform other contract provisions; the cure notice process for certain failures; the Government’s right to acquire replacement work and charge excess reprocurement costs; excusable causes beyond the contractor’s control; special treatment of subcontractor defaults; the contractor’s duties to transfer title, deliver work and property, and preserve Government interests after termination; payment rules for accepted and partially completed work and preservation efforts; conversion of a default termination to a convenience termination if the default is later found not to exist or to be excusable; and the clause’s statement that these remedies are cumulative with other legal and contractual remedies. In practice, this clause is the Government’s primary enforcement tool for serious performance failures in fixed-price R&D contracts, but it also requires careful documentation, notice, and causation analysis before default is imposed. For contractors, the clause highlights the importance of schedule management, prompt response to cure notices, subcontract oversight, and preserving evidence of excusable delay. For contracting officers, it requires disciplined use of notices, careful assessment of whether the failure is truly within the contractor’s control, and proper handling of post-termination property and payment issues.
Key Rules
Default termination grounds
The Government may terminate the contract in whole or in part if the contractor fails to perform on time, fails to prosecute the work so performance is endangered, or fails to perform other contract provisions. The Government must still comply with the notice and excusable-delay protections in paragraphs (c) and (d).
Cure notice for certain failures
For failures to prosecute the work or perform other provisions, the Government must give the contractor written notice identifying the failure and allow 10 days, or a longer period if the Contracting Officer authorizes it in writing, to cure before terminating for default. This cure opportunity does not apply to every type of failure, especially simple failure to meet the time specified.
Excess reprocurement costs
If the Government terminates for default, it may acquire similar work by whatever terms and methods the Contracting Officer considers appropriate, and the contractor is liable for any excess costs of that replacement work. The contractor remains responsible for the portion of the contract not terminated.
Excusable causes beyond control
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, such as acts of God, Government acts, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather. The contractor must show both lack of control and lack of fault or negligence.
Subcontractor default protection
If a subcontractor at any tier defaults for a cause beyond the control and without the fault or negligence of both the contractor and subcontractor, the contractor is not liable for excess costs unless the needed supplies or services could have been obtained from other sources in time to meet the schedule or performance requirements. This rule places a duty on the prime contractor to consider alternate sourcing when feasible.
Transfer and preservation of property
After a default termination, the Government may require the contractor to transfer title and deliver completed or partially completed work and other property specifically produced or acquired for the terminated portion, including contract rights. The contractor must also protect and preserve Government-interested property in its possession when directed.
Payment after termination
The Government must pay for accepted completed work at the contract price if separately stated, or at an agreed amount for completed work without a separate price, partially completed work, accepted property, and preservation/protection services. If the parties cannot agree on amounts, the dispute is resolved under the Disputes clause, and the Government may withhold funds to protect against liens or claims.
Conversion to convenience termination
If it is later determined that the contractor was not in default, or that the default was excusable, the termination is treated as a termination for convenience. This protects the contractor from default consequences when the Government’s default decision is not sustained.
Cumulative remedies
The Government’s rights and remedies under this clause are in addition to any other rights and remedies available by law or under the contract. This means default termination does not limit other legal or contractual remedies unless another provision says otherwise.
Responsibilities
Contracting Officer
Issue written default notices and cure notices when required, decide whether to allow additional cure time, determine whether a failure is excusable, decide whether to terminate in whole or in part, select the method for acquiring replacement work, determine excess costs, direct transfer of title and delivery of property, authorize preservation actions, and withhold funds when needed to protect against liens or claims.
Contractor
Perform on time, prosecute the work diligently, comply with all contract provisions, respond promptly to cure notices, document and notify the Government of excusable causes, continue performance of any non-terminated work, transfer title and deliver required work and property after termination, and protect and preserve Government-interested property when directed.
Subcontractors
Perform their subcontracted work in accordance with their agreements and avoid causing delays or failures that could affect the prime contract. Their defaults may be excusable only if the underlying cause is beyond their control and without their fault or negligence, and the prime contractor must still assess whether alternate sources were available in time.
Government
If it terminates for default, acquire replacement work as appropriate, pay for accepted or agreed amounts due after termination, and convert the termination to convenience if the default is later found not to exist or to be excusable. The Government must also respect the contractor’s excusable-delay protections and dispute procedures.
Practical Implications
Default termination is a serious remedy, so both sides should build a strong record: schedule status, correspondence, cure notices, delay causes, mitigation efforts, and subcontractor issues often determine the outcome.
Contractors should treat a cure notice as an urgent warning, not a routine letter; failure to respond with a credible recovery plan can quickly lead to termination for default.
Excusable delay is not automatic just because an event occurred; the contractor must show the event was beyond its control and without fault or negligence, and that it actually caused the failure to perform.
For subcontractor problems, the prime contractor should document efforts to find alternate sources, because the clause can still impose liability if replacement sources were available in time.
After termination, property handling and payment issues can become contentious, so contractors should preserve records of completed work, partial work, inventory, title status, and preservation costs to support any settlement or dispute.
Official Regulatory Text
As prescribed in 49.504 (b) , insert the following clause: Default (Fixed-Price Research and Development) (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) Perform the work under the contract within the time specified in this contract or any extension; (ii) Prosecute the work 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. (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, work similar to the work terminated, and the Contractor will be liable to the Government for any excess costs for the similar work. 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 or other performance requirements. (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 or partially completed work not previously delivered to, and accepted by, the Government and (2) other property, including contract rights, 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 the contract price, if separately stated, for completed work it has accepted and the amount agreed upon by the Contractor and the Contracting Officer for (1) completed work for which no separate price is stated, (2) partially completed work, (3) other property described above that it accepts, and (4) 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 from 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)