Termination for Default
Also known as: T for D, T4D, default termination
What you do here: Answer a cure/show-cause notice fast, fix the failure, and challenge an unjustified default
At a Glance
- Who invokes it
- The government, for the contractor's failure to perform
- What it does
- Ends the contract for cause — late delivery, no progress, or breach of terms
- Governing authority
- FAR Part 49; the Default clause, e.g. FAR 52.249-8
- Consequences
- Liability for excess reprocurement costs; serious CPARS/past-performance and responsibility harm
- Your action
- Respond to the cure/show-cause notice immediately; cure or challenge the default
What It Is
Termination for default (T4D) is the government's right to end a contract because the contractor failed to perform — it didn't deliver the supplies or complete the services on time, failed to make progress endangering performance, or failed to perform some other material provision. Governed by FAR Part 49 and the Default clause (FAR 52.249-8 for fixed-price supply and service contracts, with variants), it is the most serious action the government can take against a performing contractor. Usually the contracting officer must first give a warning — a cure notice (giving the contractor a period, often 10 days, to fix a curable failure) or a show-cause notice (asking why the contract shouldn't be terminated) — before terminating, and the government bears the burden of justifying a default. The consequences are severe: the contractor can be liable for the excess costs the government incurs reprocuring the work elsewhere, may have to return unliquidated progress payments, and — most damaging long-term — takes a serious hit to its past-performance record (a negative CPARS rating and a FAPIIS entry), which can sink future proposals and responsibility determinations. Because a wrongful default is so damaging, a contractor can challenge it: if the failure was excusable (beyond the contractor's control and without its fault) or the default was otherwise improper, it can be converted to a termination for convenience through a claim and appeal.
When You See It
- When the contractor fails to deliver or complete performance by the required date.
- When the contractor fails to make progress so as to endanger performance of the contract.
- When the contractor fails to perform another material provision and doesn't cure after notice.
- As the government's remedy for a genuine, unexcused performance failure — after a cure or show-cause notice.
Key Features
| Feature | What It Means |
|---|---|
| For contractor fault | Unlike a convenience termination, a default terminates the contract because the contractor failed to perform a material obligation. |
| Cure/show-cause first | The government normally issues a cure notice (time to fix a curable failure) or a show-cause notice before terminating for default. |
| Excess reprocurement costs | A defaulted contractor can be liable for the extra cost the government pays to have the work completed by someone else. |
| Severe past-performance harm | A default produces a negative CPARS rating and a FAPIIS entry that can sink future proposals and responsibility determinations. |
| Can be challenged | If the failure was excusable or the default improper, the contractor can seek to convert it to a termination for convenience through a claim and appeal. |
The SDVOSB Angle
For a small SDVOSB, a termination for default is close to an extinction-level event — the reprocurement liability strains cash, and the CPARS and FAPIIS record can knock you out of contention on the very set-asides you depend on. Two disciplines matter most. First, prevention: communicate early and in writing when performance is at risk, and pursue schedule relief through an excusable-delay showing or a bilateral modification before you miss a milestone. Second, response: a cure notice is a short fuse (often 10 days) — answer it immediately, document your cure or your excusable-delay defense, and if the default is unjustified, challenge it, because a wrongful default can be converted to a termination for convenience through the disputes process. Never let a cure or show-cause notice sit.
How to Handle It
- Communicate early and in writing the moment performance is at risk — don't wait for a notice.
- Treat a cure notice as urgent: answer within the stated period (often 10 days) with your cure or excusable-delay showing.
- Document any excusable delay — causes beyond your control and without your fault (and your subs' fault).
- Where possible, negotiate schedule relief or a bilateral modification before a milestone is missed.
- If the default is unjustified, challenge it through a claim/appeal to convert it to a termination for convenience.
Watch Out For
- Ignoring or slow-walking a cure or show-cause notice — the response window is short and unforgiving.
- Failing to document excusable delay contemporaneously, losing your best defense.
- Underestimating the excess-reprocurement liability and the long-term CPARS/FAPIIS damage.
- Assuming a default is final — a wrongful default can be converted to a convenience termination on appeal.
Run the Numbers
Frequently Asked
What is a termination for default?
A termination for default is the government's right to end a contract because the contractor failed to perform — to deliver or complete on time, to make progress so as to endanger performance, or to meet another material provision. It's governed by FAR Part 49 and the Default clause (such as FAR 52.249-8). Before terminating, the contracting officer normally issues a cure or show-cause notice, and the government must justify the default. It's the most serious termination, carrying reprocurement liability and severe past-performance consequences.
What happens if my contract is terminated for default?
You can be held liable for the excess costs the government incurs to reprocure the work from another source, and you may have to repay unliquidated progress payments. Most damaging over time, a default produces a negative CPARS rating and a FAPIIS entry that competitors and contracting officers can see, hurting your future proposals and responsibility determinations. If the failure was excusable or the default was improper, you can challenge it through the disputes process and seek to convert it to a termination for convenience.
What is a cure notice and how long do I have to respond?
A cure notice is the contracting officer's written warning that a failure endangering contract performance must be corrected. Under the Default clause it typically gives you 10 days (or a longer period the CO specifies) to cure the failure before the government may terminate for default. A show-cause notice, by contrast, asks you to show why the contract shouldn't be terminated. Treat either as urgent: respond within the stated time with your corrective action or your excusable-delay defense, in writing.
Primary Sources
- FAR Subpart 49.4 — Termination for Default
- FAR 52.249-8 — Default (Fixed-Price Supply and Service)
- FAR 49.402 — Termination of fixed-price contracts for default
Plain-English reference, not legal advice. Contract modification, options, novation, and termination rules are fact-specific, and the FAR and agency supplements are amended from time to time — always read the current FAR text, follow the notice and certification timeframes in your specific contract clauses, confirm the requirements with the contracting officer, and consult qualified counsel before relying on a modification, settlement, claim, or termination position.
Change log (1)
- LaunchedPublished the federal contract modifications, options & change management reference covering how a federal contract changes after award — the bilateral supplemental agreement and the unilateral modification (FAR 43.103), the change order under the Changes clause (FAR 52.243-1), the administrative change (FAR 43.101), the equitable adjustment and the Request for Equitable Adjustment (FAR 43.204 / 43.205), the constructive change doctrine, the options to extend the term and quantity (FAR 52.217-8, 52.217-9, and the Subpart 17.2 quantity options 52.217-6/-7), the novation and change-of-name agreements (FAR Subpart 42.12), and the terminations for convenience and default (FAR Part 49 / 52.249-2 / 52.249-8) — each with an at-a-glance quick-facts card, a when-you-see-it list, a key-features table, an SDVOSB-specific angle, a how-to-handle-it checklist, watch-outs, FAQPage, Article, Dataset, and BreadcrumbList structured data, primary-source FAR citations, and cross-links into the glossary, regulation explainers, clauses, forms, contract types, protest & dispute forums, compliance deadlines, how-to guides, FAQ, and the limitations-on-subcontracting, price-to-win, size-standard, and set-aside eligibility calculators.