The most serious issue in the Government Contracts world is the looming “sequestration” — the process of automatic spending cuts that will hit most Federal agencies and programs, unless Congress passes a bill containing at least $1.2 trillion in deficit reduction or amends the Balanced Budget and Emergency Deficit Control Act of 1985 before then.
Even if sequestration is somehow averted, however, there can be little doubt that FY 2013 will see a widespread series of particularly severe cuts in federal contracting. Besides delaying procurements and deciding not to exercise contract options, federal agencies are likely to reduce the dollars — whether in scope or quantities — under existing contracts.
Whether full terminations, partial terminations, or deductive changes offer the better route for the Government to minimize the adverse impact of the impending cuts is the question everyone is asking, and, indeed, the BCAs and courts have not even settled upon a firm standard for distinguishing between them. Since the different recovery rules governing each type of work deletion determine how the contract price will be adjusted to account for the deleted items and which costs will be allowed, a contractor’s knowledge of this area of law can directly affect its bottom line.
This course consists of an in-depth look at contractual requirements and procedures related to preparation of full and partial termination for convenience cost proposals, and related equitable adjustments. The primary focus is on issues of quantum and cost. Strategies for preparing and supporting cost settlement proposals that optimize the position of the terminated party, and for managing the termination process, are emphasized. The course is recommended for persons responsible for dealing with US government termination personnel, preparing input or information used in the termination cost proposal preparation and settlement process, or handling corresponding terminations of lower-tier subcontractors.
Learning Objectives
Upon completion of this course the student should know
- The purpose and procedures involved in the government’s termination process
- Key players and their roles in the termination process
- Actions required upon receipt of the notice to terminate
- Pros and cons of various types of termination settlement proposals
- Methods for identifying, accounting and disposing of termination inventory
- How to handle subcontract/vendor terminations
- Profit/fee considerations
- Elements and accounting methods related to settlement methods
- How to prepare and submit a termination settlement proposals
- How to prepare and deal with the government’s audits
- Settlement Methods
- Payment procedures/options
- Additional considerations in partial terminations including related requests for equitable adjustments on the continuing portion of the work
- Strategies for optimizing the impact of contract terminations for convenience & managing the termination process
