FAR Cure Notice and Show Cause Letter

What to do if You Receive FAR 49.607 Delinquency Notices

Cure Notice vs Letter of Concern

FAR Cure Notices and Show Cause Letters – Letter of Concern. FAR 49.607 Delinquency Notices. Attorneys Specializing in Government Contracts.

FAR 49.607 authorizes the Contracting Officer to issue two types of Delinquency Notices under U.S. Government contracts: CURE NOTICE and SHOW CAUSE LETTER. A contractor may receive one – or both – of these notices under its contract. Regardless of which notice is received, it requires IMMEDIATE action by the contractor. It is highly recommended that you consult a competent Government contract lawyer at such time. Discover how a government contracts lawyer can navigate complex regulations and protect your business interests effectively.

Cure Notice vs Letter of Concern Under the FAR:

Sometimes, the Contracting Officer will send out a “Letter of Concern” to the contractor that describes technical, cost, or schedule problems being experienced under a Federal contract, and it asks the contractor to respond to the letter with some type of corrective action plan by a certain date. Please understand this: This type of letter of concern is certainly a serious matter and requires a prompt response; however, it does not rise to the seriousness level of a Cure Notice of Show Cause Letter, which are formal legal notices under the applicable FAR clauses and a precursor to a default termination. That being said, we recommend that you retain competent counsel at this time.

Another point worth noting regarding to the Letter of Concern: The Contracting Officer may NOT use the exact terminology “Letter of Concern” in the document you receive. The letter/document may simply point out deficiencies in your contract performance and ask you to respond by a certain date (and usually the response time allowed is a very small, a matter of days). Neverthless, you should treat it as a “letter of concern” as that term is used in this article and take the actions recommended (i.e., seek a consultation with a qualified Government Contracts lawyer).

CLICK HERE: WE RECEIVED A “LETTER OF CONCERN” FROM THE GOVERNMENT to immediately contact Mr. Giancola regarding this letter (or similar type document from the Contracting Officer).

FAR Cure Notice Show Cause Letter

Jeffrey Giancola, the Principal, is a cum laude graduate of Columbia University and received his law degree from the University of Virginia. He is a member of the State of Maryland Bar and has 30 years of experience in the Government procurement field. This firm focuses exclusively on U.S. Federal Government contract matters and has a nationwide practice. We can also assist with overseas U.S. Government contracts.

5 Things that You Must Understand about FAR 49.607 Delinquency Notices:

1. All notices are sent to the contractor with proof of delivery requested. Note: In some instances, the Contracting Officer will send out a Stop-Work Order letter to the contractor concurrent with either a Cure Notice or Show Cause Letter (or Notice). See FAR subpart 42.13 for Stop-Work Orders. This creates a more complicated scenario (e.g., status of contractor employees).

2. CURE NOTICE: If a contract is to be terminated for default before the delivery date, a “Cure Notice” is required by the Default clause. Before using this notice, the Contracting Officer (CO) must be ascertain that an amount of time equal to or greater than the period of “cure” remains in the contract delivery schedule or any extension to it. If the time remaining in the contract delivery schedule is NOT sufficient to permit a realistic “cure” period of 10 days or more, the “Cure Notice” is not issued. Instead, the CO will consider issuing a Show Cause Letter immediately.

FAR Cure Notice Template:

3. The Cure Notice will conform to the following format:

“You are notified that the Government considers your ____ [it will specify the contractor’s failure or failures] a condition that is endangering performance of the contract. Therefore, unless this condition is cured within 10 days after receipt of this notice [or a longer time if the CO deems this appropriate and reasonably necessary], the Government may terminate for default under the terms and conditions of the _______ [insert clause title] clause of this contract. ” [End of notice]

CLICK HERE: WE RECEIVED A CURE NOTICE FROM THE GOVERNMENT to immediately contact Mr. Giancola regarding this Notice.

4. Show Cause Letter (or Notice): If the time remaining in the contract delivery schedule is NOT sufficient to permit a realistic “cure” period of 10 days or more, the following “Show Cause Notice” may be used. It is usually sent immediately upon expiration of the delivery period.

FAR Show Cause Letter (or Notice) Template:

“Since you have failed to ____ [insert “perform Contract No. ___ within the time required by its terms,” or “cure the conditions endangering performance under Contract No _____ as described to you in the Government’s letter of _____ (date)”], the Government is considering terminating the contract under the provisions for default of this contract. Pending a final decision in this matter, it will be necessary to determine whether your failure to perform arose from causes beyond your control and without fault or negligence on your part. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to ____ [insert the name and complete address of the contracting officer], within 10 days after receipt of this notice. Your failure to present any excuses within this time may be considered as an admission that none exist.

Your attention is invited to the respective rights of the Contractor and the Government and the liabilities that may be invoked if a decision is made to terminate for default.

Any assistance given to you on this contract or any acceptance by the Government of delinquent goods or services will be solely for the purpose of mitigating damages, and it is not the intention of the Government to condone any delinquency or to waive any rights the Government has under the contract.” [End of Letter].

CLICK HERE: WE RECEIVED A SHOW CAUSE LETTER FROM THE GOVERNMENT to immediately contact Mr. Giancola regarding this Letter.

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