Essential element in the standard default clause

The FAR and Contract Provisions for Protection Importance of the Standard Default Clause. Every government contract comes with clauses designed to safeguard both the interests of the government and the contractor. These clauses in a commercial agreement are an indication of the terms, conditions, and commitments that each party to the deal should uphold. According to the terms, the contractor must operate during the duration of the contract. A contractor’s interaction with the government is also included in the restrictions, though. In light of this, contractors who are new to the world of government contracting and who lack an understanding or precise awareness of the provisions in government contracting are envisaged to acquaint themselves with them in order to make sure that they avoid disputes of any sorts (Feldman, 2014).

Keeping the tax payers’ interest in mind, encouraging competition, as well as facilitating the advancement of socio-economic objectives and goals, government contracts are controlled by many rules and regulations. As a result, the government contracts’ clauses give the government the mandate of changing or terminating contracts. Therefore, the default clause which can be considered as an equivalent of the Termination of Default gives the government the right of contract termination for the untimely or failure of product delivery or service performance, unsatisfactory making of progress, or failure of performing any of the contract provisions. However, upon termination of a contract, notification to the contractor must be done by the contracting officer in writing (Federal Acquisition Review (FAR), n.d.).

Upon review of the Federal Acquisition Requirements that appertains to the Contractor Inspection Requirements, it can be clearly noted that the default clause plays an imperative role in giving the contract a myriad of potential ways through which any issue can be solved before any decision to terminate the contract for default is arrived at (Federal Acquisition Review (FAR), n.d.). This is mainly because there is an option for the contractor to correct or substitute any defective supplies within a stipulated period that is already negotiated for delivery, which means that the contracting officer is able to make any adjustments that may seem reasonable within the terms of the contract. Also, due to the ability of the Government towards performing inspection of products as well as testing of supplies before they are delivered which in turn allows them to either volunteer feedback and/or input to contracting organizations, as far as any unjustifiable delays of production are not required (Federal Acquisition Review (FAR), n.d.).

When combining the default clauses towards protection of both parties with regards to default and/or delay, the Government has the potential of offering solutions that the law provides, or under other contract provisions, and provided there is correction or replacement of the nonconforming or defective supplies by the contractor (Federal Acquisition Review (FAR), n.d.). The standard default clause is imperative in excusing the ability of the contractor to perform if the default was caused by a natural act including floods, fires, as well as other unusual weather conditions. Under the standard default clause, the government is entitled to undertake a re-procurement of services and/or the supplies needed under contract terms as well as charging the contractor extra payments.

A combination of default and delay clause, the contractor is accorded an opportunity of replacing the defective or nonconforming supplies. Therefore, once a written notice is received by the contractor concerning the defective supplies, the contractor is within 10 days supposed to replace such items failure to which the government is entitled to terminate parts or the entire contract either reducing or revoking negotiated price of payment. Thus, the contracting officer is authorized to make contractual changes as long as the effected changes are contained within the contract’s provisions (Federal Acquisition Review (FAR), n.d.). This means under the delay and standard default clause material and time and labor hour contracts, the contracting officer is envisaged to make contractual changes to the final cost of the contract. When these changes are being submitted, the contracting officer must ensure that there is inclusion of agreed supplementation to show the adjusted terms of the contract with regards to the pricing as well as the delivery schedule (Feldman, 2014).

Contracting Officer’s Changes to the Payment Terms

It is undoubtedly clear that a contract’s terms of payment can be changed by the contracting officer, particularly under the standards default clause. For instance, change orders are considered to be work in the contract’s scope which has already been changed. This means that the work can either be taken away from or added to the contract, which indicate that change orders have implications to the final cost of the contract as well as its terms and conditions.

A change order is the most secure method through which the government can make contractual changes. This is attributable to the fact that, a change order is undoubtedly the most effective and legal way appropriate for making changes with regards to the scope of the contract. The reason why this method is highly effective for adoption by the contracting officer is because; the contractor and the contracting office must agree in order to make the contractual changes effective (Feldman, 2014). However, upon the issuance of a change of order, the contractor must be allowed to proceed under similar performance capacity as stipulated in the initial agreement of the contract, with exception of when cost-reimbursement is involved in the contract or a contract that is funded incrementally. However, if one of these exceptions applies to the contract, the contractor would not be envisaged to ensure maintenance of performance or sustenance of additional costs past the limits outlined under the clause of the Limitation of Funds.

Majority of change orders are partially attributed to the ever evolving needs of governments from time to time, and this is the reason why clauses that are contained within the contract agreement that authorize the contracting officer to change contract specifications and terms. However, the government cannot use change orders in order to change the contract’s characteristics but, only in supplementing necessary changes. In addition, a contractor has the right of receiving an equitable price adjustment accordingly as well as delivery schedule in case contract changes are ordered (Feldman, 2014).

Contracting Officer’s Improvements to Inspection Procedures

Improvements to inspection procedures can be executed by a contracting officer, because the ability the Government is entitled towards performing inspection of products as well as testing of supplies before they are delivered which in turn allows them to either volunteer feedback and/or input to contracting organizations, as far as any unjustifiable delays of production are not required (Feldman, 2014). This is imperative because it allows the examination and checking of items that are delivered by contractors in order to verify their conformity to contract requirements and specifications. The FAR suggests that inspection is the primary method to ensure quality of delivered supplies. The Standard Inspection Clause plays an important role of ensuring that that an acceptable inspection system is maintained, and that is recognized by the government, which will cover the service and supplies under the contract (Federal Acquisition Review (FAR), n.d). The two inspection procedures that I would focus on from the contract’s onset include: process review and product examination. These processes are vital in ensuring that supplies and products are monitored from the onset of the contract, rather than the process that take the initiation in course of the production process, which may lead to some services and products failing to meet the contract requirements and specifications (Feldman, 2014).

References

Contract Responsibilities. (n.d.). Retrieved from http://www.sba.gov/content/contract-responsibilities#Termination

Federal Acquisition Review (FAR), (n.d.). 52.246-1 Contractor Inspection Requirements. Retrieved from http://www.acquisition.gov/far/html/52_246.html

Feldman, S. W. (2014). 18:2 Government Inspection Rights. In Government Contract Guidebook (4th ed.). pp. 592-594. Washington, D.C: Thomson Reuters, Westlaw.