Detection and Avoidance of Contractor Defaults.
ARMY PROCUREMENT RESEARCH OFFICE FORT LEE VA
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The Default clause provides the Government with the right to terminate a contract upon the occurrence of a performance failure. However, this right may be sacrificed if contracting officers do not have adequate visibility of contractor performance. The objectives of this study were to 1 identify advance indicators of unpending defaults, and 2 develop an improved methodology for default detection based on the systematic use of such indicators. The approach employed to achieve these objectives was to 1 review applicable legal and regulatory material 2 analyze a broad sample of recent termination actions and 3 interview individuals in both the contracting and legal fields. Advance indicators of contractor default are manifest in many forms. Such indicators can be categorized and incorporated into a system level model of the performance management process. Use of this model will enhance the contracting officers ability to pursue and sustain a default termination in a more effective and timely manner.
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