Question

What type of claims and/or equitable adjustments are agencies open to under Termination for Convenience?

Answer 1

The term termination of Convenience means to end the period of the contract before the due date. It means that the term of contract is terminated by the giver party and all the work or the performance of opposite party comes to an end before its actual period of ending.

Claims admissible by agencies under Termination For Convenience

• Recovery of profits : Where the company has earned profits after the termination of duties of the official then the official has right to claim his share of profit in the company. The contractor under fixed price contract can claim equitable adjustment claims that may increase the contract price. For this
  • the contractor has to prove that he has operated the loss
  • and the amount of loss
  • To burden of proof is not on contractor but is on government
• Payment of performance : When the official has completed his duty or was terminated in the middle then he has the right to receive the payment of his duties till the time he was working. If the payment has not been made he has the right to claim.
• Cost incurred in anticipation of benefits : Where the official have personally spend for the benefits of the company which are not yet arrived and there was termination contract serve to him in that case he has right to receive the cost incurred for those anticipations.
• Cost spend during the termination process : The termination is not just the one day work hence to completely finish is one has to spend time , money and other small investment. Where the organization wants to completely settle the termination they may provide the reimbursement of the cost incurred by the official during the procedure of settling the termination.
• Cost of common items : Generally its not allow however if contractor support the statement with evidence that the equipment were not retained until there was certain loss to the contractor.
• initial cost : The cost of not consumed as there was termination in the middle
• cost of loss of useful value : Loss of any part of machinery or tools to the extent of termination
• cost incurred after termination : The reason to believe should be that all efforts were made to overcome these cost.
• Rental cost : The contractor was not able to pay the rent due to the termination
• Settlement expenses : Discussed above
• Termination Cost : although it is not allowed but it is fair to include this cost with other cost.

The agency can terminate the officials in the following case

• Where the agency has made certain modification but the contractor is not admitting those modification
• Where the contractor is not eligible or ceases to be eligible to perform
• Where the government is of position when they do not require the services and performance of contractor
• The formal relation between agency and contractor has been disturbed or deteriorated
• Where the contract has been renew and its not in the public interest to take services from the contractor.

Hence the contractor should add all the cost incurred by him during the period of his performance whether or not the party is responsible to the cost. Moreover submitting adjustable claims one can avoid loss adjustment and the adjustment will increase the contract price.