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Nearly every government contract has a clause that allows the government to terminate the contract, or a portion of the contract, for convenience (i.e., when the government has determined that it no longer needs the goods or services). After a termination for convenience, you and the government need to settle what you are still owed under the contract. This typically occurs through a negotiated agreement, where you submit a settlement proposal the government can either accept, counter, or deny. Understanding what you are entitled to recover is crucial in putting together your settlement proposal. Unfortunately, contractors often do not know what costs they are entitled to recover. As a result, they do not claim all allowable costs and accept improper disallowances by the government.
- bases and requirements for termination
- termination processes and notifications
- potential defenses and recoveries; and
- potential liabilities.