Q. How does FTA get involved in termination actions?
A. FTA Circular 4220.1F requires that all contracts and subcontracts contain contractual provisions or conditions that allow for “Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be effected and the basis for settlement (all contracts in excess of $10,000).” Frequently terminations occur because of problems in contract performance. Section 54 of the FTA Master Agreement, entitled “Disputes, Breaches, Defaults or Other Litigation” provides the following:
(Revised: May 2010)
Q. When mass public contracts need to be terminated due to lack of funding, what are the required steps and the recommended steps?
A. The contract should have a Termination for Convenience clause, which is required for all FTA funded contracts over $10,000. The clause will state the sequence of events and the basis for compensating the contractor for partially finished work. Anticipatory profits on unfinished work are not allowed. You may want to read the coverage of contract terminations for convenience in the Federal Acquisition Regulation (FAR). The FAR will give you guidance on the steps taken on a federal government contract when it is terminated for convenience. (Posted: June 2010)
Q. This question has to do with the area of "Termination for cause and termination for convenience provisions in contracts exceeding $10,000. We are a Transit Management non-profit organization that provides services to governmental jurisdictions that receive sub-recipient FTA monies through the recipient, the Maryland Transit Administration. Our question is there anything that precludes us to have the ability to terminate a contractor/vendor without giving a window? Can we terminate without cause with no notice?
A. Federal Government contract clauses for the Convenience of the Government do not have a requirement that the Government provide advance notice to the contractor when the Government decides to terminate for convenience. See FAR clause 52-249-2, "Termination for Convenience of the Government," at https://www.acquisition.gov/far/current/html/52_248_253.html#wp1119604. FTA does not require recipients or sub-recipients to impose an advance notification requirement on themselves when they determine that a convenience termination is necessary. (Posted: January, 2013)