Terminations in Federal Government Contracts

Paul H. Gantt, Atomic Energy Commission
James A. Cohen, Fordham University School of Law


At the outset, it should be noted, this article will reflect a noticeable general trend in the field of Federal Government contracting and procurement. There are only a handful of opinions of the Supreme Court of the United States and of the Court of Claims dealing with termination and there are only a few, but very helpful, opinions by the Comptroller General. On the other hand, there are literally hundreds of decisions of the Armed Services Board of Contract Appeals on this subject. No precise statistics are available, but the writers estimate that about 8% of all opinions issued by the ASBCA concern terminations. These decisions deal with almost every aspect of termination problems and of the applicable regulations. There is another phenomenon which can be best described by the experience of Mr. Gantt in the Department of the Interior. During his sixteen years of service with that Department, not more than five terminations for default were issued in that Department. Until Mr. Gantt negotiated complicated multi-million dollar contracts for the Bureau of Mines, the Geological Survey, and the Office of Saline Water, no contract was ever written to include a termination for convenience clause. As Chairman of the Interior Board of Contract Appeals, Mr. Gantt participated in about 300 contract appeals. Only two of those appeals concerned terminations. In one, the appeal of Foster Wheeler Corporation, the contract was terminated for default in 1953 and had been pending before the Interior Board of Contract Appeals since 1955. The appeal was disposed of in 1959, when Mr. Gantt, as hearing official at the preheating conference, dictated a tentative opinion in the record. The long pendency of this termination action shows the effect of the absence of contract administration experience in the field. It is our hope that this article may provide some guidance to both contractors and contracting officers when they are faced with a termination situation.