(a) Termination for default is generally the exercise of the Government's contractual right to completely or partially terminate a contract because of the contractor's actual or anticipated failure to perform its contractual obligations.

What is the difference between termination for default and termination for cause?

A Termination for Default is the complete or partial termination of a contract because of a contractor's actual or anticipated failure to meet its contractual obligations. A Termination for Cause is the term used for a Termination for Default in a FAR PT 12 contract for the acquisition of commercial items.

What happens if you default on a government contract?

Consequences of a Termination For Default

In addition to possibly having to pay back any money earned under the contract and pay liquidated damages, a contractor could face debarment, negative past performance history ratings, and re-procurement costs.