Termination for Default (T4D)

The Government’s contractual right to terminate a contract, in whole or in part, because a contractor has failed to perform its contractual obligations or has demonstrated that it is unlikely to do so. Common grounds for termination include failure to deliver on time, failure to make sufficient progress, or failure to comply with other material contract requirements. A Termination for Default is a serious contractual remedy that may expose the contractor to liability for excess reprocurement costs, negative past performance evaluations, and potential suspension or debarment. Contractors should understand the conditions that may lead to a default termination and take prompt corrective action when performance issues arise to minimise contractual and commercial risk.