The contracting officer has several remedies available to address supplies or services that do not conform to contract requirements. The contracting officer will rely heavily on the COR’s observations and documentation on supplies or services that do not conform to contract requirements. When unsatisfactory contract performance is identified, the COR should notify the contracting officer so remedial steps can be taken. The contractor should interpret the Government's silence as acceptance of substandard supplies or services. Such situations could adversely affect the Government’s right to withhold payments, terminate for cause or default, or otherwise exercise certain rights under the contract.
Depending on an evaluation of the seriousness of the unsatisfactory performance, the contracting officer may perform the following:
- Send a letter or hold a meeting to bring the particular deficiency to the attention of the contractor and obtain a commitment for the appropriate corrective action.
- Extend the contract schedule if excusable delays in performance are involved (e.g., combat situations or extreme weather conditions).
- Withhold contract payments if the contractor fails to comply with delivery or reporting provisions of the contract.
- Terminate the contract for cause or default.
After a complete review of the situation, the contracting officer may send an official notice of failure of performance to the contractor. This notice requires the contractor to inform the contracting officer of the cause of the delinquency so that a proper determination can be made about continuing or terminating the contract. In some cases, liquidated damages can be assessed against the contractor performing the service. Liquidated damages are amounts agreed to in advance that reflect the financial damage that the Government might incur if the contract is not completed on time.
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Note: COR records are vital for determining the amount of money that the contractor may be entitled to if a suspension is determined to be unreasonable.
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