B-231345, Jun 29, 1988, Office of General Counsel

B-231345, Jun 29, 1988, Office of General Counsel

PROCUREMENT - Contract Management - Contract administration - Convenience termination - Federal procurement regulations/laws - Notification procedures DIGEST: The Army's failure to obtain Department of Defense clearance to release information regarding the termination of a contract prior to issuing notice of the termination as required by Department of Defense Federal Acquisition Regulation Supplement Sec. 48.7002 does not invalidate the termination. The regulation pertains to the release of information concerning the termination and does not effect the validity of the termination decision.

The Honorable Henry B. Gonzalez

House of Representatives:

This is in reply to your inquiry dated April 22, 1888, on behalf of Texas Mil-Tronics Corporation concerning the Army's termination of its contract to produce aerial cargo slings. Department of Defense (DOD) Federal Acquisition Regulation Supplement (DFARS) Sec. 49.7002 requires a DOD contracting agency to obtain clearance to release information regarding a contract termination prior to issuing the actual notice of the termination to the contractor. The Army did not obtain such a clearance before terminating Texas Mil-Tronics' contract. You asked our opinion as to whether such failure would invalidate the termination and ask generally what types of errors could impact on the termination.

In our view, the Army's error was simply procedural. The regulation concerns the effect of the release of information concerning a contract termination on the employment area within which the contractor is located. It does not concern the validity of the underlying termination.

In general, procedural violations which concern peripheral issues such as the release of information to those other than the parties to the termination do not affect the termination. On the otherhand, procedural matters which concern the legal rights of the parties may affect the validity of the termination. For example, the failure of the contracting agency to properly inform the contractor of the final termination action can affect the contractor's appeal rights, Kisco Co. Inc. v. United States, 610 F.2d 742 (Ct. Cl. 1979), or the failure to supply the required notices prior to the termination can deprive the contractor of the opportunity to remedy the defect and avoid the termination. Federal Acquisition Regulation Sec. 49.402-3(d). The failure to comply with these procedural requirements may indeed affect the validity of the termination action.

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