D.C. Mun. Regs. tit. 27, r. 27-3710

Current through Register Vol. 71, No. 49, December 6, 2024

Rule 27-3710 - TERMINATION FOR DEFAULT

3710.1

Under a termination for default, the District shall not be liable for the contractor's costs on undelivered work, and shall be entitled to the repayment of advance or progress payments, if any, applicable to that work.

3710.2

The default clause approved by the Director shall include a statement that the contracting officer may require the contractor to transfer title and deliver to the District completed goods. However, the contracting officer shall not use the default clause as authority to acquire any completed goods unless it has been ascertained that the District does not already have title under some other provision of the contract.

3710.3

Subject to the provisions of §§ 3710.4, 3710.5, and 3710.6, the District shall pay to the contractor the contract price for any completed goods and the amount agreed upon by the contracting officer and contractor for any manufacturing materials acquired by the District under the default clause approved by the Director.

3710.4

Before payment is made for completed or delivered goods, services, or materials, the contracting officer shall take one (1) or more of the following measures to protect the District from potential liability to laborers and material suppliers:

(a) Ascertain whether the payment bonds, if any, furnished by the contractor are adequate to satisfy all lienors' claims or whether it is feasible to obtain similar bonds to cover outstanding liens;

(b) Require the contractor to furnish appropriate statements from laborers and material suppliers disclaiming any lien rights they may have to the goods and materials;

(c) Obtain appropriate agreement among the District, the contractor, and lienors ensuring release of the District from any potential liability to the contractor or lienors;

(d) Withhold from the amount due for services, goods, or materials any amount the contracting officer determines necessary to protect the District's interests, but only if the measures set forth in §§ 3710.4(a) -(c) cannot be accomplished or are inadequate; and

(e) Take other appropriate action considering the circumstances and the degree of the contractors's solvency.

3710.5

The contractor shall be liable to the District for any excess costs incurred in reprocuring goods or materials similar to those to be obtained under the contract terminated for default and for any other damages, whether or not repurchase is effected.

3710.6

If a contract is terminated for default or if a course of action instead of termination for default is followed under § 3714, the contracting officer shall promptly ascertain and make demand for any liquidated damages to which the District is entitled under the contract. The contract clause for liquidated damages shall be approved by the Director and shall specify that these damages are in addition to any excess repurchase costs.

D.C. Mun. Regs. tit. 27, r. 27-3710

Final Rulemaking publishing at 35 DCR 1698 (February 26, 1988)