Few letters from a contracting officer are more alarming than a cure notice, except perhaps the one that may follow it, the show-cause letter. Both are formal steps toward a possible termination for default, and both demand a careful, prompt response. Understanding what each means, and what the government is actually asking, turns panic into a plan.
The cure notice
When a contractor is failing to perform some provision of the contract other than meeting the delivery date, such as making inadequate progress, failing to provide required personnel or ignoring a quality requirement, the FAR generally requires the contracting officer to give the contractor a chance to fix the problem before terminating for default. The cure notice is that chance. It identifies the failure, states that the government considers it a condition endangering performance, and gives the contractor a period, at least ten days, to cure the condition or present a plan to do so. If the delivery date is less than ten days away, a cure notice may not be required and the government may proceed directly to a show-cause letter.
A cure notice is serious, but it is also an opening. It tells you exactly what the government believes is wrong, and it invites you to respond.
The show-cause letter
A show-cause letter is issued when the government is considering termination for default, either because a cure period passed without resolution or because a delivery date was missed outright. It states the basis for a possible default and gives the contractor a short time to show cause why the contract should not be terminated. The contractor is asked to present facts bearing on the question, including any evidence that the failure was excusable, that is, beyond the contractor’s control and without its fault or negligence. Causes such as acts of God, government-caused delays or certain supplier failures may qualify, depending on the clause and the facts.
How to respond
Respond to either notice in writing, within the time allowed, and with the care you would give a proposal. A strong response usually includes:
- An acknowledgment of the notice and a factual account of what happened, without defensiveness or blame
- Where the government’s facts are wrong or incomplete, a correction supported by documents
- Where the failure was excusable, the evidence: dates, correspondence, third-party records
- Where the failure was yours, a specific corrective plan with actions, names, dates and a realistic schedule to full performance
- A request for a meeting if the matter is complex, and a commitment to continue performing
Deliver what you promise in the response. A cure plan that is not followed becomes evidence for default. Keep performing throughout, because stopping work in protest is one of the few ways to make the situation worse.
What happens next
If the response satisfies the contracting officer, the matter may end with a letter withdrawing the notice, sometimes with a modification adjusting the schedule. If it does not, the government may terminate for default, which carries consequences for the contractor: liability for the government’s excess costs of buying the work elsewhere, a negative performance record and a weaker position in future responsibility determinations. A default termination that is later found improper is converted to one for the government’s convenience, which is why the written record created during the cure and show-cause process matters so much.
Getting help and avoiding the letter
A cure or show-cause notice is a moment to involve a lawyer experienced in government contracts, and quickly; deadlines are short and the stakes are high. The better strategy is prevention. Most notices follow months of smaller signals: missed deliverables, unanswered emails, a frustrated contracting officer’s representative. Contractors who report problems early and propose fixes before being asked rarely receive these letters. When one does arrive, treat it as the formal beginning of a conversation you intend to finish well.