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Most government contracts include a clause giving the government the right to terminate the contract, or any part thereof, for its sole convenience “when it is in the best interests of the government.” FAR Parts 49, 12, 13, and 31 establish the regulatory requirements for termination and settlement of government contracts. The mechanics are specific. Upon receipt of the notice of termination, the prime contractor should immediately stop all work and terminate all subcontracts related to the terminated portion of the prime contract. Inventory disposal schedules must be ...

OTA Overview

The Department of Defense can issue Other Transaction Agreements (“OTA”) for research, prototypes, and production. 10 U.S.C. § 2371b. Research OTAs are available for basic, applied, and advanced research projects. The DoD may also acquire prototypes using OTAs. Production OTAs are only permitted where the government has previously acquired a prototype under an earlier OTA. Additionally, the solicitation for the original prototype must have notified offerors that the government reserved the right to issue a follow-on Production OTA.

OTAs at the GAO

In a ...