Procuring agencies have significant discretion when repurchasing products or services after a termination for default under a substitute contract, since the federal statutes and regulations that govern standard procurements do not strictly apply to reprocurements. As the default provision applicable to fixed-price contracts, Federal Acquisition Regulation (FAR) 49.402-6 governs most reprocurements. For commercial products or services purchased through the General Services Administration (GSA) Federal Supply Schedule (FSS) program using FAR Part 8 procedures, FAR 49.402-6 serves only as guidance unless it conflicts with specific commercial item acquisition procedures. Notably, FAR 8.406-4(a)(1) mandates compliance with FAR 12.403 for FSS commercial item acquisitions, which in turn grants the procuring agency all remedies available to commercial buyers when conducting a reprocurement. The government’s preferred remedy after a default termination under the FAR is to acquire similar items from another contractor. The government may reprocure from the next-lowest-priced, qualified offeror as long as there is an ongoing need for the products or services and only a short time has passed between the original competition and the termination. In conducting the reprocurement, the agency must still provide competition to the maximum extent practicable, and the period of performance under the reprocurement must not exceed the term remaining on the terminated contract. Furthermore, for GSA FSS reprocurements, the agency is only required to acquire items similar to those in the original solicitation, not necessarily identical.

The government has the right to terminate, in whole or in part, a government contract pursuant to the default clause when the contractor fails to perform its contractual obligations. The government may charge the defaulting contractor any excess costs it incurs in procuring replacement products or services beyond the contract price. Under Federal Acquisition Regulation (FAR) 49.402-6, the contracting officer (CO) must repurchase the same or similar products or services against the defaulted contractor’s account as soon as practicable at as reasonable a price as practicable. If the repurchase is made at a price exceeding the price of the terminated products or services, the CO must issue a written demand to the defaulting contractor for the total amount of the excess. In order to establish an excess costs of reprocurement claim, the government must demonstrate that: (1) the reprocured supplies are the same as or similar to those involved in the termination; (2) it actually incurred the excess costs; and (3) the government acted reasonably to minimize the excess costs resulting from the default termination. If the government is unable to establish these elements, it may still proceed under a breach of contract theory, but it must then carry the heavier evidentiary burden of proving actual damages rather than relying on reprocurement costs. Significantly, the government’s claim for excess costs of reprocurement is considered distinct from the government’s default termination claim, and thus, has its own six-year statute of limitations once the excess reprocurement claim accrues under the Contract Disputes Act (CDA).

As relevant to negotiated procurements, the Federal Acquisition Regulation (FAR) 15.201(f) requires agencies to make public, as soon as practicable, all information necessary for the preparation of proposals that is disclosed to one or more potential offerors. Such specific proposal preparation information disclosed to a prospective offeror must be made available to the public no later than the next general release of information. Thus, federal agencies may not provide a competitive advantage to certain offerors by furnishing them information not disclosed to all offerors. Relatedly, if a contractor can access non-public information that gives it a competitive advantage, it may be precluded from competing due to unequal access to information. The FAR requires that, when a presolicitation conference is conducted, conference materials be made available to all offerors upon request. At the same time, if a procuring agency provides all offerors with the necessary information to intelligently compete, it typically fulfills its obligation to furnish information equally. In this regard, the agency is not necessarily at fault when it fails to furnish general materials it promised to provide via a pre-designated method, unless the materials cause competitive prejudice or contain specific information essential for the preparation of proposals that is not available to all prospective offerors in the solicitation materials.