Terminations & Claims

If the government changed the deal, claim what you are owed.

Termination settlement proposals and requests for equitable adjustment are among the most consistently underclaimed recoveries in government contracting. We prepare them, and we have supported them through dispute and litigation.

Book a compliance review All GovCon services

12 years inside DCAA
100+ DoD contractors audited
CPA led
QuickBooks, Costpoint, SAP & NetSuite
Remote, nationwide

Most contractors recover far less than they are entitled to

When the government terminates a contract for convenience, you are generally entitled to recover the cost you incurred, the cost of settling the termination itself, and in most cases a reasonable profit on the work you actually performed. When the government changes the work, delays you, or constructively alters the requirement, a request for equitable adjustment is the mechanism for recovering the resulting cost and schedule impact.

In practice, contractors routinely leave money behind. Sometimes because they do not realize a compensable change occurred at all. More often because the claim was assembled from whatever records happened to exist rather than built to the standard a reviewer applies, and the weakly supported portions simply got questioned away.

These are cost submissions with legal consequence. The entitlement question, whether the government did something that gives rise to a recovery, is separate from the quantum question, how much that is worth. We work the quantum side with the same discipline we would bring to an audit, because that is the side that gets tested hardest.

What we prepare

Termination settlement proposals

Inventory basis or total cost basis proposals following a termination for convenience, including incurred cost, settlement expense, subcontractor settlements, and profit on work performed.

Requests for equitable adjustment

Quantification of cost and schedule impact from changes, differing site conditions, government-caused delay, and constructive changes.

Claim quantification

Where an REA is not resolved and becomes a certified claim under the Disputes clause, the cost analysis that has to withstand far more scrutiny.

Delay and disruption analysis

Cost impact of delay, acceleration, and loss of productivity, which is the most frequently disputed and most frequently underdocumented element.

Subcontractor settlements

Review and settlement of subcontractor termination claims flowing up to you, which you are responsible for settling reasonably.

Dispute and litigation support

Support to your counsel through contracting officer final decision, board proceedings, and litigation, including expert-level cost analysis.

How we work a claim

Establish the entitlement basis

What contractual event gives rise to recovery, and under which clause. Your counsel usually leads here; we make sure the cost work is built to match.

Segregate the affected cost

Ideally cost is captured in a separate charge number from the moment the event occurs. Where that did not happen, we reconstruct it defensibly.

Quantify

Incurred cost, unabsorbed overhead, settlement expense, and profit, each computed on a supportable basis rather than a global markup.

Document to audit standard

These proposals get audited. We build the support package alongside the number, not afterward.

Support negotiation and beyond

Through negotiation with the contracting officer, and through dispute or litigation if it goes that far.

Questions

Frequently asked

What can we recover in a termination for convenience?

Generally the cost properly incurred on the terminated work, the cost of settling and closing out the termination including subcontractor settlements, and a reasonable profit on work actually performed. You do not recover anticipatory profit on the work you never got to do.

How long do we have to submit a settlement proposal?

The termination clause sets the period, commonly one year from the effective date of termination, and extensions can be requested. Start early regardless, because assembling the support is the slow part.

What is the difference between an REA and a claim?

An REA is a request to negotiate an adjustment. A claim is a formal demand under the Disputes clause, which above the certification threshold must be certified and which starts the contracting officer decision clock and interest. Many matters begin as an REA and become a claim only if negotiation fails.

We did not track the extra work separately. Is it hopeless?

No, but it is harder and the recovery is usually smaller. Reconstruction is accepted, but it is tested more aggressively than contemporaneous records. If you are in the middle of a changed condition right now, open a separate charge number today.

Do we need a lawyer?

For entitlement and for anything heading toward a certified claim or dispute, yes, and we work alongside counsel routinely. The cost quantification and audit defense is the part we own.

Will our proposal be audited?

Termination settlement proposals and significant REAs are commonly audited. Building the support package to that standard from the start is the difference between a negotiation and a fight.