What a show-cause notice is, when it follows a cure notice, when it stands alone, and how to evaluate the contractor's response.
A show-cause notice is a written notice from the contracting officer telling the contractor that the government is considering terminating the contract for default, and asking the contractor to present any reasons (in writing, within a specified period) why the contract should not be terminated. FAR 49.402-3(f) describes the show-cause notice.
Where a cure notice says "fix this or we may terminate," a show-cause notice says "tell me why I should not terminate you." The burden shifts to the contractor. They need to explain why the government should keep the contract in place despite the identified failure.
The show-cause notice is not a decision to terminate. It is the step immediately before that decision. It gives the contractor one last opportunity to present facts that might change the outcome: excusable delays, government-caused problems, or a credible plan to complete performance. The CO evaluates the response, consults with legal counsel, and then makes the termination decision.
A show-cause notice is appropriate in two situations:
After a cure notice has expired and the contractor failed to cure. You issued a cure notice, gave the contractor a reasonable cure period, and they did not fix the problem. The show-cause notice is the next step in the process. It puts the contractor on final notice and gives them one more opportunity to explain.
When the delivery date has already passed and the contractor has not delivered. In this case, a cure notice is not required because the failure is not "failure to make progress" (which requires a cure notice) but rather a completed failure to deliver on time. You can go directly to show-cause. FAR 49.402-3(f) contemplates this: when the CO is considering termination for default because of the contractor's actual failure to perform or deliver, a show-cause notice should be sent.
| Situation | Show-Cause Appropriate? |
|---|---|
| Cure notice expired, contractor did not cure | Yes. This is the standard sequence: cure notice, then show-cause, then termination decision. |
| Delivery date passed, contractor did not deliver | Yes. No prior cure notice required. Show-cause can be the first formal step. |
| Contractor performance is substandard but delivery date has not passed | No. Issue a cure notice first. Show-cause comes after the cure period expires if the contractor did not cure. |
| Contractor partially cured but problem persists | Judgment call. If the partial cure is not enough and the deficiency still endangers performance, show-cause is appropriate. Document why the partial cure was insufficient. |
A show-cause notice should contain:
Since you have failed to [insert "perform Contract No. ___ within the time required by its terms," or "cure the conditions endangering performance under Contract No. ___ as described to you in the Government's letter of ___ (date)"], the Government is considering terminating the contract under the provisions for default of this contract. Pending a final decision in this matter, it will be necessary to determine whether your failure to perform arose from causes beyond your control and without fault or negligence on your part. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to [insert the name and complete address of the contracting officer], within 10 days after receipt of this notice. Your failure to present any excuses within this time may be considered as an admission that none exist. Your attention is invited to the respective rights of the Contractor and the Government and the liabilities that may be invoked if a decision is made to terminate for default. Any assistance given to you on this contract or any acceptance by the Government of delinquent goods or services will be solely for the purpose of mitigating damages, and it is not the intention of the Government to condone any delinquency or to waive any rights the Government has under the contract.
That is the FAR-prescribed format. Like the cure notice format, it is a single paragraph. In practice, you should supplement this with the specific facts of the situation: the contract number, the delivery date or cure notice date, and a clear description of what the contractor failed to do. The FAR format handles the legal framework; your job is to fill in the brackets with enough specificity that the record stands on its own. Note that the format already covers the two common triggers: failure to perform on time, and failure to cure after a cure notice.
After receiving the contractor's show-cause response (or after the response deadline passes without a response), the CO evaluates what was submitted and makes a recommendation to legal counsel. Three outcomes are possible:
The contractor presents a valid excusable delay. FAR 52.249-8(c) lists causes that may excuse a contractor's failure to perform: acts of God, acts of the government in its sovereign capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather. If the contractor demonstrates that the failure was caused by one of these and was beyond their control and without their fault or negligence, termination for default is not appropriate. The CO should consider granting a delivery extension or other appropriate relief.
The contractor presents a credible plan to complete performance. The contractor acknowledges the problem but provides a realistic, detailed plan to get back on track. The CO, in consultation with legal counsel, may decide to give the contractor more time rather than terminate. This is a judgment call. If you go this route, document the decision and the basis for it, and set clear milestones so you can assess whether the recovery plan is working.
The contractor's response is inadequate, or no response is received. If the contractor does not respond, or responds with excuses that do not constitute excusable delay and no credible recovery plan, the CO has a basis to proceed with termination for default. At this point, the decision is typically made in close coordination with legal counsel and, in some agencies, a termination contracting officer.
The cure notice and show-cause notice are tools the CO uses to build the record. The termination decision itself involves your legal counsel, and in many agencies, a termination contracting officer (TCO) who specializes in termination actions. This is by design. Terminations for default are among the most legally consequential actions in contract administration. The contractor can appeal to a board of contract appeals (ASBCA, CBCA) or the Court of Federal Claims. The government bears the burden of proving the termination was justified.
Your job is to create a record that is clear, specific, and complete. That means:
If the record is clean, your legal team and TCO have what they need. If the record has gaps (vague deficiency descriptions, unreasonably short cure periods, inadequate evaluation of the contractor's response), the termination is vulnerable on appeal.
| Cure Notice | Show-Cause Notice | |
|---|---|---|
| Purpose | Fix this problem | Tell me why I should not terminate you |
| FAR authority | FAR 49.402-3(d) and (e) | FAR 49.402-3(f) |
| When used | Contractor failing to make progress or perform; delivery date not yet passed | After cure notice expires without cure, or delivery date has passed |
| Minimum period | 10 days (FAR 49.402-3(e)) | No FAR minimum; typically 10 days |
| Burden | Government states what is wrong; contractor must fix it | Contractor must justify why termination should not occur |
| What follows | If not cured: show-cause notice | If not justified: termination for default decision (with legal/TCO) |
Each scenario below presents a situation where a show-cause notice may or may not be the right action. Read the facts, decide the appropriate response, and see the feedback.
The full default procedure including cure notices (subsection d/e), show-cause notices (subsection f), and the termination decision process.
Open FAR 49.402-3 →Lists the causes that may excuse a contractor's failure to perform: acts of God, acts of the government in its sovereign capacity, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and unusually severe weather.
Open FAR 52.249-8 →The full subpart covering the government's right to terminate, procedures, contractor liability, and repurchase against the contractor's account.
Open FAR 49.4 →After termination for default, the government may repurchase from another source and charge the defaulting contractor for excess costs above the original contract price.
Open FAR 49.402-6 →Covers the settlement process when a termination for default is sustained, including the contractor's liability and the government's rights.
Open FAR 49.109 →The companion training on cure notices. Covers when to issue, required elements, and why the cure notice should be your first step.
Open Cure Notices Training →