Terminations for Convenience by ProQuest

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In International Data Products Corp. v. United States,2 the contractor provided computer systems and related services to the Air Force under an indefinite-delivery indefinite quantity (ID/IQ) contract awarded under section 8(a) of the Small Business Act.3 The Air Force was ultimately compelled to terminate the contract for convenience when the contractor corporation was purchased by a non-section 8(a) concern.4 At that time, the Air Force had already purchased over $35 million in goods and services under the contract, far in excess of the contract's $100,000 minimum quantity.5 Upon termination, the Air Force insisted that the contractor continue to fulfill its contract obligations for warranty services and software upgrades that accompanied the products purchased prior to the contract termination.6 The contractor objected, but continued to provide the warranty services under threat of default and debarment.7 At the COFC, the contractor sought approximately $1.7 million in termination costs, which included $440,990 for providing the warranty services and software upgrades after the contract had been termination.8 The COFC granted summary judgment for the government on the issue of termination settlement costs, holding that once the government had met its obligation to purchase the guaranteed minimum quantity under the ID/IQ contract, it had no further obligation to pay contractor settlement costs.9 But the court also held that the contractor was not required to continue to perform the warranty and upgrade services after the contract was terminated, finding that the statute which required the government to terminate the contract for convenience in these circumstances does not permit a partial termination of the contract.

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