The Learning Curve

New tricks for an old dog.

A lesson in unintended debt limit consequences

Almost every government contract contains some type of “Termination for Convenience” clause. This clause permits the Government to terminate the contract at any time without cause, when in the Government’s best interest. The right to terminate without cause arose from the Government’s need to adapt acquisition needs to changes in situations. Forms 52-249 1 through 7

If the Congress refuses to provide full funding for the existing Federal budget and forces President Obama to prioritize expenditures, suspension or termination of many Federal contracts would be a dire necessity. The circumstances would also give President Obama good justification for outright cancellation of any Federal contract that didn’t fit with his personal political or policy priorities.

One possibility that comes to mind might be contracts for the development of advanced weapon systems that are not high on the President’s list of priorities. If the President were a petty politician, he might unobtrusively target cancellation of contracts with businesses located in heavily Republican districts. Proceeding with the intention of harming your opponents seems to be standard operating procedure in Washington these days.

I’m not suggesting that the President would ever act with anything but good faith. Still, I have to question whether the GOP has considered it will be giving the President the unfettered opportunity to do so if no deal is reached soon.

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Written by Tom Fox

07/30/2011 at 1:20 pm

Posted in Politics

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