Before the termination of the contract by the Contracting Authority, the Project Manager (or the Engineer) must draft and send notice to the Contractor affording him a term (e.g., 7 days in the case of supplies and service contract or 14 days in the case of a public work contract) within which it shall invite him to comply and restore every negligence or inability to fulfil his contractual obligations.
The Table below includes the presentation of two alternative wordings which may be used as templates to draft the Provisional Notice for Termination depending on the case and the reason for which the Contracting Authority intends to terminate the contract.
Table 6–12: Templates for drafting the Provisional Notice for Termination
1st Alternative wording
The <name of Contracting Authority> notifies the <company name or full name of Contractor> that it considers the <reason of non compliance> as a condition which jeopardises the performance of the contract. For this reason, should this condition have not been corrected within <……> days from the receipt of the letter hereby, then the <name of Contracting Authority> may proceed with the termination of the contract hereby, invoking the terms and conditions mentioned in the Article "Termination by the Contracting Authority," of the contract hereby.
2nd Alternative wording
Due to failure in the execution of the as above mentioned contract within the time required by the terms of the contract, the Contracting Authority is considering the possibility to terminate the contract in accordance with what is provisioned in the contract about non compliance. With the final decision on the issue pending, it is necessary to determine whether the said failure of execution was due to causes beyond your control and with no liability or responsibility on your part. Therefore, you are given the possibility to submit in writing any evidence on this issue to <full name of Project Manager> within <......> days from the receipt of the letter hereby. Failure to present any justification within this period of time shall be considered as acceptance of the fact that there are no excuses.
It is noted that, any facility that may be provided to you in the context of the contract or any acceptance by the <name of Contracting Authority> of non compliant product or service or work, shall be implemented with the sole purpose of alleviating the damages and the <name of Contracting Authority> does not intend to tolerate any non compliance or waive any of its/ his rights provided based on the contract.
Upon the lapse of the term of 7 or 14 days or as many days as specified in the contract and if the Contractor has failed to settle the situation or failed to provide satisfactory explanation as required during the notice, the contract may be terminated.
The Project Manager (or the Engineer) drafts, on behalf of the Contracting Authority, the contract Termination Notice which he notifies to the Contractor.
The Termination Notice must include the following information:
Table 6–13: Typical Contents of the Contract Termination Notice
|□||Reference number (code) of the contract and date of signature of the contract|
|□||Date on which the termination of the contract is put into effect|
|□||Reference to the term or terms based on which the contract is terminated|
|□||Complete and precise statement of the evidence justifying the termination|
|□||Statement that the contract being terminated may be re-announced from the beginning and that the Contractor is considered liable for the additional costs that the Contracting Authority will incur in order to conduct a new tender. (Before this statement is drafted it must be examined whether the contract provides this right to the Contracting Authority)|