The 'Default' clause provides the Government with the right to terminate a contract upon the occurrence of a performance failure. However, this right may be sacrificed if contracting officers do not have adequate visibility of contractor performance. The objectives of this study were to (1) identify advance indicators of unpending defaults, and (2) develop an improved methodology for default detection based on the systematic use of such indicators. The approach employed to achieve these objectives was to (1) review applicable legal and regulatory material; (2) analyze a broad sample of recent termination actions; and (3) interview individuals in both the contracting and legal fields. Advance indicators of contractor default are manifest in many forms. Such indicators can be categorized and incorporated into a system level model of the performance management process. Use of this model will enhance the contracting officer's ability to pursue and sustain a default termination in a more effective and timely manner.
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