Before the government can terminate a fixed-price contract for default, the contracting officer almost always has to send a written warning first — and the rules governing that warning live in FAR 49.402-3. Contractors who treat a cure notice or a show cause notice as boilerplate paperwork often lose the one formal window they have to save the contract, and with it, a clean past-performance record.
Background
FAR Part 49 governs how the government ends contracts before completion, and it splits terminations into two tracks: for convenience, when the government simply no longer needs the work, and for default, when the contractor is blamed for the failure. A default termination carries real consequences beyond losing the contract — under the broader FAR Part 49 default-termination framework, it can expose the contractor to liability for the government's cost of reprocuring the work and typically becomes part of the negative performance record that follows the contractor into future source selections, consequences that flow from default termination generally rather than from the cure or show cause notice itself.
Because default termination is punitive, FAR builds in a notice-and-response step before the contracting officer can pull the trigger on most default terminations. That step comes in two forms depending on the type of failure: a cure notice for contractors who are behind schedule or performing inadequately but still have time left on the contract, and a show cause notice for contractors who have already missed a required delivery or completion date. The two documents serve the same underlying purpose — giving the contractor formal notice and a chance to respond — but they attach to different fact patterns and carry different legal weight.
Key Details
FAR 49.402-3(d) requires that when a contractor's failure to perform or lack of progress endangers performance, the contracting officer must give written notice specifying the failure and providing "a period of 10 days (or longer period as necessary) in which to cure the failure" before a default termination can be based on that failure. Ten days is the floor, not a fixed rule — the regulation allows the contracting officer to extend it where circumstances warrant, but a default termination issued without any cure opportunity, where one was required, is vulnerable to challenge.
The show cause notice, addressed at FAR 49.402-3(e), applies to a different situation: the contractor has already failed to deliver or complete the work by the date required, and termination for default already appears warranted. Here the contracting officer "should, if practicable" notify the contractor of the possible termination, state what contractual liabilities would follow, and ask the contractor to explain the failure. The notice may state on its face that a failure to respond will be treated as an admission that no valid excuse exists, and it may offer the contractor a conference to discuss the matter. Unlike the cure notice, the show cause notice does not promise a fixed number of days to fix the underlying performance problem — the default has typically already occurred — but it does give the contractor a chance to document excusable causes, such as those covered elsewhere in FAR Part 49, before the termination decision is finalized.
FAR 49.402-3 also permits the contracting officer to combine the cure notice and the show cause notice into a single document, and FAR 49.607 prescribes the format language both notices are supposed to follow, so contractors should expect a fairly standardized layout rather than freeform correspondence. One provision that gets missed even by some contracting officers: where the contractor is a small business, the cure or show cause notice must be furnished immediately to the agency's small business specialist and to the nearest SBA Area Office. That routing requirement exists so SBA has visibility into a potential default before it becomes final, not after.
It is worth separating this notice-and-response mechanism from the termination decision itself. The cure notice and show cause notice do not terminate anything on their own — they are the procedural gate the contracting officer generally has to pass through before issuing a termination for default under the broader FAR Part 49 framework. A contractor's response, or lack of one, becomes part of the record the contracting officer relies on when deciding whether to proceed.
What It Means for Contractors
A cure notice or show cause notice is not a formality to acknowledge and set aside — it is the last structured opportunity to change the outcome before a default termination becomes final. Contractors who receive one should treat the response as a formal submission, not an email. That means documenting concrete corrective actions with dates and owners if it is a cure notice, or documenting excusable-delay evidence — acts of God, government-caused delays, subcontractor failures beyond the contractor's control, and similar causes recognized elsewhere in FAR Part 49 — if it is a show cause notice.
Timing matters on both ends. On a cure notice, the 10-day (or longer) period is a floor set by regulation, but contractors should not assume more time is coming; if the notice does not specify a longer window, plan to have a documented plan back to the contracting officer well inside 10 days, since mail and internal routing eat into that clock. On a show cause notice, silence is dangerous by design — the regulation lets the notice state that no response can be read as an admission that no valid explanation exists, so a contractor that simply lets the letter sit is handing the contracting officer the easiest possible record to terminate on.
Small businesses have an extra lever worth using: because the contracting officer is required to notify the agency's small business specialist and the local SBA Area Office immediately, a contractor should confirm that notification actually happened and consider looping in its own SBA contacts. SBA involvement does not override the contracting officer's authority, but it adds a second set of eyes to a decision that otherwise rests entirely with the agency.
Finally, contractors should request the conference the show cause notice may offer. A written response constrained to a page or two rarely captures the full context behind a missed delivery date; a conference lets the contractor walk the contracting officer through root causes, corrective steps already underway, and any government-caused contributing factors, all of which become part of the documented record if the termination decision is later challenged. Treating the notice period as an adversarial deadline to survive, rather than a chance to build a real record, is the most common and most costly mistake contractors make at this stage.
