Developing a Close-Out Plan in Procurement Management Plan Research Paper

Developing a Close-Out Plan in Procurement Management Plan - Research Paper Example This calls in the legal advice from either the corporate legal counsel or an outside lawyer. This is a matter of withdrawing from the provisions of the outsourced contract. Usually the terms and processes for terminating a contract before time are spelled out in the initial contract. This section of the contract is called the termination clause. This clause is there for the protection of both the buyer and the seller, since termination before time can severely damage the interests of either party. Most procurement contracts usually require that the party who wants to terminate the contract before time must notify the other party within a reasonable amount of time, failure to which can result in severe financial penalties for that party. Another aspect of termination clause is the substitute provider. The party who wants to forfeit being part of the legal contract will have to find an alternative provider for the other party if it wants to get out of the contractual relationship. Such provisions and contingencies depend on the parties to the contract. There is no hard and fast rule to this as both parties make the rules themselves of earlier termination in the initial contract (Beyond the Information Systems Outsourcing Bandwagon, 2005). If a contract has a written provision that any modification or termination by agreement should be in written form, then any termination or modification cannot be made effective otherwise. But as stated earlier, this agreement is made by the parties to the contract and termination or modification can be made possible and legally effective orally, in written form, by an act, by staying silent or by inaction, if the initial contract contains such a provision (Viscassilas, 2006). Categorizing the differences in termination of contracts There are three general scenarios in which one party feel the urge and have legal approval to end the contract; Scenario A: Termination for Cause or Default (Seller’s Gaffe) This is a classic f ault from the seller’s side in which the buyer is not satisfied by the quality of the products or the delivery timings. In brief, the seller doesn’t fulfill his contractual obligations in the way he is bound to fulfill them. ‘Failure without legal excuse’ is the key term here that defines the seller’s breach. Seller fails to complete his critical obligations and the buyer is fully defensible in terminating the contracting immediately. Breach from the seller’s side should be ‘material’, which means that the damage to the buyer must be significant enough to give him the legitimate excuse to lay off the contract. Scenario B: Closure for the Suitability (of the Buying side) This tort is inspired by the Federal Acquisition Law which states that the federal government reserves the right to end the procurement contract for its convenience. Many other governmental agencies have followed this law since and have acquired the same legal pos ition in their procurement contracts. These governmental agencies can end the contract if and when they see fitting. These governmental bodies represent state, county and local and many industries are following this legal trend. If the buyer terminates the contract before it is legally expired, he/she needs to notify the seller at a reasonable time so as to not hurt him financially. After sending the notice, both parties must come to the negotiation table to sort