Show Cause Notice (SCN)

A Show Cause Notice is a written notice from the government asking the contractor to explain why the contract should not be terminated for default because of non-performance or late performance. It is typically used when default termination appears appropriate and the government wants the contractor’s explanation before making a final decision.

What Is a Show Cause Notice?

In government contracting, a Show Cause Notice is a pre-termination notice used when the contractor has failed to perform, failed to deliver on time, or otherwise created serious performance concerns. It tells the contractor that the government is considering termination for default and gives the contractor a chance to respond.

It is different from a cure notice. A cure notice is generally used when there is still enough time left in the schedule to give the contractor time to fix the problem, while a show cause notice is commonly used when that kind of cure period is not practical.

Key Characteristics

Issued in writing by the government

Used before possible termination for default

Asks the contractor to justify non-performance or delay

Warns of contractual liabilities if default termination occurs

Often used when there is not enough time left for a cure period

How It Works in Government Contracting

A Show Cause Notice usually appears during contract administration after the government believes the contractor may be in default. The contracting officer sends the notice and asks the contractor to explain the reasons for the failure and why the contract should not be terminated.

It is used by contracting officers, contract administration staff, legal counsel, and contractors. In practice, the contractor responds with facts, explanations, and any basis for excusable delay or other justification.

The government then decides whether to continue performance, take another corrective step, or terminate for default.

Regulatory Framework

Show Cause Notices are part of the federal termination for default framework. They are used to give the contractor an opportunity to explain performance failure before the government makes a final termination decision.

Why It Matters for Contractors

A Show Cause Notice matters because it is a serious warning that the contract is at risk of default termination. A weak or late response can hurt the contractor’s position and may lead to termination, with possible financial and past performance consequences.

It also matters strategically because it gives the contractor a chance to explain excusable delay, provide a corrective path, or create a record before the government makes its final decision.

Common Misconceptions

A Show Cause Notice means the contract has already been terminated.

It is a warning and request for explanation before the government decides whether to terminate for default.

A Show Cause Notice gives an automatic cure period.

It is different from a cure notice and is often used when there is not enough time left for a realistic cure period.

The contractor can ignore it and explain later.

The response may heavily affect whether the government proceeds with default termination.

Frequently Asked Questions

What is the purpose of a Show Cause Notice?

It asks the contractor to explain why the contract should not be terminated for default due to non-performance or delay.

Who issues a Show Cause Notice?

Usually the contracting officer.

How is it different from a Cure Notice?

A cure notice is generally used when there is enough time left to allow correction, while a show cause notice is often used when that is not practical.

Why is it important?

Because it is often the final chance to explain the failure before the government decides on termination for default.