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Contract Provisions Guide <br />9 <br /> <br />Required Contract Provisions <br />1. Remedies <br />Contracts for more than the federal simplified acquisition threshold (SAT), the dollar amount below <br />which an NFE may purchase property or services using small purchase methods, currently set at <br />$250,000 for procurements made on or after June 20, 2018,4 must address administrative, <br />contractual, or legal remedies in instances where contractors violate or breach contract terms, and <br />must provide for sanctions and penalties as appropriate.5 <br />1.1 Applicability <br />This contract provision is required for contracts over the SAT, currently set at $250,000 for <br />procurements made on or after June 20, 2018. Although not required for contracts at or below the <br />SAT, FEMA suggests including a remedies provision. <br />1.2 Additional Considerations <br />For FEMA’s Assistance to Firefighters Grant (AFG) Program, recipients must include a penalty clause <br />in all contracts for any AFG-funded vehicle, regardless of dollar amount. In that situation, the <br />contract must include a clause addressing that non-delivery by the contract’s specified date or other <br />vendor nonperformance will require a penalty of no less than $100 per day until such time that the <br />vehicle, compliant with the terms of the contract, has been accepted by the recipient. This penalty <br />clause should, however, account for force majeure or acts of god. AFG recipients should refer to the <br />applicable year’s Notice of Funding Opportunity (NOFO) for additional information, which can be <br />accessed at FEMA.gov. <br />2. Termination for Cause and Convenience <br />Contracts for more than $10,000 must address termination for cause and for convenience by the <br />non-federal entity, including how it will be carried out and the basis for settlement.6 <br />2.1 Applicability <br />This contract provision is required for procurements exceeding $10,000. FEMA suggests including a <br />termination for cause and for convenience in all contracts even when not required. <br /> <br />4 See FEMA Grant Programs Directorate Information Bulletin No. 434, Increases and Changes to the Micro- <br />Purchase and Simplified Acquisition Thresholds (Aug. 28, 2018), <br />https://www.fema.gov/sites/default/files/2020- <br />08/ib_434_changes_micro_purch_simp_acquisition_thresholds.pdf. For procurements subject to 2 C.F.R. Part <br />200 that were made before June 20, 2018, the SAT was $150,000. <br />5 2 C.F.R. Part 200, Appendix II, § A. <br />6 See 2 C.F.R. Part 200, Appendix II, § B. <br />ATTY/AGR.2025.317/Wood Rodgers, Inc. (Page 46 of 77)