Century Marine was terminated for default on a government vessel repair contract and sued to recover the unpaid contract balance minus completion costs. The court ruled that a contractor terminated for default cannot recover anticipated but unearned profits, even if they argue the termination should have been for convenience instead. This decision reinforces that defaulted contractors lose the right to payment for unfinished work under federal contracts.
If you're terminated for default, you cannot recover the profit portion of unpaid contract balance—only costs actually incurred up to termination
Claiming extra work or requesting conversion to a convenience termination won't help if the government can prove you defaulted on time or performance obligations
Federal acquisition regulations strictly prohibit recovery of unearned profits after default termination, regardless of how close you were to completion