§ 1–328.15a. Termination of a grant agreement.

(a) A grant agreement for a grant awarded on a competitive basis pursuant to § 1-328.13(a) may be terminated, in whole or in part, before the end of the grant agreement, only if:

(1) The grantee fails to comply with the terms or conditions of the grant agreement or applicable laws; or

(2) The grantor and the grantee mutually determine that the continuation of the grant agreement would not produce beneficial results commensurate with the further expenditure of funds.

(b)(1) A grantor who intends to terminate a grant agreement under subsection (a)(1) of this section shall notify the grantee in writing of the grantor's intent to terminate the grant agreement and the reasons therefor. The notice shall be delivered by hand, certified mail, courier, delivery service, or electronic mail and shall request the grantee to show cause in writing why the grant should not be terminated.

(2)(A) The show-cause notice issued pursuant to paragraph (1) of this subsection shall:

(i) State the reasons for the proposed termination;

(ii) State the effective date of the termination; and

(iii) Provide the grantee 10 business days after the receipt of the notice to respond, including by presenting in writing any facts bearing on the case.

(B) To refute any allegation of non-compliance described in the show-cause notice, the grantee must substantiate that the determination of non-compliance is founded on a substantial factual error. An allegation of noncompliance cannot be refuted by defense of honest mistake, good intention, or ignorance of the requirement(s).

(C) A grantor shall provide a reply to a grantee's response made pursuant to subparagraph (A)(iii) of this paragraph within 15 business days after receiving the grantee's response. The grantor's reply shall include the grantor's reason for agreeing or disagreeing with the facts and arguments presented by the grantee and shall set forth the grantor's decision whether to terminate the grant agreement as described in the notice required by paragraph (1) of this subsection or to revoke such notice.

(1) By the grantor with the written consent of the grantee, in which case the two parties shall agree upon the termination and, in the case of partial termination, the portion to be terminated; or

(2) By the grantee upon written request to the grantor setting forth the reasons for such termination, the effective date, and, in the case of partial termination, the portion to be terminated; provided, that the grantor must provide written consent to the grantee's request to terminate the grant agreement.