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10 U.S. Code § 2872b - Treatment of breach of contract

(a) Response to Material Breach.—
In the case of a material breach of contract under this subchapter by a party to the contract, the Secretary concerned shall use the authorities available to the Secretary, including withholding amounts to be paid under the contract, to encourage the party to cure the breach.
(b) Rescinding of Contract.—If a material breach of the contract is not cured in a timely manner, as determined by the Secretary concerned, the Secretary may—
rescind the contract pursuant to the terms of the contract; and
prohibit the offending party from entering into a new contract or undertaking expansions of other existing contracts, or both, with the Secretary under this subchapter.