_______________________________________________
 
                      DENIED:  September 26, 1995
            _______________________________________________
 
 
                              GSBCA 13154
 
 
                            GENERAL CUTLERY,
 
                                           Appellant,
 
                                   v.
 
                    GENERAL SERVICES ADMINISTRATION,
 
                                           Respondent.
 
        Carleton Reitz  of General  Cutlery, Fremont,  OH, appearing
   for Appellant.
 
        David   L.  Frecker,  Office  of  General  Counsel,  General
   Services Administration, Washington, DC, counsel for Respondent.
 
   Before Board Judges DANIELS (Chairman), BORWICK, and WILLIAMS.
 
   BORWICK, Board Judge.
 
        This appeal  concerns the General  Services Administration's
   (GSA's) termination for  default of  one item--paring  knives--in
   General Cutlery's indefinite  delivery/indefinite quantity (IDIQ)
   supply  contracts for  forks  and a  variety  of kitchen  knives.
   Paring  knives were  one of  the largest  estimated items  in the
   contracts,  with an estimated peak monthly requirement of 16,704.
   While the appeal  involves no cutting edge legal  issues, it does
   illustrate--for General  Cutlery  at  least--the  old  adage  "be
   careful for what  you wish; your  wish might  come true, to  your
   ultimate sorrow."  
 
        GSA was  a reluctant customer  of General Cutlery.   GSA had
   negatively evaluated  General Cutlery's production  and financial
   capabilities to perform these contracts and  was prepared to find
   the firm non-responsible.  GSA nevertheless awarded the contracts
   to General Cutlery after the Small Business Administration either
   issued,  or  told GSA  that  it  would  issue, a  certificate  of
   competency for the company.  GSA's doubts about General Cutlery's
   ability  to perform the  contracts were  well founded.   Purchase
   orders--particularly     for    paring     knives[foot #] 1--came
   with stabbing  regularity,  and General  Cutlery  quickly  became
   delinquent in timely filling the orders.    
 
 
        Upon  receiving the first  group of orders,  General Cutlery
   immediately requested an extension of the delivery dates of those
   orders.   General  Cutlery stated  that it  lacked the  supplies,
   personnel, and manufacturing capability  to fill its  obligations
   on the GSA IDIQ contracts and obligations on other Government and
   commercial contracts.   General Cutlery promised to  improve, and
   based on those promises,  GSA granted extensions of  the delivery
   dates.   During the year and one-half time frame involved in this
   appeal,  GSA's  administration of  these  contracts involved  the
   following  sequence  of events,  which  occurred  with depressing
   regularity:  A group of purchase orders issued to General Cutlery
   would become delinquent as to  delivery dates, GSA would  request
   an explanation  for the  delay  in filling  the purchase  orders,
   General Cutlery  would provide  its litany  of  excuses, and  GSA
   would grant  extensions of the  delivery dates.   Not to  put too
   fine a  point on  the matter, General  Cutlery struggled  to fill
   delinquent orders  at the same  time that it  was faced  with new
   orders, and  could never catch up.  In  December of 1994, a group
   of purchase orders  for paring knives became delinquent, and GSA,
   tired of the mess, default terminated that item.      
 
        General  Cutlery appealed the default termination as to that
   item.  The  parties have chosen  to submit their  dispute on  the
   written  record, pursuant  to Board  Rule 11.   We  conclude that
   General Cutlery has not  shown excusable causes of  default under
   the  Termination for Default clause of  its contract, and sustain
   the decision of the contracting officer.  
 
                            Findings of Fact
 
        On May 5,  1993, GSA awarded two IDIQ  contracts for kitchen
   knives  and utensils to  General Cutlery.   Contract GS-07F-67820
   was  for  items  one through  twenty-eight  and  items thirty-two
   through   thirty-eight.     Appeal  File,   Exhibit   1  at   33-
   34.[foot #] 2     Contract    GS-07F-67810     was    a     small
   business set-aside contract for items twenty-nine through thirty-
   one.  The contract items were designated by national stock number
   (NSN)  and further  subdivided  by  delivery  destination.    For
   example, items  twenty through  twenty-three were paring  knives,
   NSN  7340-00-488-7939,  to   be  delivered  to  Fort   Worth  TX,
   Burlington NJ, Lathrop CA, and Stockton CA, respectively.  Id. at
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1  One of  the unanswered questions in  this appeal
   is why the Government had  such an insatiable appetite for paring
   knives.
 
        [foot #] 2  Respondent has hand-numbered pages consecutively
   within each exhibit; our page references are to the hand-numbered
   pages.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   34.   The term  of these contracts  was from May  5, 1993 through
   February 28, 1995.  Id., Exhibit 3.  
 
 
        The  estimated  value  of  the  contracts  was  $942,838.32.
   Appeal  File,  Exhibit 1  at  29.    The estimated  peak  monthly
   requirements were high for some  items.  For paring knives, items
   twenty   through  twenty-three,   the   estimated  peak   monthly
   requirements were 4,320, 6,912,  1,152, and 4,320,  respectively.
   Id. at 51.   For boning knives, items one through three, the peak
   monthly supply potential was 2,592, 648, and 2,488, respectively.
   Id.  In its bid, General Cutlery left blank the space for filling
   in its  peak monthly  supply potential.   In accordance  with the
   monthly  supply  potential  clause,  therefore,  General  Cutlery
   committed   to  supplying  125%  of  GSA's  peak  monthly  supply
   potential.   Id. at 79.   For paring  knives, that amounted  to a
   commitment to supply 20,880 paring knives per  month, if ordered.
   Under  the monthly supply  potential clause, General  Cutlery was
   required   to  honor  any  order  exceeding  the  monthly  supply
   potential  unless General  Cutlery  returned  the  order  to  the
   ordering office within five days of receipt.  Id. at 80.  
          
        The contracts required  General Cutlery to make  delivery at
   destination  sixty calendar  days  after  receipt  of  an  order.
   Appeal  File, Exhibit  1 at  61.   The contracts  incorporated by
   reference the clauses found at GSA Form 3507, A-FSS-23 (May 1992)
   Supply  Contract Clauses.   Id. at  41.   That form  contains the
   standard Termination for  Default Clause (Fixed Price  Supply and
   Service)    (APR     1984)[foot #] 3,    which     provides    in
   pertinent part:
 
        (a)(1) The  Government may,  subject to  paragraphs (c)
        and  (d) below,  by written  notice of  default  to the
        Contractor, terminate this contract in whole or in part
        of the Contractor fails to--
 
        (i)   Deliver   the  supplies . . . within   the   time
        specified in this contract or any extension[.]
 
        (ii)  Make progress, so  as to endanger  performance of
        this contract (but see subparagraph (a)(2) below).
 
        (iii)  Perform  any  of the  other  provisions  of this
        contract (but see subparagraph (a)(2) below).  
 
        (2) The  Government's right to terminate  this contract
        under subdivisions  (1)(ii) and (1)(iii)  above, may be
        exercised  if the Contractor does not cure such failure
        within 10 days (or more if authorized in writing by the
        Contracting Officer) after  receipt of the notice  from
        the Contracting Officer specifying the failure.  
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 3  48 CRF 52.249-8 (1993).
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        . . . .
 
        (d) If the failure to  perform is caused by the default
        of a subcontractor at any tier, and if the cause of the
        default  is beyond the  control of both  the Contractor
        and  subcontractor, and without the fault or negligence
        of either, the Contractor shall  not be liable for  any
        excess  costs   for  failure  to  perform,  unless  the
        subcontracted supplies or services were obtainable from
        other  sources in sufficient time for the Contractor to
        meet the required delivery schedule.  
 
   Id. at 25.  
 
        Prior to award, GSA  negatively evaluated General  Cutlery's
   plant facilities  and financial  responsibility, and  made a  "no
   award" recommendation.  Appeal  File, Exhibit 1 at 31.   GSA made
   the award  to General  Cutlery only after  referral to  the Small
   Business  Administration (SBA)  for a  certificate of  competency
   (COC) and after SBA indicated that it would  issue a COC.  Id. at
   30.  
 
        By August 6, 1993, GSA  had issued eleven purchase orders to
   General  Cutlery.  Appeal File, Exhibit 5  at 2.  General Cutlery
   requested extensions on the delivery dates of the purchase orders
   because, allegedly,  there was a considerable delay  in the award
   of the GSA contract, which caused General Cutlery to pursue other
   business opportunities as a subcontractor.  Consequently, General
   Cutlery was busy filling orders  for Army bayonet knives and Navy
   diving knives.   Id., Exhibit 6 at 4.  General Cutlery also cited
   problems with  steel production--the  special steel  required was
   not available except  on special order--an  inability to ramp  up
   production for the  quantity of goods ordered, and  a shortage of
   boxes to ship  the goods.   Id.    GSA  granted an extension  for
   contractor  consideration of  $502.80, id., Exhibit  5 at  4, and
   modified the contract accordingly.  Id., Exhibit 6.  
 
        On September  1, 1993, General Cutlery  requested extensions
   on  seven other  purchase  orders  and a  second  extension on  a
   purchase order  in the  first group extended,  reciting the  same
   reasons as the first request  for extension: i.e., the failure of
   the  box supplier  to  supply  boxes, delay  in  the delivery  of
   special steel  needed for  the blades, and  alleged delay  in the
   awarding  of  contracts which  resulted  in the  large  number of
   unexpected orders.  Appeal File,  Exhibit 10 at 1.   On September
   27,  1993, GSA  granted General  Cutlery  extensions on  nineteen
   purchase orders covering eight NSNs.  Id., Exhibit 12 at 3.   
 
        On October 15, 1993, GSA advised General Cutlery that it was
   delinquent  on  thirty-seven  purchase orders  and  that  GSA was
   considering  terminating  those  purchase  orders  for   default.
   Appeal File,  Exhibit 15.   GSA requested  an explanation  of the
   delinquencies within ten  days.  Id.   General Cutlery  responded
   with  its list  of  reasons  for the  delay,  including delay  in
   obtaining steel, problems with  suppliers of forgings,  inability
   to  obtain boxes  from  suppliers,  and  problems  in  converting
   tooling machines to manufacture items.  Id., Exhibit 16.  
 
 
        On November 1, 1993, General Cutlery reported to GSA that it
   was installing  equipment and  working overtime  so that  by mid-
   December it  would be current  with existing orders and  those to
   come.  Appeal File, Exhibit 17.  
 
        On  November 9, the  GSA quality assurance  specialist (QAS)
   noted  several bottlenecks  to  General Cutlery's  production  of
   goods:  (1) the  sixty-day production  time  required to  harden,
   heat-treat,  and  form the  blades;  (2)  the  time required  for
   grinding the  blades; and (3)  the fact that General  Cutlery had
   only one plastic molder capable of producing one thousand handles
   per eight hour shift.  Appeal File, Exhibit 18.  
 
        On  November 30,  1993, the  QAS reported  that, as  of that
   date, General Cutlery  had shipped 2,160 scimitar  knives, 11,736
   boning  knives,  17,712 paring  knives,  and 3,120  pie  and cake
   servers, and  that in  the next two  weeks General  Cutlery would
   ship  1,000  cook's  knives, leaving  5,700  purchase  orders for
   cook's knives delinquent.  Appeal File, Exhibit 19.  
 
        On December 3, 1993, GSA advised General Cutlery that it was
   delinquent  on  thirty-seven  purchase  orders covering  numerous
   stock  numbers, and  that  the  Government  might  terminate  the
   purchase  orders for  default unless  it  shipped all  delinquent
   orders by  the re-established date  of December 13.   The largest
   delinquent  item was paring knives, NSN 7340-00-488-7939; GSA had
   placed  eight purchase  orders for  delivery  of 44,784  of them.
   Appeal File, Exhibit 22.
 
        General  Cutlery responded  by proposing a  revised schedule
   for deliveries.  It justified the delay by claiming that its work
   force had come  down with the flu and that "it has been difficult
   to  keep  on  schedule  especially when  our  regular  trade  has
   increased their [sic] demands  very considerably.  We  are simply
   trying  to  keep  everyone  happy."    Appeal  File, Exhibit  24.
   General Cutlery proposed revised shipment dates of January 24 and
   February 14 for the delinquent items.  Id.  
 
        By letter of January 22, 1994, General  Cutlery proposed yet
   another  extension  for  seventy-eight  pending purchase  orders,
   suggesting revised shipping  dates between February 14  and March
   29, 1994.  Appeal File, Exhibit 24.  On February 8, GSA granted a
   contract extension to  dates as late as March  11 for outstanding
   purchase orders.  Id., Exhibit 26.      
 
        As of February  16, there were 706 delinquent backorders for
   21,820  paring knives, 150 delinquent backorders for 4,059 cook's
   knives, 131 delinquent  backorders for 1,253 slicing  knives, and
   127 delinquent backorders for 1,186 butcher knives.  Appeal File,
   Exhibit 28.  
 
        On March  2, 1994, General  Cutlery assured GSA that  it was
   working on  the paring knives  and would have the  goods produced
   within two weeks.   Appeal File,  Exhibit 40 at  2.  On  March 3,
   1994, GSA terminated for default  the NSNs for cook's knives (NSN
   7340-00-223-771), food preparation  forks (NSN 7340-00-292-9487),
   and slicing  knives (NSN 7340-00-406-6531  and 7340-00-406-0863).
   Id., Exhibit 35.  On March 24, GSA extended the delivery  date to
   April 8 for all delinquent  purchase orders for the paring knives
   and again advised General  Cutlery that it faced termination  for
   default if it could not meet the new delivery date.  Id., Exhibit
   40.  
 
        On  April 8, General Cutlery requested yet another extension
   of  the delivery dates for twenty-nine purchase orders, including
   the paring knives.   General Cutlery requested  that the delivery
   dates for the paring knife purchase orders be extended to between
   April 15 and May  11.  Appeal File, Exhibit 43.   General Cutlery
   recited the now familiar litany of excuses, including the lack of
   production  capacity  and the  desire  to  fill orders  on  other
   contracts.  Id., Exhibit 42.  Once again, GSA extended the dates.
   Id., Exhibit 45.  
 
        As of  May 20, GSA's  QAS reported that General  Cutlery had
   shipped 46,656 paring  knives, 3,384 cook's knives,  4,608 boning
   knives,  and 240  butcher knives.    The QAS  noted that  General
   Cutlery  had  received  orders for  an  additional  30,000 paring
   knives, but that General Cutlery had begun production on a second
   plastic molder machine for handles.   The QAS stated that General
   Cutlery had made an excellent  attempt to meet deadlines.  Appeal
   File, Exhibit 48.  
 
        On  May  20,  General  Cutlery  requested  a  delivery  date
   extension  of thirty  days for  two purchase  orders because  the
   orders  exceeded 125  percent of  the  monthly supply  potential.
   Appeal File, Exhibit 48.  
 
        On August 24, General Cutlery requested a sixth extension of
   delivery  dates for  eighteen  purchase  orders, including  eight
   purchase  orders for 52,272 paring knives.   Appeal File, Exhibit
   52.   A purchase  order for  the cook's  knives--NSN-7340-00-488-
   7959--was six  months delinquent.   A  second purchase order  for
   that same item was  delinquent by five months.  A  purchase order
   for the paring  knives was delinquent for two  months, while four
   purchase orders for  that item were a month  late.  The remaining
   three purchase orders  for paring knives were due  in August with
   General Cutlery  unable to  deliver them  by the  specified date.
   Id.  The Government granted the extension.  Id., Exhibit 54.  
 
        On September 21, GSA's QAS reported that General Cutlery had
   failed  to make deliveries every month for the past year and one-
   half, and that  "they would never catch up."  The QAS recommended
   termination of both contracts for default.   Appeal File, Exhibit
   56.    
 
        On  September   28,  General  Cutlery  requested  a  seventh
   extension  of  delivery  dates  for  nineteen   purchase  orders,
   including the purchase  orders for paring knives on  which it had
   previously  sought extensions.   Appeal  File,  Exhibit 57.   GSA
   granted the extensions.  Id., Exhibit 59.  
 
        On December 6, the administrative  contracting officer (ACO)
   reported that General Cutlery was delinquent on its delivery date
   for seven  purchase orders  for paring  knives  and two  purchase
   orders  for  cook's  knives   (NSN-7340-00-488-7950).    The  ACO
   reported  that General  Cutlery  had  a  continual  problem  with
   production and delivery of those items.  Appeal File, Exhibit 64.
   The  ACO  requested  permission  to  terminate  those  items  for
   default.   Id. That same day,  GSA sent General Cutlery  a letter
   threatening default unless it delivered the items by December 16.
   Id., Exhibit 62.  
 
        On December 19, General Cutlery responded to GSA's letter of
   December 6 by  stating that it would ship 4,032  paring knives by
   December  23, that  it would  have 4,000  to 5,000  paring knives
   ready to ship before December 31, and that a lot of 80,000 paring
   knives "were now in process."  Appeal File, Exhibit 66.   Despite
   these  promises of improved  production, on December  22, General
   Cutlery once  again requested  extensions of  delivery dates  for
   purchase  orders  for  paring  knives  and  cook's  knives  until
   February 1995.  Id., Exhibit 70.   
 
        As of December  23, 1994, General Cutlery  was delinquent on
   purchase  orders  for paring  knives.   The purchase  orders, due
   dates, and extended shipments dates are set forth below:
 
        PURCHASE 
        ORDER                    QTY            DUE DATE
 
        FWFA7431                1584            11-01-94
        NWF58293                4032            11-26-94
        NWFC2291                6336            11-30-94
        SWFD4132                3888            12-14-94
        AWFD4131                1584            12-15-94
        FWFD4511                4032            12-20-94
        NWFD4512                6480            12-20-94
        NWF76821                9360            12-16-94
        FWF76391                4176            12-23-94
 
   Appeal File, Exhibit 72.   
 
        On December 23,  1994, GSA denied General  Cutlery's request
   for an extension of delivery dates and terminated all  delinquent
   and outstanding  purchase orders for  the paring knives.   Appeal
   File, Exhibit 74.         
 
                               Discussion
 
   Termination for Default
 
        When a contracting officer's decision terminating a contract
   for default is appealed, the burden is on the Government to prove
   the basis of default.  Lisbon Contractors, Inc. v. United States,
   828 F.2d  759, 764  (Fed. Cir. 1987).   Termination  for default,
   moreover, is  a drastic sanction,  to be imposed on  a contractor
   only for good cause and on the basis of solid evidence.  Foremost
   Mechanical  Systems  v.  General Services  Administration,  GSBCA
   12335, 95-1 BCA   27,382, at 136,495.   
 
         FAR 49.401(a) provides  that "[t]ermination for  default is
   generally the exercise  of the Government's contractual  right to
   completely  or  partially  terminate a  contract  because  of the
   contractor's  actual  or  anticipated  failure  to   perform  its
   contractual  obligations."  In supply contracts, time of delivery
   is of the essence, and a failure to adhere to a delivery schedule
   is sufficient reason  for termination.  Wise  Instrumentation and
   Control, Inc., NASA  BCA 1011-12, 75-2  BCA   11,478, at  54,711.
   When the contract delivery date has not been met and the contract
   is not default terminated,  the Government's subsequent  exercise
   of its rights under the default clause requires the establishment
   of  a new  delivery date  that must  be reasonable  and specific.
   DeVito  v.   United  States,  413   F.2d  1147,  1154   (Ct.  Cl.
   1969)[foot #] 4;    Marci    Enterprises,   Inc.    v.    General
   Services Administration,  GSBCA  12197,  94-1  BCA    26,563,  at
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 4   If  the  Government does  not  establish  a new
   delivery  date which is  reasonable and specific,  the Government
   will be  deemed to  have waived its  termination right  under the
   default clause.  Id.
                    ___
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   132,183; Sun  Cal, Inc.  v.  United States,  21  Cl. Ct.  31,  41
   (1990);    Jack L.  Hartman &  Co.,  AGBCA 84-126-1,  91-1  BCA  
   23,546, at 118,083.  
 
 
        If that new delivery schedule is not met, default is proper.
   Sermor,   Inc.,  ASBCA  29798,  94-1  BCA    26,303,  at  130,836
   (contract  for  the  production of  smoke  grenade  launchers was
   properly terminated for failure to deliver because the contractor
   failed to make delivery in  accordance with the new schedule that
   it had proposed and that the Government had accepted).  Here, GSA
   advised General Cutlery  of the new delivery  date--December 16--
   for the paring knives.  After  GSA had set the new delivery  date
   for  that item,  General Cutlery  requested  an extension  of the
   delivery  dates through  February of  1995.   The request  for an
   extension  was General Cutlery's acknowledgment that it could not
   meet the re-established delivery date.  In  this case, therefore,
   the  Government  has  established   that  the  contractor  failed
   repeatedly to deliver the  supplies within the time specified  by
   the delivery clause of its contract.    
 
        To  avoid  default,   once  the  Government  shows   that  a
   contractor failed to perform in  accordance with the terms of the
   contract,  the burden shifts to  appellant to present evidence of
   excusable causes.   Sierra Tahoe  Mfg., Inc. v.  General Services
   Administration, GSBCA 12679, 94-2 BCA   26,771, at 133,157;Jerome
   Baily, PSBCA 3638, 95-1 BCA   27,447, at 136,742; Robert E. Moore
   Construction, ASBCA  85-262-1, 90-2 BCA   22,803, at 114,522.  In
   this regard, the FAR provides:  
 
        [i]f the contractor  can establish, or it  is otherwise
        determined  that the contractor  was not in  default or
        that the failure  to perform is excusable,  i.e., arose
        out of causes beyond the  control and without the fault
        or  negligence of  the contractor, the  default clauses
        prescribed in 49.503 and located at 52.249 provide that
        a  termination for default  will be considered  to have
        been   a  termination  for   the  convenience   of  the
        Government,  and  the  rights and  obligations  of  the
        parties governed accordingly.
 
   FAR 49.401(b) (1994).  
 
        Throughout  the course  of contract  administration, General
   Cutlery maintained  that it could not obtain  sufficient steel to
   ensure  timely delivery.   However,  such supplier delay  is only
   excusable under  the default clause  if the prime  contractor can
   establish  that the  performance failures  by  the supplier  were
   beyond both  the prime  contractor's control  and the  supplier's
   control, and without either's fault or negligence.  Bigelow Inc.,
   ASBCA  24,376, 81-2 BCA   15,300,  at 75,737.   If the problem is
   due to a shortage of material,  the contractor must show that  it
   made every possible  effort to obtain the material,  but that the
   material  was   unexpectedly  not  available   from  any  source,
   rendering  performance impossible.   See  Gatewood &  Associates,
   Ltd. v. General  Services Administration, GSBCA 9182,  93-1 BCA  
   25,247,  at 125,752 (default  not excused because  contractor did
   not prove required chamois was unavailable, despite problems with
   intended   supplier);  Pinel  Tool  Co.,  GSBCA  4380,  76-2  BCA
     57,597, at 57,600  (default termination of contract  for supply
   of  hand  tools  sustained  despite  alleged  shortage  of  steel
   required to make the tools).  
 
 
        General  Cutlery  has  not made  the  required  showing with
   respect to  the availability of  steel and boxes.   While General
   Cutlery may have been surprised  by the number of purchase orders
   at the beginning of the contract term, the volume of those orders
   was fairly consistent  for a year and one-half.   General Cutlery
   has not demonstrated why it could not have learned from its early
   performance difficulties  and made suitable arrangements with its
   suppliers  for  sufficient  supplies  to  fill   the  outstanding
   purchase orders due on December 16, 1994.  If the suppliers could
   not perform in a timely manner, General Cutlery has not explained
   why it could not have found  other suppliers who could perform in
   a timely manner.     
 
        At one  point,  General Cutlery  plead  the illness  of  its
   workers  as an  excuse for being  late.  Neither  the illness nor
   absenteeism  of personnel are sufficient to excuse late delivery.
   Hoppy's Service, GSBCA 4853, 78-1 BCA   12,978, at 63,261; Jerome
   Baily, 95-1  BCA at 136,742 (default termination  of contract for
   mail transportation was justified because illness of contractor's
   driver did  not excuse  contractor from  performance);   C. Howdy
   Smith, AGBCA 90-154-1,  92-2 BCA    24,884,  at 124,106  (default
   termination  of  toilet  cleaning  and  maintenance contract  not
   excused  by   contractor's  medical  condition   because  medical
   problems not a legal excuse for nonperformance).
 
        General  Cutlery excused its delinquency in filling purchase
   orders because  it was filling  orders on other contracts.   Time
   used  to work  on a  high-priority contract  does not  justify or
   excuse  a delay  in performing  a lower-priority  contract.   The
   timing  factor  is  foreseeable and  within  the  control of  the
   contractor.   Giller Tool Co.,  GSBCA 3282, 71-2  BCA   8932,  at
   41,526 (when contractor  agreed to accelerate delivery  of socket
   wrenches  to  GSA,  it  knew,  or should  have  known,  that  its
   production capabilities would not be  able to meet the demands of
   the contracts at the same time, and when it resorted to diverting
   sockets to  meet the requirements of the  other contract, without
   assuring  itself  that  the performance  periods  of  the earlier
   contract would  be extended, it  assumed the consequences  of its
   decision);  General  Electronic Laboratories,  Inc.,  ASBCA 8918,
   1964  BCA     4326,  at  20,931  (contractor  not   excused  when
   correcting  original  priority  work  became  so  extensive  that
   contractor  was delayed  from performing  lesser  priority work).
   General Cutlery took on other work while knowing that it might be
   awarded the  GSA contract and that  it would have to  fill orders
   placed under that contract.   
   Procedure for default
 
 
        FAR 49.402-3  sets  out  the  procedure for  default.    FAR
   49.402-3(c) provides:
 
             Subdivision (a)(1)(i) of the Default clause covers
        situations when the contractor has defaulted by failure
        to make  delivery of  the  supplies or  to perform  the
        services   within  the  specified   time.     In  these
        situations,  no notice of failure or of the possibility
        of termination for  default is required  to be sent  to
        the contractor before the  actual notice of termination
        (but see paragraph (e) below).
 
        . . . .
 
        (e)(1)   If   the  termination   for   default  appears
        appropriate,   the  contracting   officer  should,   if
        practicable, notify  the contractor  in writing  of the
        possibility of termination.  This notice shall call the
        contractor's attention  to the  contractual liabilities
        if  the contract is terminated for default, and request
        the  contractor to show  cause why the  contract should
        not be terminated for default.
    
        The case before the Board is one where Subdivision (a)(1)(i)
   of  the  Default clause  is  applicable.    Thus, no  notice  was
   required to be sent to the contractor before the actual notice of
   termination.  See  also Brill Brothers,  Inc., ASBCA 42573,  94-1
   BCA     26,352, at  131,056  (in  a  contract with  standard  FAR
   clauses,  there was  "no requirement  for the  service of  a cure
   notice  when  the   reason  for  a  default  termination  is  the
   contractor's  failure to  make  delivery  of  supplies,  and  the
   Government  became entitled to terminate the entire contract when
   appellant  inexcusably missed  the delivery  date  for the  first
   increment.")   In this case,  the contracting officer  did notify
   the contractor  in writing numerous  times of the  possibility of
   termination,  and requested  General Cutlery  to  show cause  why
   contract items should  not be terminated for default.   Thus, the
   Government did more  than was required in giving  General Cutlery
   every chance to avoid default. 
 
        Finally, we  note  that the  volume of  purchase orders  for
   paring knives  listed  by GSA  as  due in  December  of 1994  was
   29,520,  more  than  the 20,880  per  month  General  Cutlery had
   committed  to supply  pursuant to  the  monthly supply  potential
   clause.  The record does not reflect whether any of the defaulted
   purchase orders were extensions from earlier months, and thus not
   applicable  to  General Cutlery's  monthly supply  commitment for
   December  of 1994.  In  any event, a contractor's non-performance
   of orders in  excess of its monthly supply  commitment is excused
   under the Termination for Default clause only when the contractor
   has  returned the  order to  the  Government as  required by  the
   clause.   See Camrex Reliance  Paint Co., GSBCA 5771-R,  82-1 BCA
     15,737, at 77,855.   There is no evidence  that General Cutlery
   rejected any of  the terminated paring  knife purchase orders  in
   excess of its  monthly supply commitment for that  item.  General
   Cutlery was  aware of  its rights under  that clause;  during the
   preceding  May,   General  Cutlery  requested  a   delivery  date
   extension  of thirty  days for  two purchase  orders because  the
   volume of orders exceeded 125% of the  monthly supply commitment.
 
 
          
                                Decision
 
        GSA's  termination for  default  is  sustained, and  General
   Cutlery's appeal is DENIED.
   ________________________________
 
                                      ANTHONY S. BORWICK
                                      Board Judge
 
   We concur:
 
   _______________________________
   ________________________________
   STEPHEN M. DANIELS                 MARY ELLEN COSTER WILLIAMS
   Board Judge                        Board Judge