GRANTED:  May 17, 1994
                                                  
 
 
                           GSBCA 11541, 11557
 
 
                         A.J.C.A. CONSTRUCTION,
 
                                               Appellant,
 
                                  v.
 
                    GENERAL SERVICES ADMINISTRATION,
 
                                               Respondent.
 
        R. K.  Jonrowe, President of A.J.C.A.  Construction, Austin,
   TX, appearing for Appellant.
 
        Leigh Ann Holt, Assistant Regional Counsel, General Services
   Administration, Denver, CO, counsel for Respondent.
 
   Before Board Judges HENDLEY, WILLIAMS, and GOODMAN.
 
   WILLIAMS, Board Judge.
 
        Appellant,  A.J.C.A.  Construction  (AJCA),  challenges  the
   termination  for default  of  contract number  GS-07P-89-JXC-0139
   with respondent,  the General Services Administration  (GSA), and
   the    assessment   of    $20,041    in   excess    reprocurement
   costs.[foot #] 1         The   parties   elected   to   waive   a
   hearing and present  their cases on the record.   For the reasons
   stated below, the appeals are granted.
 
                            Findings of Fact
 
        On  December 15, 1989, respondent issued invitation for bids
   (IFB)   number   GS-07P-89-JXC-0139  for   the   installation  of
   scientific equipment in Building 56 of the Denver  Federal Center
   in  Lakewood, Colorado.   The equipment consisted  of nine growth
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 1     These  appeals were  filed on  October 22 and
   October 28,   1991,  and   on   December 18,  1991,   the   Board
   consolidated these appeals.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   chambers and two  roof-mounted condensing units furnished  by the
   Government.[foot #] 2            Appeal      File,     Exhibit 1.
   Additional  work  included  moving the  equipment  from  storage,
   cutting a hole in the  roof, removing a tile floor, cleaning  the
   concrete  floor, painting  exposed surfaces,  and installing  and
   testing the piping for the equipment.  Id.
 
 
        Respondent  received thirteen bids  in response to  the IFB.
   Appeal File, Exhibit 4.  Appellant's bid  of $24,198 was low, and
   the      other     bids      ranged      from     $33,890      to
   $76,480.[foot #] 3     Id.     GSA's   estimate   for  the   work
   was  $49,759.  Respondent's Brief, Attachment 2.   At the request
   of  the  contracting  officer,  appellant  verified  its  bid  on
   January 24,   1990.    Appeal  File,  Exhibit  5;  Deposition  of
   Contracting  Specialist  Diane Railsback  (Railsback  Deposition)
   (May 20, 1993) at 4.
 
        Although GSA personnel initially believed AJCA's bid was too
   low, they discussed this with  AJCA's president and concluded the
   bid was current and realistic.  The Government's award memorandum
   states in pertinent part:
 
        (6)   Necessary  organization, experience,  operational
        controls,  and   technical  skills   (FAR  9.104-1(e)).
        Basis(es) for determination.
 
        In reviewing Standard  Form 1419, Abstract of  Offers -
        Construction,  Attachment   #4,  it   appears  A.J.C.A.
        Construction missed a  major element of the  project as
        their  bid is  $25,561  or  49%  below  the  government
        estimate and $9,692  or 29% below the next  low bidder.
        Tom Birlson,  Design and  Construction, discussed  this
        project  in   detail   with   Mr.   Jonrowe,   A.J.C.A.
        Construction, as Mr. Birlson was involved in the design
        phase and was concerned that  A.J.C.A. Construction did
        not consider  all elements  of this  project.   Through
        discussions,  it was discovered  that the major element
        in  question   was  the  electrical  equipment   to  be
        purchased  and  installed  by  the  contractor.     The
        government  estimate for  the electrical  equipment was
        based   on  the   Means  Estimating  Guide,   which  is
        historically high,  in  lieu  of  obtaining  commercial
        current pricing.   The government's equipment estimates
        for the  transformer, 3/0  wire and  main breaker  were
        compared  with  the   estimates  A.J.C.A.  Construction
        obtained  for bidding purposes.   This resulted  in the
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 2     The growth chambers  are approximately 8'4" x
   3'4" x 6'8" and weigh 1,355 pounds each.  Appeal File, Exhibit 1.
 
        [foot #] 3     The  other   bids  were:   $33,890,  $35,400,
   $36,300, $42,914,  $43,257, $49,263,  $49,410, $50,995,  $52,000,
   $57,700, $59,360, and $76,480.  Appeal File, Exhibit 4.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        understanding  that   A.J.C.A.  Construction   received
        competitive,  current,  commercial pricing  instead  of
        using  book reference prices.   Mr. Jonrowe  did verify
        his prices again  with his suppliers to be  assured his
        prices were accurate  and verbally verified his  bid to
        Mr. Birlson and commented he  was willing to go to work
        as  soon as possible.   Based on  the foregoing, actual
        quoted prices received by  A.J.C.A. Construction versus
        Means  Estimating Guide estimates,  it appears that the
        former is more current and realistic.  Accordingly, all
        of the elements  listed above for  this item have  been
        satisfied. . . .
 
   Appeal File, Exhibit 40 at 11th unnumbered page.
 
        On February  15, 1990,  respondent awarded  the contract  to
   AJCA in the amount of $24,198.  Appeal File, Exhibit 6.
 
        The Default clause provides:
 
        (a) If the Contractor refuses or fails to prosecute the
        work or  any separable  part, with  the diligence  that
        will insure its completion within the time specified in
        this  contract including  any  extension,  or fails  to
        complete the work within this time, the Government may,
        by  written notice  to  the  Contractor, terminate  the
        right to proceed with  the work (or the separable  part
        of  the work) that has been delayed.  In this event the
        Government may take  over the work  and complete it  by
        contract . . . .  The Contractor and its sureties shall
        be  liable for any  damage to the  Government resulting
        from the  Contractor's refusal or  failure to  complete
        the work within the specified  time, whether or not the
        Contractor's  right  to   proceed  with  the   work  is
        terminated.    This  liability  includes any  increased
        costs  incurred  by  the Government  in  completing the
        work.
 
   Appeal File, Exhibit 1; 48 CFR 52.249-10 (1984)  (FAR 52.249.10).
 
 
 
        The Excusable Delays clause states:
 
        (a)  Except for defaults of subcontractors at any tier,
        the Contractor shall  not be in default  because of any
        failure to perform this contract under its terms if the
        failure arises  from  causes  beyond  the  control  and
        without  the  fault or  negligence  of  the Contractor.
        Examples  of these  causes are  . . .  (2) acts  of the
        Government  in  either  its  sovereign  or  contractual
        capacity,  . .  .    In each  instance  the failure  to
        perform  must be  beyond the  control  and without  the
        fault  or  negligence  of the  Contractor.    "Default"
 
        includes failure to make progress  in the work so as to
        endanger performance.
 
   Appeal  File, Exhibit 1.   The contract also  contains a Disputes
   clause which includes the following provision:
 
        (h)  The  Contractor   shall  proceed  diligently  with
        performance of this contract,  pending final resolution
        of any  request for  relief, claim,  appeal, or  action
        arising under or  relating to the contract,  and comply
        with any decision of the Contracting Officer.
 
   Appeal File, Exhibit 1; FAR 52.233-1. 
 
        GSA  issued a notice  to proceed on March  5, 1990, and work
   was to commence on March 15 and be completed in 100 days, i.e. by
   June 14, 1990.   Appeal File, Exhibit 7;  Railsback Deposition at
   4.  
        On May 9,  1990, the Government's management  and inspection
   contractor met with  AJCA's superintendent and  AJCA's electrical
   subcontractor  and  inspected   the  Government-furnished  growth
   chamber and  condensing equipment.   The construction  engineer's
   daily diary reflects his findings:
 
        . . . One condenser has 2 motors rated 7.2 amp  max and
        the other  condenser has 3 motors rated  10.8 amps max;
        all motors are single phase 208/230 volt, in parallel.
 
        The condenser name  plate AMP ratings exceed  the panel
        "P" breaker normal operating range during  starting due
        to the  single phase motors  supplied.   The  single 20
        AMP  breaker  in the  panel  is sized  for  three phase
        motors.    Each  condenser unit  should  be  separately
        protected by  a  15 amp  max  fuse size  per  nameplate
        rating.     Also-there  are   no  start-stop   controls
        furnished or shown for either condenser. . . .
 
        Note:  The 112.5 kva main transformer on [drawing] E2-4
        must handle  114.56 kw (panel  "P") plus 9.6  kw (panel
        "L1-5") per design.
 
   Appeal File, Exhibit 40 at 44th-45th unnumbered pages.
 
        On May 14, 1990, GSA's construction engineer received a call
   from  the  manufacturer  of the  growth  chamber  who recommended
   "automatic shutdown  of condensers via  interlocking each  growth
   chamber  via a  relay contact  to  a [corresponding]  condenser."
   Appeal  File,   Exhibit 40  at   43rd  unnumbered   page.     The
   manufacturer's  representative  "[did]  not recommend  an  on-off
   switch since the condenser could be shut off in error."  He "also
   advised that each condenser 208/volt motor has an overload, built
   in, and  there  are no  automatic  temperature controls  or  flow
   controls associated with the condenser."  Id.  GSA's engineer was
   advised  by GSA's  project manager  and GSA's  consultant not  to
   proceed with any change order at this time.  Id.
 
 
        On  May 16, 1990, GSA issued request for modification number
   1 and  requested  appellant's  proposal by  May 24,  1990.    The
   modification originally  consisted of  two parts.   Appeal  File,
   Exhibit 2; Railsback Deposition at  5.  Part 1a required cleaning
   of a  concrete floor by  shot blasting.  Appeal  File, Exhibit 2.
   Part 1b requested  the  following electrical  revisions  for  the
   condensers:
 
        1.   Two 2-pole 15 amp single phase circuit breakers in
        main  panel.   Breaker  specified  is  3  phase and  is
        incorrect.
 
        2.   Provide  2  magnetic  starters  and  9  relays  to
        interlock 9  growth chambers  to 2  condenser units  as
        recommended  by  the  supplier  of  the  equipment   to
        automatically shut  off the condensers when  the growth
        chambers are shut down.
 
        3.   Hook up  controls per enclosed sketches and fasten
        wires on terminals of equipment.
 
        4.   Provide  starters and  relays  per enclosed  parts
        list.
 
        5.   Provide engraved plastic identification nameplates
        for starters and relays.  Fasten with 2 screws.
 
        6.   Test interlock sequence and show revised system on
        the project record drawings.
 
   Id.
 
        On May 24, 1990, appellant  submitted a bid of $1,466.52 for
   the work under part 1a  only.  Appeal File, Exhibit 2;  Railsback
   Deposition  at  5.   The  contract  specialist  testified in  her
   deposition as follows:
 
        [She]   was  told   by  [AJCA's  president]   that  his
        electrical  subcontractor  was  out  of  the   country,
        therefore, he could not submit a proposal  for Item 1-B
        even  after  the  Government encouraged  him  to  go to
        another electrical  subcontractor.   [AJCA's president]
        refused, therefore, [the inspection firm] requested him
        to submit a price on 1-A only so there would not be any
        delays on the project.
 
   Railsback Deposition at 5.
 
        On  May   25,  1990,  the  contracting   officer  authorized
   appellant to  perform the work  under part 1a, and  increased the
   contract amount to  $25,665.  Appeal File, Exhibit  2.  Appellant
   did  not request  an extension  of the  completion date  for that
   work.[foot #] 4  Id.  
 
        According to the construction engineer's daily diary, AJCA's
   president  called  the  Government's  management  and  inspection
   contractor on June 25, 1990, to discuss pricing for item 1b.  The
   daily diary entry for that day states:
 
        Discussed pricing  for item 1b on  C/R No. 1.   I urged
        [AJCA's president]  to  send price  for the  electrical
        work  since he was already past his contract completion
        date of 6-14-90.  [AJCA's president] said the prices he
        had obtained from electrical subs were high and  he was
        waiting  for "his"  electrician to return  from another
        job   before  submitting  a  price.    I  told  [AJCA's
        president]  to   send  price  to  GSA  FAX,  attention:
        [construction  engineer],  if  he  wanted  to.    Basic
        contract  work has not  been completed.   Contractor is
        due three days for cleaning floor on item 1a C/R No. 1.
 
   Appeal File, Exhibit 40 at 35th unnumbered page.
 
        Appellant's  superintendent  left  the jobsite  on  June 26,
   1990, and  returned to Texas.  Appellant contends that it did not
   vacate the  jobsite, but left  the jobsite with the  intention to
   return  because  modification  1b  was  still  being  negotiated.
   Appellant states:
 
        At  the time we paused  in working on  the job the work
        remaining was over 90% electrical and the work proposed
        by Modification PS01-1b was 100% electrical.  If we had
        called  the electricians back to do as much as possible
        without  affecting  the work  of  Modification PS01-1b,
        they would have been there only a few days and then  we
        would  have  had  to  send  them  away to  return  when
        negotiations were settled on Modification  PS01-1b.  We
        would then have had  to suffer additional  mobilization
        cost  to  get  the electricians  back  to  complete the
        remaining electrical work.
 
        The work  of proposed  Modification PS01-1b  was not  a
        separate item  that was  to be merely  added on  to the
        work of  the contract like  an appendage.  It  was work
        that was to substantially change the electrical portion
        of  the  original contract.    If we  had  proceeded to
        complete the  work of  the contract  without regard  to
        proposed Modification PS01-1b  and Modification PS01-1b
        had then gone  forward we  would have  had to  demolish
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 4     Although  appellant  did not  request  a time
   extension, the  contracting  officer  subsequently  extended  the
   contract completion date  by three days from June 14  to June 17,
   1990,  in the  termination  for  default  letter.   Appeal  File,
   Exhibit 11.   
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        much of the  work we would have done  in completing the
        original   contract.    It  was  our  belief  that  the
        government would  not have  paid for  the rework  since
        they were already extremely dissatisfied with the extra
        costs being proposed without such rework.
 
   Letter from Appellant to the Board (Nov. 30, 1993).
 
        Appellant further explained why AJCA left the jobsite:
 
        By contract I was not allowed to unilaterally raise the
        price of  the contract  and I was  also not  allowed to
        change  the ultimate intended  function of the  work of
        the  contract.  After it  had been established that the
        change in question would change the [useability] of the
        work product of the contract,  it was obvious that  the
        change had to be decided for or against by the users of
        the facility  we were working on and by the contracting
        officer.  Since the work  of the change in question was
        directly in the critical  path of the remainder  of the
        work of  the  contract  it  was impossible  for  us  to
        continue  without  the  direction  of  the  contracting
        officer.   This decision, if  made wrongly by us, could
        have resulted in our possibly  not getting paid for the
        extra work in question and could also  have resulted in
        our  having to  redo  and  reverse  the extra  work  in
        question.
 
   Appellant's Answer to Interrogatory No. 4.
 
        On June 26, 1990,  the contracting officer sent a  letter to
   appellant stating that liquidated damages of $30 per day had been
   accruing  since  the  June 14,  1990,  original  completion date.
   Appeal    File,   Exhibit    8.[foot #] 5       The   contracting
   officer  gave  appellant  until  July 6,  1990,  to  explain  any
   excusable delays.  Id.  Appellant did not respond to this letter.
   Railsback Deposition at 7.
 
        On  June  28,  1990,  the  contract  specialist   telephoned
   appellant  to discuss  appellant's  failure  to  submit  a  price
   proposal  for modification  1b.   Appeal  File, Exhibit  9.   The
   contact record prepared by the contract specialist concerning her
   conversation with AJCA's president states:
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 5     On June 8, 1990,  appellant submitted invoice
   number four in which it represented that the total work completed
   to  date  was   66.65%  of  the  contract.     Appellant's  First
   Supplemental Response to Respondent's  Request for Production  of
   Documents.  On June 14, 1990, respondent paid that invoice.  Id.;
                                                                ___
   Appellant's Response  to  Interrogatory No.  9.   More  work  was
   completed between June 8,  1990, and June 26, 1990.   Appellant's
   Response to Interrogatory No. 9.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        [AJCA's  president]  returned  my call  from  this A.M.
        Subject  of discussion was  the price proposal  on CR#1
        Item 1b electrical.  Issued to [AJCA] May 16, 1990, due
        May 24,  1990.  To  . . . date,  [the] proposal has not
        been submitted.   [AJCA's president] talked my  ear off
        for 45 minutes  w/excuses,  but  no  substance  of  why
        proposal  not submitted.  Claimed he mailed proposal 6-
        27-90, not FAX as requested in the amount $5,580, w/o a
        breakdown of costs.  I set a suspense date of 7-2-90 to
        get  the breakdown  to us  to commence  [negotiations].
        [AJCA's  president]  confirmed the  superintendent  has
        returned to [Texas] as of yesterday.  Will fly him back
        up  to complete job  after [negotiations] &  CO issued.
        Informed [AJCA's president] he is in liquidated damages
        since 6-14-90; again full of  excuses.  I tried several
        methods  to motivate [AJCA's president] to no avail, as
        he would come up with more excuses, with no validity.
 
        Suspense: 7-2-90.
 
   Appeal File, Exhibit 9 at 6th-7th unnumbered pages.
 
        Appellant  submitted  two bids  on  part 1b.    Appeal File,
   Exhibit 9.  The first, dated June 25, 1990, which had been mailed
   to  the contract  specialist, was  in the  amount of  $6,044, and
   requested  a  30-day  extension  of  the  completion  date.   Id.
   Appellant's second bid, dated June 29, 1990, was in the amount of
   $4,919, and also  requested a 30-day extension  of the completion
   date.  Id.   Appellant's second bid was  transmitted by facsimile
   to the Government's consultant on July 2, and was received before
   the first  bid.    Id.;  Respondent's  Brief  at  9;  Appellant's
   Response  to Request  for Admission  No. 17.   Appellant  did not
   submit  a cost  breakdown for  either of  its bids.   Appellant's
   president  claims that during negotiations on modification 1b, he
   was told "not  to bother submitting a cost  breakdown unless [he]
   lowered [his] price significantly."  Letter from Appellant to the
   Board (Aug. 16, 1993) at 3.  Appellant's president continued:
 
        When  we answered  the  letters regarding  default  the
        letters  were apparently  intentionally  lost and  [the
        contract  specialist]  had  clear  sailing  right  into
        dealing  with  us   with  dispatch.     [The   contract
        specialist] and I  had a personality conflict  from the
        beginning of  our  relationship when  she  returned  my
        first invoice without even  a phone call forcing me  to
        go  over her  head  to get  immediate  approval of  the
        invoice  by the  Contracting Officer  in  spite of  her
        fervent objection.
 
   Id.
 
        The Government did not contact appellant regarding its offer
   for part 1b until July 13, 1990.   Then, by letter dated July 13,
   1990,  the   contracting  officer  advised  appellant   that  the
   Government was considering terminating  the contract for  default
   for  failure  to  perform the  contract  within  the time  limits
   provided.   Appeal  File,  Exhibit 10.   In this  July 13 letter,
   respondent also  withdrew its  request for a  price proposal  for
   part 1b of  modification PS01 stating "the additional  work is no
   longer required."   Id. at 3.  The electrical work under 1b would
   have changed some of the electrical work  originally required and
   was necessary  for the  growth chambers to  be operable.   Appeal
   File,  Exhibits 2,  29, 40;  Letter from  Appellant to  the Board
   (Nov. 30,  1993); Board  Conference Memorandum  (Nov. 10,  1993).
   The July 13 letter further stated:
 
 
        On  June  26,   1990,  you  were  notified   that  your
        performance time  had past  and that  damages would  be
        assessed.    You  were  given until  July  6,  1990  to
        document  any  delays  that  you  felt   would  justify
        additional time being added to the contract performance
        period.   You have failed  to respond and  provide said
        documentation.
 
        Also,  on June  26,  1990, your  superintendent  . .  .
        vacated  the jobsite  and  no  further  work  has  been
        completed  on  the  contract.   Prior  to  vacating the
        jobsite, [your superintendent] had continued to install
        materials  and  construct  details  that  are  not   in
        accordance  with  the   specifications  e.g.,  he   was
        observed brazing  refrigerant piping without  inert gas
        which cannot provide  an acceptable joint.   It appears
        that [your superintendent]  lacks the requisite  skills
        in  this field.   This matter was  previously discussed
        with him at the beginning of the project.
 
        We  have been apprised,  by our inspector,  of numerous
        work elements  that  remain  incomplete  on  your  base
        contract.  These items are provided only to apprise you
        of the  deficiencies and  is not to  be construed  as a
        comprehensive list:
 
         1.  Level chambers
         2.  Rework refrigeration/piping
         3.  Level the condenser/roof isolation pads
         4.  Install lighting (available in Denver)
         5.  Provide electrical power to the condenser
         6.  Install electrical transformer
         7.  Connect the growth chamber electrical
         8.  Freon charge
         9.  Rework curb
        10.  Install traps in hot gas lines
        11.  Thread conduit installed on the roof
        12.  Final clean up
 
   Appeal File,  Exhibit 10 at  1-2.   The letter also  stated: "The
   above listed work  elements [represent] approximately 20%  to 25%
   of  your base  contract which  equates to  approximately 130  man
   hours."  Id. at 2.
 
 
        Finally, the  contracting officer asked  AJCA's president to
   contact  the  contract  specialist  via  telephone  with  written
   confirmation   "[i]f  it  is  your  intention  to  complete  your
   contractual  obligation."     Appeal  File,   Exhibit 10  at   4.
   Appellant  did  not   respond  to  the  July 13,   1990,  letter.
   Appellant's  president claims  he was  on vacation when  the show
   cause  letter was issued and that  he did not have an opportunity
   to  prepare a  response before  receiving  the final  termination
   notice.  Appeal File, Exhibit 29.
 
        On August 1,  1990, the contracting  officer issued a  final
   decision terminating the contract for default stating:
 
        The  determination to issue  this Notice of  Default is
        based  upon A.J.C.A.'s  failure  to complete  the  work
        within the time specified in  this contract . . . which
        specifically states  '...(c) Complete  the entire  work
        ready for  use not later  than 100 calendar  days after
        the  contractor receives the notice to proceed...'  The
        notice   to  proceed  was  issued  to  you  during  the
        Preconstruction Conference  on  March  5,  1990,  which
        established June  14, 1990 as  the contract  completion
        date.  An additional 3 calendar days is hereby granted,
        which is attributable to Change Order Number PS01, Item
        1a, and reestablishes  the contract completion date  as
        June 17, 1990.
 
   Appeal File, Exhibit  11 at 1.   The  letter further provided  in
   pertinent part:
 
        On June 26, 1990, your superintendent . . . vacated the
        jobsite  and no  other work has  been completed  on the
        contract.
 
        . . . .
 
        On  July 13,  1990,  GSA  issued  a  letter  requesting
        A.J.C.A.  to show cause why  its contract should not be
        terminated, plus numerous  other issues.   No  response
        has been received from your firm to this date.
 
   Id. at  2.  The  contracting officer also  noted that on  May 23,
   1990,  the  Government's  inspector  issued  a  letter  informing
   appellant that some  of the  piping work  was unsatisfactory  and
   that    certain     joints    and     piping     had    to     be
   replaced.[foot #] 6       Id.        The   contract    specialist
   testified that AJCA was terminated for default because it vacated
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 6     The Government inspector's  May 23 letter  is
   not in the record.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   the  jobsite  and did  not  respond  to  the show  cause  letter.
   Railsback  Deposition at  7.    AJCA was  never  directed by  the
   contracting  officer to  stop work.   Id.   The  contract account
   contained $8,509  at the time  of the termination.   Appeal File,
   Exhibit 27. 
 
 
        By  letter dated August 13, 1990, appellant responded to the
   default termination letter.  Appellant stated in pertinent part:
 
        The  failure to complete  within the time  specified is
        attributable  to the  government's  delay of  the  work
        relative to time spent and days lost in negotiation and
        completion of  modification 1a  and to  time spent  and
        days lost in negotiation of modification 1b.
 
        3.  We temporarily left the jobsite inactive because we
        were unable to reach an accord with the government over
        the modification of the switching equipment and we were
        unable to  proceed further  until the  modification was
        settled.  This  inability on our  part to continue  the
        work was  directly  attributable  to  the  government's
        failure to  process the  subject modification within  a
        reasonable amount  of time and  was due to no  fault on
        our part.   The  work involved  in modification  1b was
        integral  to the work  of the basic  contract.  Nothing
        more could be  done until it  was established that  the
        work of the modification would or would not take place.
 
        In   initial   negotiations  with   [the   government's
        consultant]  we had presented  the government  with our
        subcontract  bids received  by us  from various  Denver
        electricians and those  bids had been rejected  by [the
        government's  consultant] for  being  too  high in  his
        opinion.   In fact we were  told that the  bids were so
        high that there was no need to present them in writing.
        [The government's  consultant] expressed the  view that
        we  should use  the  subcontractor  who  had  done  the
        electrical  work  on the  main  job since  he  was very
        reasonably  priced  and  would  therefore  probably  be
        willing to do the work of modification 1b for much less
        than other subs seem to be willing to do it for.  After
        a mutually  agreed upon delay  while waiting for  a bid
        from  the  electrical  subcontractor who  had  done the
        first part  of the  work (who was  out of  town at  the
        time), and then waiting for  the return to town of [the
        government's     representative]     in     preliminary
        negotiations, we  were subsequently  unable to  get our
        subcontractor on site to discuss the work and  we again
        turned to our subcontract bids which the government had
        previously rejected.  This time we submitted our bid in
        writing   rather   than   verbally   to   prevent   any
        misunderstanding  about what  was actually  transpiring
        between  my  company  and  the  government.    After  a
        subsequent month  of waiting for a  government response
 
        we were  abruptly notified  by mail  that there  was no
        longer  a  need  for  the  modification  and  that  the
        contract  was being considered  for default.   No phone
        calls  had been made  by the government  to my company.
        No warning  of any  sort was issued.   When  the letter
        warning of possible  default came in I was  out of town
        on  vacation and  by the  time  I read  the letter  and
        started  to formulate a response I had already received
        the notice of default.   All of this took place between
        the third week of July and the first week  of August. .
        . .
 
   Appeal File, Exhibit 29 at 2nd-3rd unnumbered pages.
 
        The  Government   did  not  receive  appellant's  letter  of
   August 13,  1990,   until   October 10,  1991.     Appeal   File,
   Exhibit 32.  Appellant  claims that its August 13,  1990, letter,
   which it  termed an  appeal of the  termination for  default, was
   forwarded to  GSA's Denver  facility and was  either lost  in the
   mail    or   lost   at   GSA   Denver.[foot #] 7   Appeal   File,
   Exhibit 39.   Appellant submitted that  letter to  this Board  on
   October 23, 1991, when it filed appeal of the default termination
   with the Board.  Id.
 
        On August 20, 1990, Conviron, the manufacturer of the growth
   chambers, issued  a report  to the Bureau  of Reclamation  on the
   damage done to the nine  growth chambers which had been installed
   by AJCA.  Respondent's Brief,  Attachment 5.  That letter advised
   that the damage appeared to  be only cosmetic and not structural.
   Id.  The letter further stated:
 
        On the installation,  the piping appears to be close to
        complete.  The welding looks quite acceptable.  I would
        recommend  changing the trap  on the hot  gas discharge
        lines to  the condenser.   Some of them are  very large
        and could  accommodate a lot  of oil. .  . .   The roof
        mounted condensers are  two multi-circuited Bohn units.
        They don't appear  to be leveled  properly and are  not
        sitting   on  isolation   or   fastened  down.      The
        refrigeration lines from the units are not hooked up to
        the   condensers  yet   but  the  quick   connects  are
        installed.   One set of  lines is not  piped correctly.
        This has to be changed.  The shader valves on the other
        quick connect located in the growth chambers don't have
        any valves  cores or caps.  Since they have to be taken
        out when the quick connects  are welded to the piping I
        presume they have been lost  and need to be replaced. .
        . .
 
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 7     The letter was addressed to: General Services
   Administration, Building 41,  Denver Federal  Center, Denver,  CO
   80225-0546.  Appeal File, Exhibit 29.
 
                   ----------- FOOTNOTE ENDS -----------
 
 
 
        The electrical is  not as complete as the  piping.  The
        wire has been pulled from a central location to all the
        chambers but  no connections  have been  made on  other
        end.  The wires have  not been identified as to phases,
        neutral or ground.  (all wires are black).
 
        Although there is a conduit through the roof, no wiring
        has  been  done  on  the  condensers.    Loop  wire for
        communications  between Conviron  data  logger and  the
        chambers has not been run nor have provisions been made
        for it.
 
   Id. at 4.
 
        By  letter dated August 28, 1990, Conviron submitted a total
   price  of  $1,861.85  to  perform the  repairs  described  in the
   August 20 letter.  Respondent's Brief, Attachment 5.
 
   The Reprocurement Actions
 
        Respondent initiated a reprocurement action on September 27,
   1990, by issuing request for proposals number GS-07P-90-JXM-0144.
   Appeal File,  Exhibit 12.   GSA estimated  the remaining  work to
   cost  $16,504.   Letter from  Respondent to  the Board  (Nov. 30,
   1993),  Exhibit  A.    The  contracting  officer  followed  small
   procurement procedures for procurements  estimated below $25,000.
   Respondent's Brief, Attachment 3; Railsback Deposition at 8.  GSA
   solicited offers from  four potential offerors, and  three offers
   were received in  the amounts of  $30,515, $48,200, and  $52,040.
   Letter from Respondent  to the Board (Nov. 30,  1993), Exhibit C;
   Appeal  File, Exhibit 13.    Respondent's  negotiations with  the
   three  bidders failed to lead to  an offer under $25,000.  Appeal
   File, Exhibits 17-19; Railsback  Deposition at 9.   Therefore, on
   October 22,  1990,  the contracting  officer  canceled the  small
   purchase procurement action.  Appeal File, Exhibit 20.  
 
        Respondent then revisited its estimate for the reprocurement
   work and increased that estimate to $30,000.  Respondent's Brief,
   Attachment  4;  Letter  from Respondent  to  the  Board (Nov. 30,
   1993).    Respondent  began  a  second  reprocurement  action  on
   November  15, 1990,  with the  issuance of  request  for proposal
   number  GS-07P-91-JXC-0022.   Appeal  File,  Exhibit  21.    This
   solicitation  requested a "Base Bid" and an "Alternative Additive
   Bid."   As part  of the Base  Bid, the solicitation  required the
   contractor to:
 
             Furnish  all labor,  tools, equipment,  materials,
        machinery,  transportation and  supervision to  perform
        all work in  strict accordance with the  specifications
        and   drawings   for   Request   for  Proposal   Number
        GS-07P-91-JXC-0022, Project Number  A-CO-90-007, Growth
        Chambers, Building 56, Denver Federal Center, Lakewood,
        Colorado; but,  NOT including any  work under Alternate
        #1, which is listed separately below.  CAUTION: Bidders
 
        please   note   that   this   Request   for   Proposal,
        GS-07P-91-JXC-0022,  is  a  reprocurement  of the  work
        described  in   said  specifications;   and  therefore,
        certain  work required  by  the specification  has been
        accomplished  and only  that work  described herein  is
        required.    It is  imperative  that  the job  site  be
        inspected  to  ascertain  the scope  of  the  work that
        remains undone under  Request for Proposal,  GS-07P-91-
        JXC-0022.
 
             A.   Level presently  in place  Growth Chambers  -
        The  Contractor  shall  insure   that  all  the  Growth
        Chambers   are  sitting   level   in  accordance   with
        Specification Section 15743, Air  Cooled Condensers and
        Growth Chambers,  and Drawing 2-1, Drawing Title, Plans
        & Sections.
 
             B.   Rework presently in place Refrigerant Lines -
        Repipe those refrigerant lines that do not run parallel
        with  the building  lines and complete  the refrigerant
        system, to include  installation of  valves and  proper
        trap  sizes as required, plus test, charge and start up
        the  system  in accordance  with  Specification Section
        15530, Refrigeration  Piping, and Drawing  2-1, Drawing
        Title, Plans &  Sections.  Piping is to  be anchored to
        prevent excessive vibration.
 
             C.   Level all  presently in place  condensers and
        provide and  anchor isolation  pads in accordance  with
        Specification Section 15743, Air Cooled Condensers  and
        Growth Chambers, and Drawing  2-1, Drawing Title, Plans
        & Sections.
 
             D.   Rework  presently  in   place  roof  curb  in
        accordance with Specifications Sections 07511, Built-Up
        Asphalt Roofing System, and  07600, Flashing and  Sheet
        Metal,  Drawing 2-1, Drawing  Title, Plans  & Sections,
        Section 2, to insure a water tight installation.
 
             E.   Reposition   existing  Government   Furnished
        Equipment  as  shown on  Drawing  2-1 entitled  Drawing
        Title, Plans & Sections.
 
             F.   Electrical   work,    in   accordance    with
        Specifications   Sections   16010,   Basic   Electrical
        Requirements, thru 16535, Emergency Lighting . . . . 
 
   Id.,  Vol. 3, at  4-5.   Under the  Alternative Additive  Bid the
   solicitation required essentially the same electrical work as the
   work  described in  part 1b  of modification PS01.   Id.  at 6-8;
   Board Conference Memorandum (Nov. 10, 1993).
 
        On  November  19,  1990,  the  contracting  officer received
   approval  to utilize  procedures  for other  than  full and  open
   competition.   Appeal File, Exhibit 22.  The Government solicited
   seven local firms,  and received three offers:  $31,950, $51,368,
   and $404,800.   Appeal File,  Exhibits 22,  23.  On  December 14,
   1990,  GSA   awarded  the  reprocurement   contract  to  Treadway
   Construction  (Treadway) for $31,950.   Appeal File,  Exhibit 24.
   Of the  total $31,950  reprocurement price,  $28,550 covered  the
   remaining incomplete work from the original contract, and $3,400,
   the  Alternative Additive Bid,  consisted of the  electrical work
   from modification 1b  which had never been added  to the original
   contract.  Id.; Railsback Deposition at 8-9.
 
 
        Respondent  issued  the  notice to  proceed  to  Treadway on
   January 2, 1991, which  required all the work, both  the Base Bid
   and  the Alternative Additive Bid,  to be completed in forty-five
   days, by February 16, 1991.   Appeal File, Exhibit 25.   Treadway
   substantially completed the  contract work by February  15, 1991,
   and completed all work  by March 30, 1991.   Appeal File, Exhibit
   26.  Respondent made final payment to Treadway on April 18, 1991.
   Appeal File, Exhibits 26, 41.
 
        On October 1, 1991, the contracting officer issued  a demand
   letter to  AJCA  for $20,041.    Appeal File,  Exhibit  27.   GSA
   calculated the amount sought from appellant as follows:
 
         Reprocurement price        $ 31,950 
         Alternate not on original   - 3,400
           contract                           
                                    $ 28,550
         Funds transferred from      - 8,509
           original contract                  
 
               TOTAL DUE TO GSA     $ 20,041
 
   Id.
 
                               Discussion
 
        It is well  established that a termination for  default is a
   drastic  sanction which can only be imposed for good cause and on
   the basis  of solid  evidence.  J.  D. Hedin Construction  Co. v.
   United States, 408  F.2d 424,  431 (Ct.  Cl. 1969); The  Flooring
   Co., GSBCA 8297, 89-3 BCA   22,167, at 111,547 (citing Ed Grimes,
   GSBCA 7652(7345)-REIN,  et   al.,  89-1   BCA    21,528).     The
   Government has the burden of proving the propriety of the default
   termination  by  a   preponderance  of  the  evidence.     Lisbon
   Contractors,  Inc. v. United States,  828 F.2d 759,  763-65 (Fed.
   Cir.  1987);  The  Flooring  Co.,  89-3 BCA  at  111,547  (citing
   Air-O-Plastic Corp.,  GSBCA 4802,  et al.,  81-2  BCA    15,338).
   Respondent  has  terminated  AJCA's  contract   for  default  for
   essentially two reasons:   AJCA's abandonment of the jobsite when
   there was no  Government-caused delay and its  failure to respond
   to  the  show  cause  notice.     Respondent's  Brief  at   7-12.
   Respondent has not met its burden of proving that the termination
   for default was justified.
 
        To prove  abandonment the  Government must demonstrate  that
   appellant's  "words  or conduct  . .  . manifest[ed]  a positive,
   unequivocal  and unconditional intent not to perform the contract
   in any event, or at any time."  James W. Sprayberry Construction,
   IBCA  No. 2130,  87-1 BCA   19,645,  at 99,456.   Here,  both the
   contractor's  words  and  actions evinced  a  clear  intention to
   continue performance.
 
        On   June  25,  1990,   appellant's  president  advised  the
   Government's  management and  inspection contractor  that he  was
   waiting for "his" electrician  to return from another  job before
   submitting a price  on modification 1b because the  prices he had
   obtained  from other electrical subcontractors were high.  Appeal
   File, Exhibit  40.  That same  day appellant mailed its  offer on
   modification 1b to GSA.  Thus, when appellant left the jobsite on
   June  26,  its  first  offer   for  the  electrical  work   under
   modification 1b was pending.  Subsequently, on July 2,  appellant
   made a  second, lower  offer for  this same  work.   On  June 28,
   appellant's   president  spoke   with  the   contract  specialist
   regarding  modification 1b.  The Government's "contact record" of
   this conversation reflects appellant's intention to return to the
   job.  According to that record appellant's president said:  "will
   fly   [the  superintendent]  back   up  to  complete   job  after
   negotiations and CO [change order] issued."  Appeal File, Exhibit
   9 at 6th unnumbered page.
 
        On the  date the show  cause notice was  issued, appellant's
   offer  on modification  1b was  pending and  the parties  were in
   essence negotiating.  Delfour, Inc., VABCA 2049, et al., 89-1 BCA
     21,394, at 107,858 (when the  parties are engaged in a dialogue
   and  Government is aware  that work ceased  pending resolution of
   the  dialogue Government has  an obligation to  affirmatively cut
   off  that dialogue  and put  contractor  on notice  that it  must
   proceed   or  face  the  consequences  of  default);  Marine  and
   Industrial Insulators, Inc.,  VABCA 2499, 88-3  BCA   21,120,  at
   106,633.   During  this  period  of  so-called  abandonment,  the
   Government could  have informed appellant  that it was  no longer
   considering appellant's offer on modification 1b and unilaterally
   directed appellant  to proceed, but  it did not.   Moreover, this
   was a  small job  and not the  type of  project which  would have
   warranted  a  contractor   to  remain  on  site   while  awaiting
   directions from the  Government.  Thus, considering  the evidence
   as a  whole,  appellant's departure  from the  jobsite while  its
   offer   on  modification  1b  was  pending  does  not  constitute
   abandonment or justify a termination for default.
 
        Nor can the default  termination be justified on  the ground
   that appellant  failed to  proceed with the  remaining work  in a
   timely  fashion.  Appellant has demonstrated that proceeding with
   the remaining contractual  work before the Government  decided on
   modification  1b would have  been commercially  impracticable, if
   not altogether senseless.  Modification 1b changed the electrical
   work  originally required;  it required  starters  and relays  to
   interlock the nine growth chambers  to the two condenser units as
   well  as the  hook-up of controls  and the fastening  of wires on
   terminals,  inter alia.   Appeal  File, Exhibit  2.   This change
   affected the  useability of the  growth chambers.   Appeal  File,
   Exhibit  40.   Appellant contended,  and  the Government  did not
   refute,  that the  work  in  modification 1b  was  in the  direct
   critical path of the work remaining to be done.  See Respondent's
   Response to Appellant's Initial Record  Submission at 2.  Had the
   remaining work been completed and the work under modification  1b
   later been  ordered, at  least some of  that original  work would
   have    been    rendered    useless.[foot #] 8        Appellant's
   Answer  to  Interrogatory No.  4; Letter  from Respondent  to the
   Board (Nov. 30, 1993); Appellant's Initial Record Submission.
 
 
        Finally,  under the unusual  circumstances of this  case, we
   conclude that  appellant's failure to  respond to the  show cause
   notice did  not warrant termination.   The show cause  notice was
   issued on July  13, at a time when  appellant reasonably believed
   the Government  was considering its  offer on modification  1b --
   which had  been submitted on  July 2.   The Government  never did
   negotiate with  appellant on  that offer.   Instead, in  the show
   cause  notice respondent advised appellant for  the first time it
   no longer required the work under modification 1b.  Then, when it
   did not receive  a response to the show  cause notice, respondent
   immediately terminated appellant's  contract.  In fact,  the work
   under  modification  1b  was  still  needed  and  was,  in  fact,
   reprocured along with some of the remaining work.
 
        Under these circumstances, appellant's failure to respond to
   the show cause notice is an insufficient ground for upholding the
                                                                    
                   ----------- FOOTNOTE BEGINS ---------
 
        [foot #] 8     Ultimately    the    work    required   under
   modification 1b was reprocured  separately under "Alternate 1" of
   the  reprocurement solicitation.  The Government's management and
   inspection contractor's  statement supports  appellant's position
   that the  remaining work  was in  the critical  path of  the work
   under modification 1b  and that part of the  remaining work would
   not have been  needed if modification  1b had been effected.   In
   its November 30, 1993, letter to the Board, respondent states:
 
        The  electrical work  required by Alternate  1 modified
        the  original contract by changing some of the required
        electrical work.  While the addition of the Alternate 1
        work made that  work necessary for the  growth chambers
        to  be  operable,  the cost  and  time  associated with
        performing  the  Alternate  1  work  could  be   priced
        separately.  In addition, the major  effect of the work
                     __________________________________________
        required  by Alternate 1  would have been  to decrease,
                   ----------- FOOTNOTE BEGINS ---------
        not  increase,  the  cost  of performing  the  original
                   ----------- FOOTNOTE BEGINS ---------
        remaining contract work  as part of the  remaining work
                   ----------- FOOTNOTE BEGINS ---------
        was no longer required.
        ______________________
 
   Letter from  Respondent to  the Board  (Nov. 30, 1993)  (emphasis
   added).
 
                   ----------- FOOTNOTE ENDS -----------
 
 
   termination   for  default.    As  our  appellate  authority  has
   recognized: "the default article of the contract does not require
   the Government to  terminate on a finding of  default, but merely
   gives  the procuring  agency the  discretion to  do so,  and that
   discretion must  be reasonably  exercised."   Darwin Construction
   Co. v. United States, 811 F.2d  593, 596 (Fed. Cir. 1987) (citing
   Schlesinger v. United States, 390 F.2d 702, 709  (Ct. Cl. 1968)).
   Here,  the Government  did not conclude  its negotiations  on the
   modification covering  work in the critical path of the remaining
   contract work until  it issued a show cause  notice regarding the
   termination for default.  Then, the Government claimed that it no
   longer needed the work in  the modification when in fact  it did.
   Finally,  the  Government  improperly  concluded  that  appellant
   abandoned the jobsite and terminated appellant's contract without
   giving appellant a  reasonable opportunity to return  to the site
   after advising that the modification  would not be effected.  The
   evidence, fragmented as it is, does not support a conclusion that
   the agency reasonably exercised its discretion in terminating the
   contract for default.
 
 
        Generally,   an   improper  default   termination   converts
   automatically  to a  termination for  convenience,  entitling the
   terminated  party  to   recover  its  termination-for-convenience
   costs.  Westinghouse Electric Corp. v. Garrett Corp., 437 F.Supp.
   1301, 1339  (D. Md. 1977), aff'd,  601 F.2d 155 (4th  Cir. 1979).
   Here,   awarding  such  costs  would  not  be  appropriate  since
   appellant was not without fault in bringing this situation about.
   Specifically, appellant did not respond  as promptly as it should
   have  to   the  requests   regarding  modification   1b  or   the
   Government's  letters  and  should  have  communicated  with  the
   Government when it left the jobsite.   Appellant was paid for the
   work  it  performed.    Under  the  circumstances,  it  would  be
   inequitable  to shift  any  termination-for-convenience costs  to
   respondent.  Dynelectron  Corp. (Pacific Div.)  v. United States,
   518 F.2d 594, 603 (Ct.  Cl. 1975); Insul-Glass, Inc., GSBCA 8223,
   89-1 BCA   21,361, at 107,675;  Big Star Testing Co., GSBCA 5793,
   81-2 BCA   15,335,  at 75,940-41, aff'd on  reconsideration, 82-1
   BCA   15,635, at 77,235-36.
 
                                Decision
 
        The appeals  are GRANTED.   The  termination for  default is
   converted to a  no-cost termination for convenience.   Respondent
   is not entitled to excess reprocurement costs.
 
                                      ____________________________
                                      MARY ELLEN COSTER WILLIAMS
                                      Board Judge
 
   We concur:
   __________________________         _________________________
   JAMES W. HENDLEY                   ALLAN H. GOODMAN
   Board Judge                        Board Judge