ARMED SERVICES BOARD OF CONTRACT APPEALS 
Appeal of --
Marshall's Electric, Inc. 
Under Contract No. FA4613-13-C-0011 
APPEARANCE FOR THE APPELLANT: 
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APPEARANCES FOR THE GOVERNMENT: 
ASBCA No. 59749 
Ms. Cynthia L. Marshall 
Secretary /Treasurer 
Col Matthew J. Mulbarger, USAF 
Air Force Chief Trial Attorney 
Lawrence M. Anderson, Esq. 
Trial Attorney 
OPINION BY ADMINISTRATIVE JUDGE DELMAN 
In this appeal Marshall's Electric, Inc., (appellant or MEI) disputes the 
termination of its contract for default by the Department of the Air Force 
(government). The parties agreed to waive an oral hearing and to present their 
positions on the record under Board Rule 11. We have jurisdiction under the Contract 
Disputes Act, 41 U.S.C. §§ 7101-7109. For reasons stated below, we deny the appeal. 
FINDINGS OF FACT 
1. On 27 June 2013, the government issued a solicitation for Repair Fire 
Protection/Detection Systems, Weapons Storage Area, at F.E. Warren Air Force Base, 
Wyoming (Item 0001 ). The project was targeted as a 100% small business set-aside. 
(Compl., ex. 1) 
2. The solicitation and the eventual contract included FAR 52.228-15, 
PERFORMANCE AND PAYMENT BONDS-CONSTRUCTION (OCT 2010). Block 12 of 
Standard Form 1442, "Solicitation, Offer, and Award," provided that these bonds were 
to be furnished to the government within 20 calendar days of award. The contract also 
contained FAR 52.249-10, DEFAULT (FIXED-PRICE CONSTRUCTION) (APR 1984). 
(Comp!., ex. 1 at 13) 
3. The government awarded Contract No. FA4613-13-C-0011 to appellant on 
25 September 2013. Accordingly, appellant was to furnish the bonds to the 

government no later than 15 October 2013. Appellant was to complete the project 
within 195 calendar days after receipt of notice to proceed. (Comp I., ex. 6)* 
4. We take judicial notice that between 1 October 2013 and 16 October 2013, 
there was a federal government shutdown. As a result of this shutdown, the offices of the 
Small Business Administration (SBA) were closed. According to appellant, this closure 
impacted the processing of its application for SBA bond guarantees (see generally 
13 C.F.R. § 115, Surety Bond Guarantee). However the record shows that appellant did 
not request the bonds from its surety and execute the necessary SBA fee authorization 
form until 11November2013 (compl., ex. 9), nearly one month after the government 
reopened and nearly one month after bonds were required to be furnished to the 
government. 
5. On 13 November 2013, MEI was notified by its surety that its bond request 
was denied due to outstanding claims related to its work as a subcontractor on a 
contract between the U.S. Army Corps of Engineers and Graham Construction 
Services at Minot Air Force Base, North Dakota (compl., exs. 11, 12). Appellant 
advised the government of this matter by email dated 14 November 2013, stating in 
pertinent part as follows: 
Until we can get this project closed out our bonding is on 
hold, which directly impacts our ability to bond this 
project. We apologize for the disruption this may cause for 
this project. 
(Compl., ex. 12 at 2) 
6. By memorandum dated 24 December 2013, entitled in part "Potential 
Termination for Default," the contracting officer (CO) issued a notice to appellant, in 
the nature of a notice to show cause, as follows: 
1. You are hereby notified that, since you have failed to 
provide bonding of subject contract in accordance with the 
contract terms (20 days following contract award), the 
Government is considering terminating the contract for 
default in accordance 
with FAR 52.249-10 "Default 
* The contract at Section F-Deliveries or Performance provided for a "winter 
exclusion" period prohibiting certain outdoor work between 1 October 2013 
and 30 May 2014 (R4, tab 1 at 7), absent written approval of the contracting 
officer. Thus the contract completion date was 9 December 2014 (R4, tab 8). 
Neither party contends however that this exclusionary period had any bearing 
on the default termination. 
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(Fixed-Price Construction)." Pending a final decision in 
this matter, it will be necessary to determine whether your 
failure to perform arose out of causes beyond your control 
and without fault or negligence on your part. Accordingly, 
you are hereby afforded the opportunity to present, in 
writing, any facts bearing on the question to the 
undersigned within thirty calendar (30) days after receipt 
of this notice. 
(Compl., ex. 15) 
7. Appellant replied to this notice by letter dated 7 January 2014. Appellant 
explained the nature of its problems on the Minot job and its attempt to obtain bonding 
on the subject contract. Appellant also stated as follows: 
Unfortunately, the government shutdown in October 
greatly impacted our bonding. Ifwe were able to submit 
our bonding request the first or second week of October, it 
would have been approved and the [subject] project would 
not have been impacted by the USACE Minot AFB 
project. 
In closing, we humbly request a 45 day grace period to 
obtain bonding. The USACE Minot AFB project will be 
completely closed out and all vendors/suppliers will be 
paid in full with final lien releases issued. We will await 
your decision. 
(R4, tab 6 at 24-25) Appellant has not provided any evidence to show that if it had 
submitted its bonding request in early October 2013, the bond request would have 
been approved and would not have been impacted by the Minot job. 
8. The government allowed the next 45 days to pass and did not default 
terminate the contract. Appellant did not obtain bonding within these 45 days, nor was 
the Minot project closed within these 45 days, nor was appellant able to represent to 
the government when the Minot project would close and when it would obtain 
payment and performance bonds for this project. 
9. By memorandum to appellant dated 15 April 2014, entitled "Show Cause," 
the CO again notified appellant of its failure to provide bonding as required by the 
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contract and that the government was considering a termination for default. The 
government gave appellant another opportunity to provide evidence excusing its 
failure to perform. (Compl., ex. 18) 
10. Appellant replied to the show cause notice by letter dated 28 April 2014. 
Appellant 
restated its attempt to obtain bonding, the impact of the government 
shutdown and its difficulties on the Minot job. Appellant stated as follows: 
With reference to the Minot, North Dakota project, we 
were a subcontractor and suffered losses directly relating 
to one of our direct subcontractor's failure. With this 
subcontractor we did not require bonding, [sic] if we 
would have required bonding this would have mitigated 
the losses we are now experiencing. The subcontractor 
failure has resulted in a lawsuit which is pending. 
We respectfully request that you consider not terminating 
for default. Many of the factors which led to our inability 
to produce bonding for this project were not within our 
control. We were prepare [sic] to perform this contract but 
due the mitigating factors outlined above were unable to 
obtain the necessary bonding. 
(R4, tab 6 at 6-7) (Emphasis added) 
11. By email dated 29 May 2014, the government sought an update from 
appellant on the bonding issue. Appellant replied by email on the same day, as 
follows: 
I apologize for my delay in responding. We are still 
working to get 
the Minot project closed out. Graham 
Construction [the prime contractor] is refusing to close out 
this project until the pending lawsuit with our failed 
subcontractor is resolved although Graham is not and 
never has been named in the suit. At this point in time, we 
are closing out other "pre-bonded" projects and our 
bonding company is stepping back until Minot can be 
completely closed out. 
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We firmly believe that ifthe government shut down would 
not have occurred we could have secured bonding for your 
project before the Minot project impacted our bonding. 
(R4, tab 6 at 5) 
12. By memorandum dated 22 September 2014, the government issued to 
appellant a "Notice of Default Termination." This notice stated in part as follows: 
(R4, tab 8) 
Your inability to receive bonding on the project prevented 
the government from issuing a notice to proceed, and the 
contract terms cannot be fulfilled. 
3. You received your copy of the contract on or about 
25 September 2013, thereby establishing 9 December 2014 
as the delivery date for Item 0001, and a deadline of 
20 days from contract award to provide the necessary 
bonding. 
4. After due consideration of all the pertinent facts, the 
undersigned Termination Contracting Officer hereby finds 
and determines that you have failed to complete the 
requirements of the subject contract within the time 
required by the terms thereof and that said failure did not 
arise out of causes beyond your control or without fault or 
negligence on your part. Therefore, you are hereby 
notified that the Government, by this written notice, 
terminates subject contract, including your right to proceed 
with performance there under [sic], in its entirety for 
default in accordance with Federal Acquisition Regulation 
52.249-10 "Default (Fixed-Price Construction)" 
April 1984, effective upon receipt of this notice. 
13. Appellant filed a timely notice of appeal from this termination decision on 
15 December 2014. 
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DECISION 
The government has the burden to prove that its default termination of this 
contract was justified. Lisbon Contractors, Inc. v. United States, 828 F .2d 759 (Fed. 
Cir. 1987). We believe that the government has met its burden here. 
Under paragraph (a) of the Default clause of the contract, FAR 52.249-10, the 
government may default the contractor if the contractor "fails to prosecute the 
work ... with the diligence that will insure its completing within the time specified in 
this contract." A contractor may not start work until it furnishes its bonds or other 
acceptable alternative payment protections to the government. FAR 28.102-1 ( c ). 
Appellant failed to furnish the required performance and payment bonds and failed to 
provide a date by which it would be able to do so. Perforce, it was unable to advise 
the government when it would be able to start the work on this project. This was 
tantamount to appellant's failure to prosecute the work with the diligence to insure 
timely completion, thereby establishing a ground for default in accordance with 
paragraph (a) of the Default clause. 
The burden then shifts to appellant to show under paragraph (b) of the Default 
clause that the default was excusable, i.e., that the contractor's delay arose from 
"unforeseeable causes beyond the control and without the fault or negligence of the 
contractor." Appellant points to the U.S. Army Corps of Engineers and/or the prime 
contractor on the Minot project as being responsible for its predicament. However, 
appellant's inability to obtain bonding on this contract was due to a dispute with a 
lower tier subcontractor on the Minot project that ended up in litigation and delayed 
the close-out of the project and impacted its bonding capacity (findings 5, 10). In 
correspondence with the government, appellant stated that it did not require bonding 
with this subcontractor on the Minot project and if it would have done so, it would 
have been able to mitigate its losses (finding 10). Given these facts, appellant has not 
shown that its inability to obtain bonding here was an unforeseeable cause that was 
beyond its control and without its fault or negligence. 
We have held a default excusable, however, where it has been shown that the 
government's wrongful action against a contractor on one contract was the cause of its 
financial difficulties on other contracts. R-D Mounts, Inc., ASBCA No. 14827 et al., 
71-1BCA'iJ8643, recon. denied, 71-1BCA'iJ8725; see generally JOHN CIBINIC, JR., 
RALPH C. NASH, JR., ADMINISTRATION OF GOVERNMENT CONTRACTS 571 (3rd ed. 
1995) (and cases collected). However, in Mounts the government acted wrongfully 
under an earlier contract with the contractor that subsequently impacted that 
contractor's other contracts with the government. Here, the earlier Minot contract was 
not a contract between the government and appellant. Appellant was a subcontractor 
on the Minot project (finding 10). The government's contractual duties flowed to the 
prime contractor on the Minot project, not to appellant. Appellant has failed to 
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establish a reasonable connection between any government violation of the prime 
contract at Minot, its flow-down effect upon appellant as a subcontractor and its 
inability to secure bonding here. 
Appellant also contends that its inability to secure bonding was attributable to 
SBA administrative delay in processing its application for SBA bond guarantees 
resulting from the government shutdown. Appellant's application was not timely 
filed; it was filed on 11 November 2013, roughly 45 days after award, and almost a 
month after the government reopened and nearly a month after the bonds were 
required to be furnished to the government (finding 4). Appellant does not provide 
any evidence linking any SBA administrative delay with the disputes on the Minot job, 
nor does it provide any evidence to support the proposition that its bonding request 
would have been approved absent the government shutdown. 
We have considered appellant's remaining arguments but they are not 
persuasive. Appellant has not shown that its default on this contract was excusable. 
Accordingly, we find that the government was justified in terminating this contract for 
default under the Default clause of the contract. In addition, a contractor's failure to 
provide performance and payment bonds is a breach of a condition that can support a 
default termination. Ruffin 's A-1 Contracting, Inc., ASBCA No. 38343, 90-3 BCA 
~ 23,243 at 116,626 (and cases cited). This is a separate and distinct ground for 
default termination. 
CONCLUSION 
The government has shown that its default termination of this contract was 
justified. We deny the appeal. 
Dated: 7 March 2016 
(Signatures continued) 
7 
ministrative Judge 
Armed Services Board 
of Contract Appeals 

I concur 
Administrative Judge 
Acting Chairman 
Armed Services Board 
of Contract Appeals 
I concur 
RICHARD SHACKLEFORD 
Administrative Judge 
Vice Chairman 
Armed Services Board 
of Contract Appeals 
I certify that the foregoing is a true copy of the Opinion and Decision of the 
Armed Services Board of Contract Appeals in ASBCA No. 59749, Appeal of 
Marshall's Electric, Inc., rendered in conformance with the Board's Charter. 
Dated: 
8 
JEFFREY D. GARDIN 
Recorder, Armed Services 
Board of Contract Appeals