Source: http://www.seidmanlaw.com/avoid-overturn-terminations-default/
Timestamp: 2019-04-18 18:29:36+00:00

Document:
How To Avoid & Overturn Terminations For Default - Seidman & Associates, P.C.
The standard “Default” clauses used in fixed-price Government contracts generally give the Government the right to terminate a contract for default if a contractor fails to (a) deliver supplies or to perform the services or work within the time specified in the contract, (b) make progress so as to endanger contract performance or to prosecute the work with the diligence that will ensure its completion, or (c) perform any other provisions of the contract. 1 The clauses would appear to permit the Government to terminate based on any failure by the contractor to strictly comply with the contract. However, court and agency board of contract appeals decisions have limited the Government’s right to terminate by requiring the Contracting Officer to exercise sound discretion and by recognizing various contractor defenses.
Similarly, before awarding a contract, a CO must determine that the intended awardee is responsible, i.e., capable of performing. 9 This requirement applies to all awards, irrespective of dollar amount or whether they resulted from negotiation or sealed bidding. 10 Since one of the mandatory elements of responsibility is that the prospective contractor must have a “satisfactory performance record,” 11 a prior default termination may lead to a negative responsibility determination.
On the other hand, a CO is not required to issue a cure notice before terminating for default a fixed-price construction contract for failure to prosecute the work. 28However, it is usually in the Government’s interest to issue a cure notice to avoid improperly terminating a contract for default.
Whether the contractor’s noncompliance amounts to a breach of a material provision of the contract depends upon the deficiency and the particular contract provision with which the contractor has failed to comply. 38 For example, the “Small, Small Disadvantaged and Women-Owned Small Business Subcontracting Plan” clause provides that a failure to meet subcontracting plan requirements is “a material breach of the contract.” 39 Based on this language, it would appear that any failure to meet small business subcontracting plan requirements is a ground for default termination. However, given the forfeiture resulting from a default termination, the courts and boards would likely limit the right to terminate for default to serious departures from subcontracting plan requirements.
The fixed-price supply and service, R&D, and construction contract “Default” clauses all list the following nine “examples” of excusable delays: (a) acts of God or of the public enemy, (b) acts of the Government in either its sovereign or contractual capacity, (c) fires, (d) floods, (e) epidemics, (f) quarantine restrictions, (g) strikes, (h) freight embargoes, and (i) unusually severe weather. 55 In addition, the construction contract “Default” clause lists “acts of another contractor in the performance of a contract with the Government” as an excusable delay. 56 However, this category of excusable delay would appear also to be available under supply and service and R&D contracts as acts of the Government in its contractual capacity.
(2) Defective Specifications and Impossibility–A contractor’s failure to perform is excused to the extent it is caused by defective specifications furnished by the Government. Defects in specifications range from inconsistencies, legibility problems, and ambiguities that may entitle a contractor to additional time or money to defects that render performance commercially impracticable or impossible and may excuse the contractor from further performance.
(3) Waiver of Contract Due Date–Under the standard FAR “Default” clauses, the Government “may,” but is not required to, terminate for default for failure to meet a contract delivery or performance date (supply and service and R&D contracts) or completion date (construction contracts). 74 The Government may waive a due date through actions or inactions inconsistent with enforcing the due date. Thus, the Government waives a due date if it fails to terminate the contract within a reasonable time and the contractor continues performance in reliance on that failure to act with the Government’s actual or constructive knowledge. 75 Other circumstances indicative of waiver include the Government’s entering into negotiations with a contractor to establish a new delivery date, 76 requesting a price for reinstating a portion of the contract previously terminated for convenience, 77 or accepting supplies 78 or services79 after the due date has passed.
After a due date is waived, a new due date must be established before the Government can terminate the contract for default. A new due date can be established either by agreement between the contractor and the CO or unilaterally by the CO. 80 If established unilaterally by the CO, the new due date is enforceable only if it is reasonable in view of the capabilities of the contractor at the time the date is established. 81 If the date used was provided by the contractor, it is considered to be reasonable even if the due date later proves to be unrealistic. 82 Thus, as discussed in more detail later in this PAPER, to avoid default terminations, you should never propose or agree to a contract schedule you cannot meet.
(6) CO’s Abuse of Discretion–The decision to terminate for default must be the result of the CO’s exercise of sound discretion. The failure of a contractor to satisfy contract performance requirements alone is insufficient to support a termination for default. Specifically, the standard “Default” clauses state that upon default the CO “may” terminate not shall terminate. 88 In other words, the CO must look beyond the mere default and consider the other interests of the Government when deciding whether to terminate a contract. 89 If the CO abuses the discretion to terminate, the default termination is invalid.
The terms of the contract and applicable laws and regulations.
The degree of essentiality of the contractor in the Government acquisition program and the effect of a termination for default upon the contractor’s capability as a supplier under other contracts.
The effect of a termination for default on the ability of the contractor to liquidate guaranteed loans, progress payments, or advance payments.
The first article approval clause does not give the Government the right to disapprove a first article for any noncompliance with specifications that would be a valid reason for rejection of supplies tendered for delivery under the contract. Ordinarily the primary purpose for requiring first article submission is to prove the capability of the contractor to produce end products that will meet the contract requirements. . .. Deficiencies in a first article that are correctable in production are not a valid basis for an outright disapproval of a first article, and, in recognition of this, the first article approval clause expressly provides for conditional approval.
Applying this rule in another case, the ASBCA held that it was improper for the Government to reject a first article of prepackaged “chicken ala king” because it was too bland and thus invalidated the default termination of the contract. 102 Similarly, the ASBCA overturned the default termination of a contract for 20-millimeter gun boosters where the defects could be corrected by 15 minutes of precision machining.103 In each of these cases, the board reasoned that the defects were minor and readily correctable in production.
(1) Substantial Completion–Construction contracts involve countless detailed requirements that must be met before completion. Where only “punch list” items remain to be completed, however, the substantial completion doctrine may be available as a defense to a default termination. The doctrine is based on the principle that it would be inequitable to permit a default termination based on incomplete punch list items where the building or construction site is substantially complete. Under such circumstances, the Government is receiving the benefit of its bargain.
We recognize that the government generally has the right to insist on performance in strict compliance with the contract specifications and may require a contractor to correct nonconforming work. . .. However, there is ample authority for holding that the government should not be permitted to direct the replacement of work in situations where the cost of correction is economically wasteful and the work is otherwise adequate for its intended purpose. In such cases, the government is only entitled to a downward adjustment in the contract price.
(a) Never propose or agree to a contract schedule you cannot meet. Solicitations often contain delivery, performance, or completion schedules a contractor knows it cannot meet. A contractor is sometimes faced with a similar predicament when negotiating a new schedule on an existing contract. Contractors sometimes submit bids or proposals agreeing to contract due dates they cannot meet because they need the work and know that the Government usually grants extensions rather than terminates the contract for late performance. Contractors also sometimes propose a new schedule they cannot meet on an existing contract to please the customer or to avoid a termination for default.
You should never, however, agree to or propose a contract schedule you cannot meet. Although contractors may bid schedules they cannot meet to obtain more work, in the long run they usually get less work instead. A history of delinquencies can lead to negative past performance evaluations 118 and nonresponsibility determinations 119that will likely result in the loss of future contracts.
When faced with a contract due date in a solicitation you cannot meet, your first tactic should be to ask the CO to modify the solicitation to provide more time. A CO will often do this voluntarily to facilitate competition where the supplies, services, or other work are not urgently needed.
(b) Closely review specifications. The Government has the right to insist on strict and timely compliance with contract specifications. 122 To avoid a default termination for failure to comply with specifications, you should carefully review the contract’s specifications before submitting a bid or proposal on the contract to determine if you can comply with the specifications fully and on time.
(1) Maintain good working relationships with Government personnel. Human relations are an important aspect of Government contracting. COs and Government quality assurance representatives are vested with considerable discretion. Government contracting personnel are more inclined to give the benefit of the doubt to contractors they like and with whom they have a good working relationship.
(2) Maintain credibility by not making promises you cannot keep. To curry short-term favor with Government officials, contractors sometimes makes promises they cannot keep. This does not work in the long run. Where there is a problem, a CO is more likely to accept explanations and projections from a credible contractor. A contractor with a history of broken promises is much more likely to have its contract terminated for default.
(3) Formalize extensions for excusable delays. Absent a contract modification, Government personnel often consider a contract to be delinquent even if the delay in delivery or performance is excusable. To protect yourself, you should notify the Government of any excusable delays and receive a formal commensurate extension before the CO issues a cure notice, a show cause notice, or a termination for default notice. However, as previously discussed, you should never propose a due date you cannot meet.
A CO can unilaterally extend the delivery date for excusable delays. If the CO tenders a contract modification for your signature, you should scrutinize it for releaselanguage that would compromise your right to any additional compensation to which you are entitled.
(4) Provide timely conforming performance. Most default terminations are based on either the failure to perform on time or the failure to meet contract specifications. It is axiomatic, but most default terminations can be avoided by timely tendering conforming performance.
(5) Never refuse to perform. As previously discussed, anticipatory repudiation is ground for default termination without notice and arises when a contractor unequivocally refuses to perform. Additionally, the standard “Disputes” clause requires the contractor to proceed with performance pending resolution of any disputes. 123 Although there are situations in which a contractor is justified in stopping performance–such as where a CO has directed a so-called “cardinal change” (i.e., a change beyond the scope of the contract) 124–these cases are rare and closely scrutinized in litigation. Therefore, as a general rule, you should never refuse to perform, especially without advice of counsel.
(6) Engage in cross-contract horse-trading. Many contractors have several contracts with the same Government buying activity. The Government will often trade your agreement to accelerate performance on a contract where performance is urgently needed for an extension of time to complete another contract.
(7) Offer consideration. The Government will often accept consideration from a contractor in return for additional time to complete a contract and for refraining from terminating the contract for default. Consideration can take many forms including money or acceleration on another contract. Where you offer money, you can often avoid making an immediate cash outlay by offering a reduction in the contract’s price.
You should think about offering consideration to avoid a default termination, especially where the Government appears to have valid grounds for terminating the contract and you have few if any defenses. 125 Before signing a modification in which the Government extends the delivery date in return for consideration, however, you should carefully review any proposed release language to make sure you do not give up more than you intend.
You are notified that the Government considers your . . .. . . [specify the contractor’s failure or failures] a condition that is endangering performance of the contract. Therefore, unless this condition is cured within 10 days after receipt of this notice [or insert any longer time that the Contracting Officer may consider reasonably necessary], the Government may terminate for default under the terms and conditions of the . . .. . . [insert clause title] clause of this contract.
Since you have failed to . . .. . . [insert “perform Contract No. . . .. . . within the time required by its terms,” or “cure the conditions endangering performance under Contract No. . . .. . . as described to you in the Government’s letter of . . .. . . (date)”], the Government is considering terminating the contract under the provisions for default of this contract. Pending a final decision in this matter, it will be necessary to determine whether your failure to perform arose from causes beyond your control and without fault or negligence on your part. Accordingly, you are given the opportunity to present, in writing, any facts bearing on the question to . . .. . . [insert the name and complete address of the contracting officer], within 10 days after receipt of this notice. Your failure to present any excuses within this time may be considered as an admission that none exist. Your attention is invited to the respective rights of the Contractor and the Government and the liabilities that may be invoked if a decision is made to terminate for default.
You should take any cure notice or a show cause notice seriously. On a given set of facts, the quality of your response to the notice can often mean the difference between default termination and being allowed to proceed with performance of the contract.
(a) Provide information to demonstrate the response is timely. You should include a statement in your response identifying when you received the notice and demonstrating that your response is timely. If you need additional time to respond, request it promptly and before the time in the cure notice or show cause notice expires.
(b) Present applicable defenses. Your response should present all applicable defenses. The failure to present all applicable defenses may result in a termination for default and litigation that could have been avoided.
(c) Provide adequate assurances (cure notice only). In issuing a cure notice, the CO is seeking assurances that timely performance will be made despite appearances to the contrary. You can respond to a cure notice by either (1) indicating that there is no failure to make progress that needs to be cured or (2) explaining how you cured the failure to make progress. Under the first approach, you would argue that you are entitled to additional time as a result of excusable delays and that the Government is therefore measuring your performance against the wrong milestones. In other words, the Government should not have issued the cure notice. Under the second approach, you would explain how delivery or performance due dates will be met.
As discussed above, the Government bears a heavy burden of proof if it terminates a contract for default for failure to make progress or to prosecute the work. 136Therefore, any plausible explanation of how you will perform on time will generally allow you to avoid a default termination for failure to make progress.
(d) Avoid statements that could be construed as an anticipatory repudiation. It is important to understand that a poorly conceived response to a show cause notice or a cure notice could be construed by the Government as an indication that you cannot ordo not intend to perform and therefore justify a default termination based on anticipatory repudiation. For example, an anticipatory repudiation occurred when a contractor stated that it was “working with skeleton crew to prepare lot for resubmission [and] full scale operations cannot be reinstated until proper financing is forthcoming.” 137 Similar declarations of inability 138 or unwillingness 139 to perform or a reply that is not responsive 140 to concerns voiced in the CO’s notice have also been found to support a finding of anticipatory repudiation.
(e) Provide visual aids. Sometimes a picture is worth a thousand words. Where default termination is threatened concerning a contract item that is almost ready for delivery or involves facts where a visual aid would enhance your explanation, you should consider including a photograph, computer-generated representation, or other visual aid with your response.
Remember that your goal is to communicate that a default termination would be improper or, at best, a gamble and, in either case, is an action that is not in the Government’s best interest.
(h) Obtain legal help. It is easier to avoid the occurrence of a default termination than to overturn a termination after it has occurred. Once a default termination is issued, Government personnel rally to justify their position and refuse to consider arguments they might have accepted at the cure notice or show cause notice stage. Although contractors are often reluctant to consult counsel at the cure notice or show cause notice stage because of the expense, a good response to the notice can often help you avoid default termination and years of costly litigation.
Set forth below are examples of responses to cure notices.
(1) There Is No Failure To Make Progress To Cure–In this response, the contractor asserts that there is no failure to make progress that needs to be cured because the contractor is entitled to additional time for Government-caused delays.
I am writing in response to the Cure Notice dated December 5 and received by Contractor on December 15. The notice alleges that there has been a failure to make progress so as to endanger performance. More specifically, the Government alleges that the December 30, 1997, delivery date that appears in the contract will not be met because 30 days of work are needed for completion and Contractor’s plant is closed down for the Christmas holidays from December 15 to January 2.
A default termination for failure to make progress so as to endanger delivery on December 30 would be legally insupportable. The Government was required to provide Contractor with Government-furnished pins necessary to begin production by March 1, 1997, but did not provide them until March 31. As a result, Contractor is entitled to an additional 30 days to deliver.
A default termination would be legally insupportable because there is no failure to make progress that endangers performance for Contractor to cure.
Also, a termination for default is not in the Government’s best interest. Contractor is one of two domestic manufacturers of light sabers. A default termination would force Contractor out of business. The resulting erosion of the defense industrial base would threaten national security by limiting the domestic ability to surge production of light sabers in time of crisis. It would also eliminate competition and thereby result in costly, noncompetitive procurements.
If you have any questions concerning any of the above, please let me know.
(2) The Failure To Make Progress Has Been Cured–In this response, the contractor demonstrates how it has cured the failure to make progress by subcontracting final assembly.
I am writing in response to the Cure Notice dated September 5 and received by Contractor on September 12. The notice alleges there has been a failure to make progress so as to endanger performance. More specifically, the Government alleges that the October 30 delivery date that appears in the contract will not be met because the contractor has sold its old plant and its new plant will not be operational until November 15.
Contractor will meet the purported October 30 delivery date. All that remains to be done is final assembly. Contractor has subcontracted this task to ABC Company. ABC Company has the facilities and personnel necessary to meet the purported October 30 due date.
A default termination would be legally insupportable for the reasons set forth above.
Even if there were a failure to make progress, a default termination would not be in the Government’s best interest because no other contractor is in a position to deliver before Contractor. In Monaco Enterprises v. U.S., 907 F.2d 159 (Fed. Cir. 1990), the U.S. Court of Appeals for the Federal Circuit held a default termination under such circumstances to be an abuse of discretion and therefore invalid.
Set forth below are examples of responses to show cause notices.
(a) Waiver of Delivery Date–In this sample response, the contractor is asserting that the contract should not be terminated for default because the Government has waived the delivery date.
I am writing in response to the Show Cause Notice dated November 1 and received by Contractor on November 3.
The notice alleges that, since Contractor failed to make delivery in accordance with the terms of the contract, termination for default is being considered.
The last due dates established under the contract were June 30, July 30, and August 30. Four months have passed since the first installment was allegedly due. Waiver of delivery dates and thus waiver of the right to terminate for not meeting the delivery dates have been found for much shorter periods. For example in Cecile Industries, Inc., ASBCA 24600, 83-2 BCA ¶ 16842, the board found the right to terminate for default was waived where the default notice was issued only two and one-half months after the first delivery date and just two weeks after the last delivery date.
The record shows that the Government is aware that Contractor has continued to incur costs and perform during the waiver period. [Insert examples.] Clearly a termination for default is insupportable where, as here, no delivery schedule is in effect because the Government has waived the last established delivery schedule, and Contractor continued performance in reliance on the Government’s failure to terminate.
For these reasons, termination of the contract for default is insupportable and not in the best interest of the Government.
Please be assured that Contractor is ready, willing, and able to perform. If you have any additional questions concerning this matter please contact this office.
(b) Defective Specifications, Excusable Delay, and Minor Defects in First Articles–The following sample response argues that default termination of a first article contract is improper because (1) the Government-furnished specifications are defective, (2) the delay is excusable since it was caused by the Government’s suspension of the work, and (3) the defects in the first articles are minor and correctable in production.
Contractor, through its counsel, hereby responds to your Show Cause Notice dated November 4 and received November 8. The notice alleges that Contractor tendered nonconforming first articles and has therefore failed to make delivery in accordance with the terms of the contract and that termination for default is being considered.
As will be discussed below, a termination for default would be improper because (1) Government-furnished specifications are defective, (2) the Government constructively suspended performance by soliciting technical information from Contractor on how to correct the defects and then failing to authorize Contractor to take corrective action, and (3) any alleged defects in the first articles are readily correctable in production.
(a) Defective specifications. The technical data provided with the contract did not include the latest drawing revision. The latest revision replaces the defective component with one manufactured by Vendor X.
(b) Constructive suspension. The Government requested Contractor to investigate why the first articles failed to pass performance testing. The Contractor investigated and reported that the specifications must be revised to provide for Vendor X’s component. The Government allowed the due date to pass without revising the specifications to provide for use of Vendor X’s component.
In our view any period of performance is tolled by the negotiations which were never concluded due to the failure of respondent to furnish a decision in the dispute over the modified specifications. We think appellant was entitled to withhold performance until the matter was settled.
In his termination notice the contracting officer denied that appellant had excusable cause for nonperformance based on defective specifications. We do not think it necessary to determine whether the specifications were defective. Appellant contended they were defective and respondent entered into negotiations to modify them. Until these negotiations were completed and a decision made as to the form of the modified specifications appellant had no duty to proceed with performance.
Until the Contracting Officer advises Contractor how to proceed, performance is suspended. Default termination for an alleged failure to perform under a suspended contract is clearly improper.
(c) Defects are readily correctable in production. Even assuming the first articles are nonconforming, any defects are minor and readily correctable in production. Contractor submits that it delivered first articles that comply with theGovernment-furnished specifications and any alleged defects are corrected by using Vendor X’s component. Installing Vendor X’s component requires the same time and effort as the specified component. Even if this defect were attributable to Contractor, which it clearly is not, the defect is minor and readily correctable in production through use of Vendor X’s component. Under the contract’s FAR 52.209-3 “First Article Approval– Contractor Testing” clause, conditional approvalof the first articles is therefore required. See National Aviation Electronics, Inc.,ASBCA 18256, 74-2 BCA ¶ 10677.
For the above reasons, a termination for default would be totally without justification. In addition, Government actions and inactions in failing to revise the specifications have suspended the contract and delayed performance, which entitles Contractor to an equitable adjustment including extra time to perform.
Contractor remains willing to meet with Government engineers to work out the technical difficulties with the first articles or to proceed with production subject to use of Vendor X’s component.
If you have any questions concerning any of the above please let me know.
Under the standard FAR “Default” clauses, an improper termination for default results in a termination for convenience. 147 A termination for convenience essentially converts a fixed-price contract to a cost-reimbursement contract and entitles the contractor to a favorable recovery. 148 (Previous BRIEFING PAPERS have discussed general strategies you can follow to maximize recovery of termination for convenience costs and how to claim those costs. 149) Therefore, any contractor facing default termination of its contract should attempt first to reach a termination settlement with the CO. If that fails, you should consider filing a claim under the contract’s “Disputes” clause to challenge the CO’s default termination decision and be prepared to litigate the claim to final resolution.
Whether in informal dispute resolution, ADR, or litigation, you must develop the applicable facts and defenses. Neither you, the contracting agency, nor the trier-of-fact in the dispute or litigation process will be able to make meaningful decisions and recommendations without a fully developed record. Therefore, you must be prepared to commit the time and expense necessary to fully develop the facts and your defenses.
Litigation to overturn a default termination is expensive and time consuming, and your chances of succeeding are not favorable. Therefore, a negotiated resolution of the dispute is always in the best interests of both parties. Negotiable issues include conversion of the default termination to a termination for convenience, the amount of money to be paid by the Government or the contractor, and title to termination inventory.
The Government will often agree to issue a “no cost” termination for convenience, especially where there are no excess costs of reprocurement. A variation is a termination for convenience where no money changes hands and the contractor is allowed to retain progress payments.
Agency and Department of Justice counsel are required by Executive Order to consider ADR as an alternative to litigation. 155 You should keep in mind that ADR does not toll the deadlines for filing an appeal of a default termination to the board or court. 156 If the termination for default has been issued, you should therefore file your appeal notice before becoming seriously involved in ADR. Boards and courts are receptive to requests to suspend proceedings so the parties can pursue ADR.
The Fulford doctrine has been adopted by most other boards of contract appeals 159and the U.S. Court of Federal Claims. 160 However, the Department of Agriculture Board of Contract Appeals will not generally apply the Fulford doctrine. 161Additionally, there are no decisions addressing the Fulford doctrine by the U.S. Court of Appeals for the Federal Circuit or its predecessor, the U.S. Court of Claims. An election not to appeal a default termination until after the Government assesses its excess costs against the contractor therefore poses significant risks, and any contractor faced with a default termination should consider a timely appeal to preserve its right to obtain review of the termination.
These Guidelines are designed to assist you in avoiding and overturning terminations for default. They are not, however, a substitute for professional representation in any specific situation.
1. Remember that default terminations result in loss of work, liability to the Government for excess costs of reprocurement and other damages under the terminated contract, and a diminished ability to obtain future Government contracts.
2. Be aware of the grounds for default termination and applicable defenses.
3. Recognize that the first step you can take to avoid a default termination is to submit a bid or proposal only if you can meet the delivery or performance scheduleand the specifications.
4. Maintain good working relationships with Government personnel. Do not make promises you cannot keep.
5. Perform on time and in accordance with applicable specifications. Never refuse to perform or make other statements that could be construed as anticipatory repudiationof your obligations under the contract.
6. If your performance is late, think about offering the Government consideration for a time extension–especially if there are grounds for default termination of the contract and your defenses are weak.
7. Consider proposing the use of alternative dispute resolution techniques if you are unable to resolve a dispute with the Government that could result in a default termination.
8. Treat cure notices and show cause notices seriously and submit a timely responseto the Government. Your response to a cure notice should either (a) presentapplicable defenses to explain why there is no failure to make progress or (b) explain the steps you have taken to ensure timely performance. Your response to a show cause notice should present all applicable defenses. Your response to either type of notice should explain why default termination is not in the Government’s best interest.
9. Remember to include pictures or other visual aids in a response to a cure notice or a show cause notice if they will enhance your presentation.
10. Keep in mind that it is easier to avoid than to overturn a termination for default. Seek the advice of counsel at the cure notice or show cause notice stage or earlier.
1 See FAR 52.249-8, para. (a)(1) (“Default (Fixed-Price Supply and Service)” clause), 52.249-9, para. (a)(1) (“Default (Fixed-Price Research and Development)” clause), 52.249-10, para. (a) (“Default (Fixed-Price Construction)” clause).
2 See FAR 52.212-4, para. (m). See generally Vacketta & Moynihan, “‘Commercial Item’ Contracts: Default & Related Topics,” Briefing Papers No. 96-3 (Feb. 1996); Cibinic, “Commercial Item Terms and Conditions: Neither Fish Nor Fowl,” 10 Nash & Cibinic Rep. ¶ 61 (Dec. 1996).
3 See FAR 49.402-2(a), (e), 49.402-6, 49.402-7, 52.249-8, paras. (b), (h), 52.249-9, paras. (b), (h), 52.249-10, paras. (a), (d). See generally Williamson & Medill-Jones, “Government Damages for Default,” Briefing Papers No. 89-7 (June 1989), 8 BPC 377.
4 FAR 49.402-6(c). See Cascade Pac. Intl. v. U.S., 773 F.2d 287 (Fed. Cir. 1985), 4 FPD ¶ 49, 28 GC ¶ 38. See also Nash, Schooner & O’Brien, “The Government Contracts Reference Book” 220 (Geo. Wash. Univ. 2d ed. 1998). See generally Crowell & Johnson, “Excess Reprocurement Costs,” Briefing Papers No. 67-6 (Dec. 1967), 1 BPC 281.
5 FAR 15.305(a)(2). See 41 USC § 405(j).
8 MAC’s General Contractor, Comp. Gen. Dec. B-276755, 97-2 CPD ¶ 29.
9 FAR 9.103, 9.104-1. See generally Bodenheimer, “Responsibility of Prospective Contractors,” Briefing Papers No. 97-9 (Aug. 1997).
12 DeVito v. U.S., 188 Ct. Cl. 979, 413 F.2d 1147 (1969), 11 GC ¶ 307.
13 FAR 52.249-8, para. (a)(1)(i), 52.249-9, para. (a)(1)(i).
14 FAR 52.249-10, para. (a).
15 Artisan Elecs. Corp. v. U.S., 205 Ct. Cl. 126, 499 F.2d 606 (1974), 16 GC ¶ 306; Flameco Engrg., Inc., ASBCA 39337, 92-1 BCA ¶ 24518. See also Phoenix Petroleum Co., ASBCA 40629 et al., 93-1 BCA ¶ 25334 (citing Norington v. Wright, 115 U.S. 188, 205 (1885)).
16 FAR 52.249-8, para. (a)(1)(i), 52.249-9, para. (a)(1)(i), 52.249-10, para. (a).
17 Cascade Pac. Intl. v. U.S., note 4, supra.
18 Cascade Pac. Intl. v. U.S., note 4, supra.
19 Strum Craft Co., ASBCA 34311, 89-1 BCA ¶ 21337. See Cibinic “Strict Compliance With Specifications: Looking the Gift Horse in the Mouth,” 3 Nash & Cibinic Rep. ¶ 53 (July 1989).
20 FAR 52.249-8, para. (a)(1)(ii).
21 FAR 52.249-9, para. (a)(1)(ii).
22 FAR 52.249-10, para. (a).
23 See generally Speidel, “Default for Failure To Make Progress,” Briefing Papers No. 64-5 (Oct. 1964), 1 BPC 87.
24 Lisbon Contractors, Inc. v. U.S., 828 F.2d 759 (Fed. Cir. 1987), 6 FPD ¶ 113, 29 GC ¶ 296.
26 FAR 52.249-8, para. (a)(2), 52.249-9, para. (a)(2), 49.402-3(d), 49.607(a).
27 Fairfield Scientific Corp., ASBCA 21151, 78-1 BCA ¶ 13082, 25 GC ¶ 167 (Note), affd. on recon., 78-2 BCA ¶ 13429, 25 GC ¶ 167 (Note). See also Bailey Specialized Bldgs., Inc. v. U.S., 186 Ct. Cl. 71, 404 F.2d 355 (1968), 11 GC ¶ 12.
28 FAR 52.249-10; ONI Const., Inc., ASBCA 45394 et al., 96-2 BCA ¶ 28277.
29 FAR 52.249-8, para. (a)(1)(iii), 52.249-9, para. (a)(1)(iii).
30 See Bailey Specialized Bldgs. Inc. v. U.S., note 27, supra; FAR 52.249-8, para. (a)(1)(i), (ii), 52.249-9, para. (a)(1)(i), (ii).
31 See Composite Laminates, Inc. v. U.S., 27 Fed. Cl. 310 (1992), 12 FPD ¶ 9, 36 GC ¶ 27 (Note); Brandywine Prosthetic-Orthotic Svc., Ltd., VABCA 3441, 93-1 BCA ¶ 25250; Precision Prods., ASBCA 25280, 82-2 BCA ¶ 15981, 24 GC ¶ 337.
32 Kelso v. Kirk Bros. Mechanical Contractors, Inc., 16 F.3d 1173 (Fed. Cir. 1994), 13 FPD ¶ 26, 36 GC ¶ 283.
33 Giltron Assocs., Inc., ASBCA 14561 et al., 70-1 BCA ¶ 8316 (Service Contract Act); SanColMar Indus., Inc., ASBCA 15339 et al., 73-2 BCA ¶ 10086 (Walsh-Healey Act); Edgar M. Williams General Contractor, ASBCA 16058 et al., 72-2 BCA ¶ 9734, 15 GC ¶ 106 (Davis-Bacon Act and Contract Work Hours and Safety Standards Act).
34 Ballantine Labs., Inc., ASBCA 35138, 88-2 BCA ¶ 20660, 30 GC ¶ 136 (Note); Red Sea Trading Assocs., Inc. ASBCA 36360, 91-1 BCA ¶ 23567.
35 Inter-Continental Equip., Inc., ASBCA 37422, 96-1 BCA ¶ 28048.
36 Ray Serv. Co., ASBCA 35800, 89-1 BCA ¶ 21549; Petroleum Terminal Mgmt., Inc., ASBCA 33680, 89-2 BCA ¶ 21835.
37 J. Carlton Hudson, Jr., ASBCA 11659 et al., 67-2 BCA ¶ 6503, 10 GC ¶ 280.
38 See generally Cibinic, “Default Termination for Failure To Comply With ‘Other Provisions’: Requiring Contractors To Do the Complete Job,” 8 Nash & Cibinic Rep. ¶ 24 (Apr. 1994).
39 FAR 52.219-9, para. (i).
40 See Joseph Morton Co. v. U.S., 757 F.2d 1273 (Fed. Cir. 1985), 3 FPD ¶ 121, 27 GC ¶ 224. See also Beech Gap, Inc., ENGBCA 5585 et al., 95-2 BCA ¶ 27879.
41 See Art-Metal USA, Inc. v. Solomon, 473 F. Supp. 1 (D.D.C. 1978) (mere suspicion of fraud held insufficient to support a termination for convenience), 20 GC ¶ 442.
42 See FAR 52.249-8, para. (a)(1)(iii), (a)(2), 52.249-9, para. (a)(1)(iii), (a)(2).
43 Bailey Specialized Bldgs., Inc. v. U.S., note 27, supra; Composite Laminates, Inc. v. U.S., note 31, supra.
44 See SanColMar Indus., Inc., note 33, supra.
45 Samuel A. Moore, PSBCA 1063, 83-1 BCA ¶ 16376, 25 GC ¶ 139.
46 Kennedy v. U.S., 164 Ct. Cl. 507 (1964), 6 GC ¶ 106. See Black’s Law Dictionary 93 (6th ed. 1990) (“anticipatory breach of contract”). See also Restatement of Contracts § 318 (Am. Law Inst. 1932).
47 U.S. v. DeKonty Corp., 922 F.2d 826 (Fed. Cir. 1991), 10 FPD ¶ 2, 33 GC ¶ 37 (quoting Cascade Pac. Intl. v. U.S., note 4, supra, which followed Dingley v. Oler, 117 U.S. 490 (1886) and In re Smoot, 82 U.S. 36 (1872)).
48 AEC Corp., ASBCA 42920, 98-2 BCA ¶ 29952, 40 GC ¶ 433 (Note), affd. on recon., 1998 WL 883200 (Dec. 11, 1998).
49 Big 3 Contracting Corp., ASBCA 20929, 79-1 BCA ¶ 13601 (1978), 25 GC ¶ 167 (Note), recon. denied, 1979 WL 2442 (Aug. 10, 1979).
50 Cascade Pac. Intl. v. U.S., note 4, supra.
51 FAR 52.249-8, para. (h), 52.249-9, para. (h), 52.249-10, para. (d).
52 See Howell Tool & Fabricating, Inc., ASBCA 47939, 96-1 BCA ¶ 28225. See also McDonnell Douglas Corp. v. U.S., 35 Fed. Cl. 358, 377 n.32 (1996), 15 FPD ¶ 37.
53 FAR 52.249-8, para. (c), 52.249-9, para. (c), 52.249-10, para. (b)(1).
54 FAR 52.249-10, para. (b)(1).
55 FAR 52.249-8, para. (c), 52.249-9, para. (c), 52.249-10, para. (b)(1).
56 FAR 52.249-10, para. (b)(1)(iii).
57 FAR 52.249-8, para. (d), 52.249-9, para. (d), FAR 52.249-10, para. (b)(1)(xi).
58 FAR 52.249-8, para. (c), 52.249-9, para. (c), 52.249-10, para. (b)(1). See U.S. v. Brooks-Calloway, Co. 318 U.S. 120 (1943).
59 FAR 52.249-8, para. (c), 52.249-9, para. (c), 52.249-10, para. (b)(1).
60 See ACE Elecs. Assocs. Inc., ASBCA 13899, 69-2 BCA ¶ 7922, 12 GC ¶ 70.
61 FAR 52.249-10, para. (b)(1).
62 See generally Nash, “Concurrent Delays: A Financial Checkmate,” 2 Nash & Cibinic Rep. ¶ 3 (Jan. 1988).
63 Tobe Deutschmann Labs., NASABCA 73, 66-1 BCA ¶ 5413, 9 GC ¶ 62.
64 Metro-Tel Div. of Grow Corp., ASBCA 8471, 1964 BCA ¶ 4164, 7 GC ¶ 170.
65 U.S. v. Spearin, 248 U.S. 132 (1918). See generally Allen & Villet, “Implied Warranty of Specifications,” Briefing Papers No. 91-8 (July 1991), 9 BPC 439.
66 John McShain, Inc. v. U.S., 188 Ct. Cl. 830, 412 F.2d 1281 (1969), 11 GC ¶ 310.
67 Hol-Gar Mfg. Corp. v U.S., 175 Ct. Cl. 518, 360 F.2d 634 (1966), 8 GC ¶ 240.
68 Defense Sys. Corp., ASBCA 42939 et al., 95-2 BCA ¶ 27721, 37 GC ¶ 469.
69 Soletanche Rodio Nicholson (JV), ENGBCA 5796 et al., 94-1 BCA ¶ 26472, 36 GC ¶ 285 (Note); XPLO Corp., DOTBCA 1289, 86-3 BCA ¶ 19125, 28 GC ¶ 217. See also Transatlantic Fin. Corp. v. U.S., 363 F.2d 312 (D.C. Cir. 1966).
70 Wild Wood Assocs., Inc., AGBCA 96-150-3 et al., 97-2 BCA ¶ 29263; Koppers Co. v. U.S., 186 Ct. Cl. 142, 405 F.2d 554 (1968), 11 GC ¶ 26.
71 ESB, Inc., ASBCA 22914, 81-1 BCA ¶ 15012; Oak Adec, Inc. v. U.S., 24 Cl. Ct. 502 (1991), 10 FPD ¶ 140, 34 GC ¶ 11.
72 Note 68, supra; Dynalectron Corp. v. U.S., 207 Ct. Cl. 349, 518 F.2d 594 (1975), 17 GC ¶ 307; Foster Wheeler Corp. v. U.S., 206 Ct. Cl. 533, 513 F.2d 588 (1975), 17 GC ¶ 137.
73 XPLO Corp., note 69, supra. See also Transatlantic Fin. Corp. v. U.S., note 69, supra.
74 FAR 52.249-8, para. (a)(1), 52.249-9, para. (a)(1), 52.249-10, para. (a).
75 Note 12, supra; H.N. Bailey & Assocs. v. U.S., 196 Ct. Cl. 156, 449 F.2d 387 (1971), 13 GC ¶ 439. See generally Pettit, “Waiver of Delivery Date,” Briefing Papers No. 71-6 (Dec. 1971), 2 BPC 151.
76 Cecile Indus., Inc., ASBCA 24600 et al., 83-2 BCA ¶ 16842, 26 GC ¶ 10.
77 Kitco, Inc., ASBCA 38184, 91-3 BCA ¶ 24190.
78 Patten Co., ASBCA 35319, 89-3 BCA ¶ 21957.
79 W.M. Grace, Inc. ASBCA 23076, 80-1 BCA ¶ 14256, 22 GC ¶ 311.
80 Note 12, supra; Bailey Specialized Bldgs., Inc. v. U.S., note 27, supra.
81 Note 12, supra; Lumen, Inc. ASBCA 6431, 61-2 BCA ¶ 3210, 4 GC ¶ 279.
82 See Tampa Brass & Aluminum Corp., ASBCA 41314, 92-2 BCA ¶ 24865.
83 Olson Plumbing & Heating Co., ASBCA 17965 et al., 75-1 BCA ¶ 11203, 17 GC ¶ 427, affd., 221 Ct. Cl. 197, 602 F.2d 950 (1979), 21 GC ¶ 344.
84 See Corway, Inc., ASBCA 20683, 77-1 BCA 12357, 19 GC ¶ 172.
85 Fairfield Scientific Corp., note 27, supra. See also Bailey Specialized Bldgs., Inc. v. U.S., note 27, supra.
86 McDonnell Douglas Corp. v. U.S., note 52, supra.
87 Schlesinger v. U.S., 182 Ct. Cl. 571, 390 F.2d 702 (1968), 10 GC ¶ 129.
88 FAR 52.249-8, para. (a)(1), 52.249-9, para. (a)(1), 52.249-10, para. (a) (emphasis added).
89 See McDonnell Douglas Corp. v. U.S., note 52, supra. See also FAR 49.402-3(a), (f), 49.402-4; Cibinic, “Default Terminations: To Be or Not To Be?,” 2 Nash & Cibinic Rep. ¶ 33 (June 1988).
91 See William A. Hulett AGBCA 91-230-3 et al., 93-1 BCA ¶ 25389; Precision Dynamics, Inc., ASBCA 42955, 97-1 BCA ¶ 28846. See also Minelli v. U.S., 61 F.3d 920 (Fed. Cir. 1995) (Table) (unpublished), 14 FPD ¶ 58, 37 GC ¶ 608 (Note).
92 Monaco Enters. v. U.S., 907 F.2d 159 (Fed. Cir. 1990) (Table) (unpublished), 9 FPD ¶ 88, 32 GC ¶ 222.
93 Standard Register Co., GPOBCA 25-94, 1998 WL 350448 (Mar. 23, 1998), 40 GC ¶ 405.
94 Darwin Const. Co. v. U.S., 811 F.2d 593 (Fed. Cir. 1987), 6 FPD ¶ 19, 29 GC ¶ 66.
95 Walsky Const. Co., ASBCA 41541, 94-1 BCA ¶ 26264, 35 GC ¶ 605, affd. on recon., 94-2 BCA ¶ 26698, 36 GC ¶ 203 (Note).
96 Cascade Pac. Intl. v. U.S., note 4, supra.
97 Radiation Technology, Inc. v. U.S., 177 Ct. Cl. 227, 366 F.2d 1003 (1966), 8 GC ¶ 489.
98 FAR 52.209-3. See FAR 9.308-1.
99 FAR 52.209-4. See FAR 9.308-2.
100 FAR 52.209-3, para. (b), 52.209-4, para. (b). See generally Ewing, Lawrence & Zenner, “First-Article Contracts,” Briefing Papers No. 93-6 (May 1993).
101 National Aviation Elecs., Inc., ASBCA 18256, 74-2 BCA ¶ 10677, 16 GC ¶ 349.
102 International Foods Retort Co., ASBCA 34954 et al., 92-2 BCA ¶ 24994, 34 GC ¶ 520.
103 Dunrite Tool & Die, Inc., ASBCA 27538, 83-2 BCA ¶ 16830, recon. denied, 84-1 BCA ¶ 17107.
104 See Capitol City Const. Co., DOTBCA 74-29, 75-1 BCA ¶ 11012, 17 GC ¶ 122, recon. denied, 75-1 BCA ¶ 11103, 17 GC ¶ 122; Wolfe Const. Co., ENGBCA 3610, 84-3 BCA ¶ 17701, 36 GC ¶ 191 (Note). See generally Jackson & DeLancey, “Substantial Completion in Construction Contracts,” Briefing Papers No. 96-4 (Mar. 1996).
105 R.M. Crum Const. Co., VABCA 2143 et al., 85-2 BCA ¶ 18132.
106 Mark Smith Const. Co., ASBCA 25058 et al., 81-2 BCA ¶ 15306, 24 GC ¶ 152.
107 See also Olson Plumbing & Heating Co., note 83, supra.
108 Margulies, “Owner Remedies for Contractor Default,” in Construction Contracting ch. 11 at 864 (Geo. Wash. Univ. 1991).
109 Southland Const. Co., VABCA 2217, 89-1 BCA ¶ 21548, 31 GC ¶ 83. But see Wolfe Const. Co., note 104, supra.
110 Jacobs & Young, Inc. v. Kent, 230 N.Y 239, 129 N.E. 889 (1921).
111 See generally Cibinic, “Economic Waste: When ‘Just As Good’ Is Good Enough,” 6 Nash & Cibinic Rep. ¶ 28 (May 1992). See also Eastern Steamship Lines, Inc. v. U.S., 125 Ct. Cl. 422, 112 F. Supp. 167 (1953).
112 Granite Const. Co. v. U.S., 962 F.2d 998 (Fed. Cir. 1992), 11 FPD ¶ 42, 34 GC ¶ 293, cert. denied, 506 U.S. 1048 (1993).
114 Brand S Roofing, ASBCA 24688, 82-1 BCA ¶ 15513.
115 FAR 52.249-8, para. (a)(1)(i).
116 Swanson Group, ASBCA 44664, 98-2 BCA ¶ 29896.
117 Sentry Corp., ASBCA 29308, 84-3 BCA ¶ 17601.
118 USA Elecs., Comp. Gen. Dec. B-275389, 97-1 CPD ¶ 75; Quality Fabricators, Inc., Comp. Gen. Dec. B-271431, 96-2 CPD ¶ 22.
119 Victor Graphics, Inc., Comp. Gen. Dec. B-249297, 92-2 CPD ¶ 252; Johnson Graphic Indus. Inc., Comp. Gen. Dec. B-205070, 82-1 CPD ¶ 409.
120 Rampart Servs., Inc., Comp. Gen. Dec. B-219906, 65 Comp. Gen. 164 (1985), 28 GC ¶ 63; 41 USC § 253a(a); 10 USC § 2305(a)(1).
121 FAR 33.103(e) (agency-level protest); 4 CFR § 21.2(a)(1) (GAO protest); Saco Defense Sys. Div. v. Weinberger, 629 F. Supp. 385 (D. Me. 1986), affd., 806 F.2d 308 (1st Cir. 1986), and Harris Corp. v. U.S., 628 F. Supp. 813 (D.D.C. 1986) (Federal District Court protests under Scanwell jurisdiction); Allied Technology v. U.S., 39 Fed. Cl. 125 (1997) (U.S. Court of Federal Claims preaward protest).
122 Cascade Pac. Intl. v. U.S., note 4, supra.
123 FAR 52.233-1, para. (i).
124 See Airprep Technology, Inc. v. U.S., 30 Fed. Cl. 488 (1994), 13 FPD ¶ 18, 36 GC ¶ 285. See also Kakos Nursery, Inc., ASBCA 10989, 66-2 BCA ¶ 5733, 9 GC ¶ 350, affd. on recon., 66-2 BCA ¶ 5909, 9 GC ¶ 350.
125 See generally Nash, “Consideration for Time Extensions: Now You See It, Now You Don’t,” 4 Nash & Cibinic Rep. ¶ 54 (Sept. 1990).
126 See FAR 33.210, 33.214, and relevant definitions at FAR 33.201. See generally Arnavas & Hornyak, “Alternative Dispute Resolution/Edition II,” Briefing Papers No. 96-11 (Oct. 1996).
127 See Nash, “Alternative Dispute Resolution: When Should It Be Done?,” 10 Nash & Cibinic Rep. ¶ 26 (June 1996).
128 FAR 49.402-3(c), (d), (e), 49.607.
129 FAR 52.249-8, para. (a)(1), 52.249-9, para. (a)(1).
130 FAR 52.249-8, para. (a)(2), 52.249-9, para. (a)(2).
131 Fairfield Scientific Corp., note 27, supra. See also Bailey Specialized Bldgs., Inc. v. U.S., note 27, supra.
137 Kennedy v. U.S., note 46, supra.
138 Union Dev. Co., ASBCA 33684, 89-2 BCA ¶ 21582.
139 PBI Elec. Corp. v. U.S., 17 Cl. Ct. 128, 133-34 n.7 (1989), 8 FPD ¶ 74.
140 Roger James, ASBCA 18605, 75-1 BCA ¶ 11054.
141 See note 125, supra.
142 Notes 87 & 94, supra.
143 See FAR 49.402-3(a), 49.402-4; Cibinic, “Default Terminations: To Be or Not To Be?”, 2 Nash & Cibinic Rep. ¶ 33 (June 1988).
145 See FAR 52.249-2, paras. (f), (g), (i) (“Termination for Convenience of the Government (Fixed-Price)” clause). See also FAR 49.113, 49.201.
146 5 USC § 504 (EAJA statute applicable to board of contract appeals litigation); 28 USC § 2412 (EAJA statute applicable to litigation before the U.S. Court of Federal Claims and appeals to the U.S. Court of Appeals for the Federal Circuit). See generally Tobin & Stiffler, “Recovering Legal Fees Under EAJA/Edition II,” Briefing Papers No. 91-7 (June 1991), 9 BPC 421.
147 FAR 52.249-8, para. (g), 52.249-9, para. (g), 52.249-10, para. (c).
148 See Durette, Gmbh, ASBCA 34072, 91-2 BCA ¶ 23756.
149 Seidman & Banfield, “Maximizing Termination for Convenience Settlements,” Briefing Papers No. 95-5 (Apr. 1995); Seidman & Banfield, “Preparing Termination for Convenience Settlement Proposals for Fixed-Price Contracts,” Briefing Papers No. 97-11 (Oct. 1997).
150 41 USC § 606. See FAR 33.211(a)(4)(v).
151 41 USC § 609. See FAR 33.211(a)(4)(v).
152 41 USC § 606.
153 41 USC § 609(a)(1), (3).
154 See Tyger Const. Co., ASBCA 36100 et al., 88-3 BCA ¶ 21149, 30 GC ¶ 344.
155 Exec. Order 12988, 61 Fed. Reg. 4729 (Feb. 7, 1996).
157 Fulford Mfg. Co., ASBCA 2143 et al., 6 CCF ¶ 61815 (May 20, 1955).
158 See generally D. Moody & Co. v. U.S., 5 Cl. Ct. 70 (1984), 2 FPD ¶ 150, 26 GC ¶ 118.
159 Jeff Talano, PSBCA 3695 et al., 97-1 BCA ¶ 28628; Southwest Marine, Inc., DOTBCA 1891, 96-1 BCA ¶ 27985, 37 GC ¶ 608; Primepak Co., GSBCA 10514, 90-3 BCA ¶ 23280; High Tech Group, Inc., ENGBCA 5685, 90-2 BCA ¶ 22822; Tom Warr, IBCA 2360, 88-1 BCA ¶ 20231, 29 GC ¶ 356 (Note); Irvin Fisher, HUDBCA 77-198-C10, 79-2 BCA ¶ 14076, 21 GC ¶ 446.
160 Marshall Associated Contractors, Inc. v. U.S., 31 Fed. Cl. 809 (1994); note 158, supra.
161 See ACE Reforestation, Inc., AGBCA 84-272-1, 87-3 BCA ¶ 20218.

References: v. 
 v. 
 § 405
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 318
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 253
 § 2305
 § 21
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 504
 § 2412
 § 606
 § 609
 § 606
 § 609
 v. 
 v.