Opinion ID: 494000
Heading Depth: 2
Heading Rank: 2

Heading: Standard for Default for Failure to Prosecute with Diligence

Text: 26 With respect to the government's challenge to the standard imposed by the Claims Court to establish the contractor's default here, we do not agree that the Claims Court ultimately required the government to prove that the contractor could not possibly complete the work before the date fixed in the contract. To make this argument, the government relies on isolated statements of the court read out of context. On this issue, the court unequivocally held: 27 The standard default clause does not require a finding that completion within the contract time is impossible. Termination for default is appropriate if a demonstrated lack of diligence indicates that [the government] could not be assured of timely completion. Case law that involves abandoned or repudiated contracts, and terminations that involve a failure to make progress, applies. Discount Co. v. United States, 554 F.2d 435, 441 [213 Ct.Cl. 567] (1977); Universal Fiberglass Corp. v. United States, 537 F.2d at 398. 28 Slip op. at 14. 29 We agree that the contractual language found in General Provision 5 does not require absolute impossibility of performance by the contractor before the government may declare the contract in default. See Discount Co. v. United States, 554 F.2d 435, 441, 213 Ct.Cl. 567, cert. denied, 434 U.S. 938, 98 S.Ct. 428, 54 L.Ed.2d 298 (1977). Nor does it permit default termination merely on the ground that performance is less than absolutely certain. Rather, we construe the contract, as did the Claims Court, to require a reasonable belief on the part of the contracting officer that there was no reasonable likelihood that the [contractor] could perform the entire contract effort within the time remaining for contract performance. RFI Shield-Rooms, ASBCA Nos. 17374, 17991, 77-2 BCA (CCH) p 12,714, 61,735 (Aug. 11, 1977); see also Discount, 554 F.2d at 441 (justifiable insecurity about the contract's timely completion required). Although the government argues strenuously to the contrary, the Claims Court placed upon the government no greater burden of proving default than that described in Discount.