{"id":892111,"date":"2017-05-10T15:57:01","date_gmt":"2017-05-10T21:57:01","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=892111"},"modified":"2017-05-10T15:57:01","modified_gmt":"2017-05-10T21:57:01","slug":"when-is-the-contractors-termination-for-default-proper-when-it-does-bad-things","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/when-is-the-contractors-termination-for-default-proper-when-it-does-bad-things\/","title":{"rendered":"When Is The Contractor\u2019s Termination For Default Proper? When It Does Bad Things."},"content":{"rendered":"

Matthew DeVries | Best Practices Construction Law<\/a> | May 5, 2017<\/p>\n

Sometimes you \u201cdo\u201d bad things. \u00a0Sometimes you \u201clook like\u201d you do bad things. \u00a0Just look at the difference between Bad-boy Jack and my youngest daughter, Haven, who just \u201clooks like\u201d she\u2019s up to no good. \u00a0In the world of construction contracting, both can get in you in trouble, including a termination for default of performance.<\/p>\n

\"nogood\"<\/p>\n

Appeals of \u00a0Industrial Consultants, Inc. d\/b\/a W. Fortune & Company<\/em>, ASBCA No. 59622 (2017) involved a construction contract to upgrade an HVAC system at a facility in New Hampshire. The Board held that the contractor was properly terminated for default where: (1) it repeatedly insisted on changing the design of the project; (2) it furnished the submittals consistently late and at times did not submit them; (3) it did not respond to certain communications regarding design changes and rejections; and (4) it never submitted a safety plan.<\/p>\n

The Facts.<\/strong>\u00a0 Following award of the contract to the successful bidder, immediate concerns arose regarding the design. The contractor\u2019s presiden believe there was a defect in the design and he began to offer suggestions on redesign. The contractor submitted numerous RFI\u2019s, to which the government responded. During the process, the contractor delayed in providing submittals and often times never provided submittals. The contracting officer sent a notice to the contractor demanding the contractor to cure its deficiencies. \u00a0Numerous communications are back and forth between the parties, all of which demonstrated that the contractor was accusatory and combative. \u00a0In the end, the contracting officer has sent three cure notices and ultimately issued a termination for default.<\/p>\n

The Decision.\u00a0<\/strong>The Board found that the contractor failed to proceed with the work in violation of FAR 52.233-1 (Disputes) (June 2008), which requires that the \u201ccontractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under the contract, and comply with any decision of the contracting officer.\u201d As to the merits, the Board found:<\/p>\n

The government bears the burden of demonstrating that [the contractor] did not perform in a timely manner and that it failed to gain approval of its submittals. Failure to proceed with the work during a dispute is a ground for termination for default. In this appeal, it is undisputed that [the contractor] failed to complete the work on time, failed to proceed with the work after the Corps rejected its proposed changes to the project, and failed to furnish some submittals and failed to gain approval of other submittals. The government has made a prima facie case for default termination; [the contractor]must, therefore, prove that its nonperformance was excusable.<\/p><\/blockquote>\n

The Board then found that the contractor\u2019s default was not excusable\u2014as it had a basic misunderstanding as to its role as a contractor on the project.<\/p>\n

Lesson Learned.<\/strong> \u00a0Utlimately, the Board concluded that \u201cgovernment contractors must perform the contracts they execute and cannot require the government to rewrite the contract so that they can build some other project they like better.\u201d \u00a0In this case, the contractor questioned the design of the HVAC system and notified the government of those concerns. \u00a0But in the end, the government \u00a0chose to proceed with the design. At that point, the contractor had one choice: continue to build the project as it had contracted to do. \u00a0It did not have the option to\u00a0act bad<\/em> by \u201cdragging its feet\u201d and refuse to perform, which ultimately led to the termination for default.<\/p>\n","protected":false},"excerpt":{"rendered":"

Matthew DeVries | Best Practices Construction Law | May 5, 2017 Sometimes you \u201cdo\u201d bad things. \u00a0Sometimes you \u201clook like\u201d you do bad things. \u00a0Just look at the difference between Bad-boy Jack and my youngest daughter, Haven, who just \u201clooks like\u201d she\u2019s up to no good. \u00a0In the world of construction contracting, both can get… Continue reading When Is The Contractor\u2019s Termination For Default Proper? When It Does Bad Things.<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,172],"tags":[9895,72,10027],"class_list":["post-892111","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","category-construction-law-2","tag-advise-consult","tag-construction-contracts-2","tag-termination-for-default","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nWhen Is The Contractor\u2019s Termination For Default Proper? 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