{"id":905938,"date":"2026-07-28T16:07:41","date_gmt":"2026-07-28T22:07:41","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=905938"},"modified":"2026-07-28T16:07:44","modified_gmt":"2026-07-28T22:07:44","slug":"default-termination-to-termination-for-convenience","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/default-termination-to-termination-for-convenience\/","title":{"rendered":"ASBCA Converts Default Termination to Termination for Convenience: What Government Contractors Need to Know About Jaxon Construction, Inc."},"content":{"rendered":"\n

Aron Beezley and Steven C. Herrera | BuildSmart<\/a><\/p>\n\n\n\n

The Armed Services Board of Contract Appeals (ASBCA) recently issued an important decision explaining when a federal agency may terminate a contractor for default before contract performance is complete. In\u00a0Jaxon Construction, Inc.<\/em>, ASBCA No. 64432 (June 24, 2026)<\/a>, the board recognized that although the contractor may have committed numerous performance deficiencies, the Army failed to satisfy its legal burden of proving that a pre-completion default termination was justified. As a result, the board converted the default termination<\/a> into a termination for the convenience<\/a> of the government.<\/p>\n\n\n\n

While the decision was issued under ASBCA Rule 12.2 and has no precedential value, it provides valuable guidance regarding default terminations, cure notices, anticipatory repudiation, contractor performance, and the government\u2019s burden of proof under the Contract Disputes Act and the Federal Acquisition Regulation (FAR).<\/p>\n\n\n\n

Quick Answer: Why Did the ASBCA Overturn the Default Termination?<\/strong><\/h4>\n\n\n\n

The ASBCA held that the government failed to prove there was no reasonable likelihood that Jaxon Construction could complete the project within a realistic performance period. Although the contractor allegedly missed critical deadlines, submitted deficient preconstruction submittals, and had not started physical construction, the evidence demonstrated that winter weather delayed roofing work, government personnel acknowledged the likelihood of a winter suspension, the alleged deficiencies were never communicated to the contractor before termination, and the contractor continued attempting to perform rather than refusing performance.<\/p>\n\n\n\n

Background of the Dispute<\/strong><\/h4>\n\n\n\n

The Army awarded Jaxon Construction a firm-fixed-price contract valued at approximately $438,765 to remove and replace an ethylene propylene diene monomer (EPDM) roofing system at Rock Island Arsenal. The contract required completion within 80 working days after the notice to proceed and required submission of multiple administrative, quality control, technical, and safety documents before construction could begin. Jaxon experienced difficulties prior to the start of performance, including access to the roof. Required schedules, quality control plans, and safety documents were submitted late or rejected as deficient. The contractor also failed to begin physical roofing work before the Army issued a cure notice and ultimately terminated the contract for default. Jaxon appealed the termination, arguing that the government\u2019s decision was legally unsupported and should instead be converted into a termination for convenience.<\/p>\n\n\n\n

Why the Government Lost the Appeal<\/strong><\/h4>\n\n\n\n

The board acknowledged that Jaxon substantially underperformed during the early stages of contract administration. Missed deadlines, incomplete submittals, and the absence of physical construction gave the contracting officer legitimate reasons for concern.<\/p>\n\n\n\n

However, those facts alone were insufficient. Under long-standing Federal Circuit precedent, including Lisbon Contractors, Inc. v. United States<\/em>, the government bears the burden of proving that a contractor could not reasonably complete performance within the remaining contract period when terminating for default before the contract completion date. The board concluded that the Army failed to satisfy that burden because the evidence showed that the project could realistically continue during the spring construction season after a winter suspension.<\/p>\n\n\n\n

Government witnesses acknowledged that EPDM roofing could not be installed during winter temperatures and testified that winter \u201cholds\u201d were necessary on \u201croughly 90 percent of outdoor contracts\u201d at Rock Island. The contracting officer further informed Jaxon that if acceptable submittals were received, the parties would discuss a winter hold and an adjusted schedule. Those facts significantly undermined the government\u2019s argument that immediate default termination was necessary.<\/p>\n\n\n\n

Uncommunicated Deficiencies Played a Critical Role<\/strong><\/h4>\n\n\n\n

One of the most significant aspects of the opinion involved the contractor\u2019s Accident Prevention Plan. The government identified multiple deficiencies within the revised safety plan but never informed Jaxon of those specific deficiencies before terminating the contract. The board concluded that an uncommunicated deficiency demonstrates only that a document is currently unacceptable. It does not establish that the contractor is incapable of correcting the problem. Because the contractor never received the opportunity to address those concerns, the government lacked objective evidence that the deficiencies were incurable.<\/p>\n\n\n\n

The Proposed Spring Schedule Was Not an Anticipatory Repudiation<\/strong><\/h4>\n\n\n\n

The Army also argued that Jaxon\u2019s proposed spring completion schedule demonstrated an unwillingness to perform. The board disagreed. Anticipatory repudiation requires a clear, positive, and unequivocal refusal to perform contractual obligations. Instead of refusing performance, Jaxon continued submitting revised documentation, requested meetings with government personnel, and proposed a revised construction schedule that aligned with weather limitations acknowledged by the government itself. The board concluded that requesting additional time under those circumstances was entirely different from refusing to perform the contract.<\/p>\n\n\n\n

The Government\u2019s Burden in Default Terminations Remains High<\/strong><\/h4>\n\n\n\n

Perhaps the most important takeaway from the decision is that termination for default remains one of the government\u2019s most severe contractual remedies. A contractor\u2019s administrative shortcomings, deficient paperwork, or project delays do not automatically justify default termination. Instead, contracting officers must establish through objective evidence that timely completion is no longer reasonably possible. Courts and boards continue to describe default termination as a \u201cdrastic sanction,\u201d and agencies must satisfy a substantial evidentiary burden before exercising that remedy.<\/p>\n\n\n\n

Why the Board Converted the Termination<\/strong><\/h4>\n\n\n\n

Because the government failed to establish that default termination was justified, FAR 52.249-10(c) required the termination to be treated as one for the convenience of the government. The board therefore converted the default termination into a termination for convenience.<\/p>\n\n\n\n

However, it separately dismissed Jaxon\u2019s requests for reimbursement, lost business opportunities, emotional distress damages, and additional contract time because those affirmative claims had never been properly presented to the contracting officer under the Contract Disputes Act. Without a certified claim presented to and decided by the contracting officer, the board lacked jurisdiction to award those forms of relief.<\/p>\n\n\n\n

Practical Lessons for Federal Contractors<\/strong><\/h4>\n\n\n\n

Federal contractors should view this decision as a reminder that cure notices deserve immediate attention and careful documentation. Contractors should continue demonstrating their intent to perform even when disagreements arise over schedules, submittals, or project conditions. Requests for additional time, standing alone, rarely constitute anticipatory repudiation.<\/p>\n\n\n\n

The decision also underscores the importance of documenting communications regarding project delays, weather limitations, site access, and government-directed changes. When agencies acknowledge practical constraints affecting performance, those facts may become highly relevant if a termination decision is later challenged.<\/p>\n\n\n\n

Finally, contractors should remember that any request for monetary compensation, equitable adjustment, or contract time extension generally must first be submitted as a proper claim under the Contract Disputes Act before the boards or the U.S. Court of Federal Claims may consider that relief.<\/p>\n\n\n\n

Frequently Asked Questions<\/strong><\/h4>\n\n\n\n