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Earned Payment Cannot Be Withheld Due To Imminent Default Payment-progress; Termination-default

Saturday, August 02, 2003 03:19 pm

 
Earned Payment Cannot Be Withheld Due To Imminent Default Payment-progress; Termination-default

A federal appeals court has ruled that the government could not withhold an earned progress payment due to an imminent default termination. But the government could take a set-off for liquidated damages.

The Navy awarded a contract to All-State Construction, Inc. to build a hazardous waste storage facility. All- State fell behind schedule. The Navy issued a "show cause notice"threatening termination for default.

All-State submitted a progress payment requisition reflecting 34 percent completion of the project. The Navy did not dispute the percentage of completion. But [...]

 
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