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'It's Almost Complete' Is Not A Good Argument Against Termination

Monday, November 01, 2010 04:40 am


Contract Termination

Appeals of: Al Khudhairy Group, 2010 ASBCA Nos. 56131, 56374 Lexis 62 (Aug. 5, 2010)

A contractor couldn't appeal its contract termination by arguing that the project was 95 percent complete. The government is entitled to cancel whatever portion of the contract remains.

The U.S. Army Corps of Engineers (Corps) hired Al Khudhairy Group (Al Khudhairy) to design and build a supply road of approximately 100 kilometers from the Kuwait border to central Iraq for $30 million. Al Khudhairy completed most of the work, but the Corps terminated the contract for default for "failure to make satisfactory progress on the remaining contract work items." The Corps also denied Al Khudhairy's claim for $11 million, which alleged 155 days of delay due primarily to late bitumen supply. (Bitumen is required to produce asphalt.) The contractor appealed both government decisions.

Al Khudhairy first argued that, at the time of termination, it had substantially completed the contract. According to the contractor's last payment estimate, the Corps had paid Al Khudhairy 95 percent of the contract price for its work. Al Khudhairy also pointed out that, a [...]

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