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Decisions Of The Boards Of Contract Appeal: Don't Take Govt. Leniency As Waiver Of Duty To Meet Cont

Wednesday, February 02, 2011 01:34 am


Contract Termination

Appeal of: AmerescoSolutions, Inc., 2010 ASBCA No. 56811 (Nov. 15, 2010)

The government can encourage a delayed contractor to "muddle through" a project and still terminate that contractor for default later on based on a failure to meet the contract deadline.

AmerescoSolutions, Inc. (ASI) fell behind -- thanks in part to necessary asbestos remediation -- while performing on a U.S. Army Corps of Engineers (Corps) project in Huntsville, Alabama. Although the Corps allowed the contractor to continue to work past the contract completion date of December 2008, it eventually terminated ASI for default. ASI challenged the validity of that decision and sought to have the termination converted to one for convenience. The contractor claimed that it relied on the Corps' forbearance and incurred costs to continue to work toward contract completion with the government's knowledge and encouragement.

ASI argued that the government "cannot reserve the right to default a contractor based on a past deadline while simultaneously encouraging the contractor to continue post-deadline performance." Actually, the government can -- depending on (1) whether liquidated damages or other compensation for completed work is available and (2) how long after [...]

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