Performance Delays Justified Termination for Cause; Appeal of Molly Jessie Company, ASBCA No. 62134

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Appeal of agency decision to terminate contract for cause is denied. The agency terminated because the contractor had stopped performing. The contractor claimed it was unable to perform due to weather conditions. The board didn’t buy the bad weather story. Rather, it appeared the contractor had stopped working because it was too costly. The contractor’s cost of performance, however, was not the government’s fault. The termination was warranted.

Molly Jessie Company (MJC) had a contract with the Air Force to remove and prune some trees at a golf course. MJC did some of the work but stopped, claiming that rain and the resulting wet conditions made the work impossible. Although the weather improved, MJC refused to restart the work. MJC continued to invoice the Air Force, but the agency rejected the invoices because MJC was not performing.

Apparently MJC was unhappy with the amount it was being paid. It proposed to complete the work if the Air Force paid additional money. The Air Force refused and issued MJC a cure notice. MJC responded that it was willing to perform so long as the contract was modified to extend the completion date and to pay more money to the company for the work. The Air Force rejected MJC’s proposal and terminated the contract for cause. MJC appealed to the ASBCA.

The board noted that termination for default is essentially a government claim, so the government has the burden of proving the default was justified. Here, the board found the termination was justified. It was clear that a significant amount of work remained, and MJC was unwilling to do it unless it was paid more money. Nothing in the contract obligated the government to increase the price.

Once the government has shown that a default is justified, the burden shifts to the contractor to show the default was excusable. The board found that MJC had no excuse. The site did have some days when the ground was wet, but it was not always wet. The board was not convinced that the wet conditions prevented MJC from working. Rather, it appeared that MJC simply found the work too costly, but that, the board reasoned, was not the government’s fault.

MJC is represented by its principal Greg Ryan. The government is represented by Jefffrey P. Hildebrant, Lawrence M. Anderson and Lieutenant Colonel Scott A. Van Schoyck of the U.S. Air Force.

ASBCA - Molly Jessie Company (2)