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Halifax Engineering Inc. v. United States

Decided: October 2, 1990.

HALIFAX ENGINEERING, INC., APPELLANT,
v.
THE UNITED STATES, APPELLEE



Appealed from General Services Administration Board of Contract Appeals; No. 8173.

Archer and Mayer, Circuit Judges, and Stanley A. Weigel, District Judge.*fn*

Weigel

WEIGEL, District Judge,

Halifax Engineering, Inc. (Halifax) appeals a decision of the General Services Board of Contract Appeals (board), GSBCA No. 8173 (May 22, 1989). The board upheld a contracting officer's decision to terminate for default Halifax's contract to provide security guard services at the United States Department of State. We affirm.

Facts and Proceedings Below

On January 22, 1985, Halifax was awarded contract number GS-11-C-40212 to provide security guard services at the main Department of State building and six annexes. Halifax was required to begin performance on June 1, 1985. Under the terms of the contract's default provision, the government could terminate for default prior to the contract start date if it provided Halifax with a cure notice identifying the deficiencies it believed endangered Halifax's ability to begin performance and allowed Halifax a minimum of ten days in which to cure those deficiencies.*fn1

Halifax experienced difficulty in establishing an adequate radio network and in qualifying a sufficient number of personnel to staff the guard-posts at the State Department.*fn2 By telegram dated May 31, 1985, the government notified Halifax that it considered Halifax unable to meet the contract requirements and thus to be in default. The government requested that Halifax "show just cause as to why your contract should not be terminated and show that you can start service in ten days."

In response to proposals by Halifax, by letter dated June 6, 1985, the government informed Halifax that it had decided not to terminate the contract for default. The government set a new contract start date of July 1, 1985, and stated:

You are hereby notified that failure to start performance or be adequately prepared to start performance on July 1, 1985, will be grounds for immediate termination for default. No further cure notices or show cause notices will be issued.

On June 21, 1985, Halifax's radio network was tested and proved inadequate. During subsequent tests on June 24 and June 26, 1985, the radio network still failed to function properly. On June 26, 1985, the government terminated the contract based on Halifax's failure to make progress and inability to be prepared to commence performance on the new contract start date.

On appeal, the Board of Contract Appeals determined that the June 6, 1985, letter constituted a cure notice. The board further found that, as of June 26, 1985, Halifax was inadequately prepared to begin performance on July 1, 1985. Therefore, the board upheld the termination for default.

Discussion

Halifax argues that the June 6, 1985 letter was not a proper cure notice and, therefore, that it was not properly terminated for default prior to the new contract start date. As quoted above, the letter provided:

You are hereby notified that failure to start performance or be adequately prepared to start performance on July 1, 1985, will be grounds for immediate termination for default. No further ...


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