Govt.'s 'Continual Dialogue' With Contractor Vitiated Contract Termination

Thursday, August 30, 2018 6:28 am
September 2018 - Volume 40 Number 9

Contract Termination

Appeal of: Aerospace Facilities Grp., Inc., 2018 ASBCA Lexis 222 (July 19, 2018)

The government’s continued solicitousness after it had terminated a contract led the contractor to believe there was a chance the government had reconsidered its termination decision. Not so, said the government.

On September 27, 2012 the Department of the Army awarded a contract to Aerospace Facilities Group, Inc. (AFG) for the installation of equipment and monitoring systems to control corrosion at an aircraft facility in Corpus Christi, Texas. Then, on August 4, 2016, the Army terminated the contract for cause via email.

The government followed that email with another that stated the Army division chief was “very optimistic” that the parties could work together to “develop a solution that benefits all parties.” And in three subsequent telephone conferences that August, the government indicated to AFG that the parties could work together to come up with a win-win solution. Thus, AFG concluded that the government had not yet made a definitive determination on the contract termination.

Nevertheless, on September 13, 2016 the contracting officer (CO) issued a “final decision” demanding that AFG repay more than $7.8 million for unliquidated government installment payments. In November 2016, AFG appealed of the contract termination before the Armed Services Board of Contract Appeals.

After resolving several procedural issues regarding jurisdiction, the board addressed the issue of whether the government vitiated the finality of the final termination decision. The board agreed with AFG that the government’s actions caused the contractor to &l[..]