ABCD __________________________________________________ GRANTED IN PART: July 22, 1992 __________________________________________________ GSBCA 10614, 10996 MARTY'S MAID AND JANITORIAL SERVICE, Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Thomas R. Buresh and Elizabeth A. Sparks of Moyer & Bergman, Cedar Rapids, IA, counsel for Appellant. Samuel E. Skare and Adele Ross Vine, Office of Regional Counsel, General Services Administration, Kansas City, MO, counsel for Respondent. Before Board Judges LaBELLA, PARKER, and HYATT. Per Curiam. Pursuant to Rule 18, 48 CFR 6101.18 (1989), a hearing examiner was designated to conduct proceedings in this appeal. The Board adopts the following opinion recommended by the hearing examiner. Accordingly, these appeals are GRANTED IN PART. Respondent is hereby ordered to convert the termination for default to a termination for the convenience of the Government. In addition, appellant is awarded $450 in termination costs, $4,427.93 for deductions improperly taken for poor performance, $2,419.34 for the cost of extra work in stripping the floors, $774.18 for extra cleaning services, and $2,114.06 for the cost of additional supplies. This comes to a total award of $10,185.51, plus interest as provided by law. Opinion Recommended by Hearing Examiner Quigley These appeals, filed on April 25, 1990, and November 26, 1990, arise from a contracting officer's decision to terminate for default a contract for cleaning services for the United States Post Office and Courthouse in Dubuque, Iowa. On December 5, 1990, the Board ordered the appeals consolidated. A hearing was held on April 11 and 12, 1991, in Kansas City, Missouri, and continued on October 29 and 30, 1991, in Dubuque, Iowa. Following the parties' submission of post-hearing and reply briefs, the record was closed on February 6, 1992. The record in this case consists of the appeal file submitted by the General Services Administration (GSA), extensive documentation submitted by the appellant, and various other submissions, including cleaning materials and numerous videotapes and photographs showing the condition of the post office and courthouse building.[foot #] 1 Findings of Fact The Contract 1. On March 7, 1989, GSA awarded Marty's Maid and Janitorial Service (Marty's Maid or appellant) contract number GS-06P-89-GXC-0006, at a payment rate of $4,000 per month, for the performance of janitorial and related services at the United States Post Office and Courthouse in Dubuque, Iowa. Appeal File, Exhibit 2. The performance period ran from May 1, 1989, through April 30, 1990. The contract also contained options for two additional one-year periods, with each providing for slightly higher monthly rates. The Prior Contractor 2. Appellant's president testified that the prior contractor operated under a contract that contained specification requirements virtually identical to those in appellant's ----------- FOOTNOTE BEGINS --------- [foot #] 1 Each party objected to some of the opposing party's evidentiary submissions. To the extent that these objections sought to have the subject evidence stricken from the record, they are overruled. The reasons given for the objections, and the responses thereto, have however been taken into account by the Board in determining the weight to be accorded to the evidence proffered. In addition, while GSA failed to produce a startling number of documents during discovery, appellant succeeded in getting those documents by other means and was given the opportunity to introduce those documents into evidence. Because no prejudice resulted from GSA's failure to produce various documents, appellant's motion for sanctions is denied. ----------- FOOTNOTE ENDS ----------- contract. Transcript, Vol. 1 at 190; Appellant's Exhibit F. The prior contractor held that contract, which was awarded on December 10, 1985, for approximately three and one-half years. Appellant's Exhibit F at 1. 3. For that entire contract period, only twenty-one daily inspection reports (Form 1181-A) were produced. Appellant's Exhibit G. Out of approximately 650 periodic cleaning tasks that should have been performed during that period, only twenty-three periodic inspection reports (Form 64) were produced. Appellant's Exhibit H. GSA advanced no explanation for the lack of inspection reports, despite the fact that GSA's on-site maintenance inspector (also referred to as the Quality Control Specialist) and GSA's assistant field office manager testified that the forms were always given to the on-site maintenance inspector. Deposition of On-Site Maintenance Inspector at 28-29; Deposition of Assistant Field Office Manager at 35-36. 4. The inspection reports produced for the prior contractor showed no deductions for unsatisfactory cleaning. Transcript, Vol. 1 at 191; Deposition of On-Site Maintenance Inspector at 24-25. Appellant's president alleges that the same types of remarks were made on its inspection reports as on the prior contractor's but only on appellant's reports were deductions taken for unsatisfactory cleaning. Transcript, Vol. 1 at 194. 5. Appellant's president and vice president testified that before performance even began, a postal worker warned appellant "that we would never get the [contract] and if we did, we'd never keep it because they'd make sure that they'd make it extra hard for us and they would get us out because we were taking it away from one of their buddies." Transcript, Vol. 1 at 154. Although appellant did not realize it at the time, this was a reference to the prior contractor. Transcript, Vol. 2 at 239-41. 6. Prior to award of appellant's contract, the postmaster expressed his concern to GSA about appellant's vice president, whom he "had been advised had a record of bankruptcy and a poor credit record." Id. The postmaster testified that he presumes that he got this information from the previous contractor, although he "can't swear . . . it." Deposition of Postmaster at 19. Despite the postmaster's concerns, appellant was awarded a certificate of competency (COC) from the Small Business Administration (SBA). 7. During the period that appellant cleaned the building, the prior janitorial contractor had a contract with the post office to wash the post office jeeps in its parking lot. Transcript, Vol. 1 at 305. The contracting office considered the question of whether appellant was responsible for removing the ice that might form as a result of the jeep washing, Appellant's Exhibit BA, but the record does not reflect that any conclusion was reached on the issue. 8. Appellant's president testified that the prior contractor had a reserved parking space while he held the contract, but that appellant was told by the on-site maintenance inspector that there was no reserved space for the cleaning contractor. Transcript, Vol. 1 at 239. GSA stated in its brief that the prior contractor was allowed to use the parking space in question because no other tenant had a use for it. Respondent's Post-Hearing Brief at 3. Appellant testified, however, that the parking space which was used by the prior contractor had the prior contractor's name on it and he was allowed to continue using it throughout appellant's contract. Transcript, Vol. 1 at 242-43. 9. In addition, throughout appellant's contract, the prior contractor was allowed into the post office security area to socialize. Transcript, Vol. 1 at 241, 347. Appellant's vice president testified that he saw the prior contractor around the post office workroom almost everyday. Transcript, Vol. 2 at 289. When appellant complained to GSA about the presence of the prior contractor in the post office, it was told that GSA had no control over the situation. Transcript, Vol. 1 at 265. However, the prior contractor also spent a great deal of time in the GSA on-site maintenance inspector's office. Transcript, Vol. 2 at 109, 170. 10. Appellant alleges that the prior contractor simply used a power scrubber to scrub and wax the floor rather than strip and wax the floor, which would account for the wax build-up found by appellant. Transcript, Vol. 1 at 250-51; Transcript, Vol. 2 at 278-79. Site Visit 11. Paragraph 12 of the solicitation provisions advised: Offerors or quoters are urged and expected to inspect the site where services are to be performed and to satisfy themselves regarding all general and local conditions that may affect the cost of contract performance, to the extent that the information is reasonably obtainable. Appellant's Exhibit J at 2. 12. In mid-November, 1988, appellant's vice president toured the building with the on-site maintenance inspector for forty-five minutes. Transcript, Vol. 2 at 219. Appellant's vice president inspected the floor for damage and asked what the previous contractor had done. Id. at 220. He was told that the previous contractor had followed the contract specifications, which required the floor to be stripped every six months. Id. at 226-27. He was told that the previous contractor had used a "walk-behind," which was standard for the industry, and that he had had no problems with the floor. Id. at 228. 13. Appellant's vice president, who considers himself an expert in the janitorial field, testified that it is impossible to tell how thick floor wax is just by looking at it, Transcript, Vol. 2 at 217, 220-22, or even by scraping it with a key, which appellant did. Id. at 358-62. He stated that it would be necessary to put down chemicals and see how the wax stripped off before the thickness could be known. Id. at 274-75. 14. Normally appellant's vice president does not worry about the thickness of the wax on the floors he cleans because he has a heavier-than-usual stripping and waxing machine. Transcript, Vol. 2 at 224-25. In addition, he stated that he did not worry about the floors in question because they looked nice. Id. at 226-27. 15. During the site visit, appellant's vice president was shown three security areas - the post office window area, money and receiving area, and "SADIR" room. Transcript, Vol. 2 at 229, 234-35. When appellant's vice president asked if there were any special cleaning schedules, he was told by the on-site maintenance inspector that everything was in the contract. Id. at 239. 16. Appellant's vice president testified that while the building was being maintained at the time of the site visit, the prior contractor stopped cleaning once he learned that he had not won the follow-on contract. Transcript, Vol. 2 at 242. The follow-on contract was awarded on March 7, 1989, less than two months before performance by appellant began. Appeal File, Exhibit 2 at 2. Appellant's Work Hours 17. The contract detailed, at Part III, Section J, Exhibits 2A through 2F, work to be performed and requirements for the frequency of each work item. Appeal File, Exhibit 2. Of per- tinence to this appeal are the requirements of Exhibit 2A, entitled "Cleaning Work and Quality Requirements," and Exhibit 2F, entitled "Postal Space Cleaning and Quality Requirements." The contract stated that, with the exception of certain additional or irregular items of service, "all work shall be performed within the normal five day week observed by the building occupants, Federal holidays excluded, but after the normal working hours of the building occupants, not to exceed 10 p.m., unless specifically approved by the Contracting Officer's Representative. No work shall be performed on weekends when the Government has no force on duty available for the inspection of the contractor's work unless prior written approval of the contracting officer's representative is obtained." Id. at 13 (emphasis added). 18. The contract specified that the official working hours of the building's occupants were from 5 a.m. to 8 p.m. for the post office and from 8 a.m. to 5 p.m. for the other occupants. Appeal File, Exhibit 2 at 40. The contract further specified that certain "security areas", of which the post office was the only one identified, had special requirements: In some of these areas, cleaners are permitted to enter and perform their work unescorted. In others, a cleaner will be admitted only by an authorized occupant who will observe the cleaner until he has finished his work. In some of the latter described areas, the cleaning work may be done at night and some may be done during daytime office hours. The contractor shall inform himself of the circumstances attendant upon the cleaning of security areas in the building covered by this contract and include in his bid all costs in connection therewith. Id. at 31, 41. 19. At a post-award meeting held on April 26, 1989, attended by appellant's president and vice president, GSA's on- site maintenance inspector, and GSA's assistant field office manager, appellant's proposed schedule for cleaning was among the items discussed. Transcript, Vol. 1 at 199. Although appellant informed the GSA representatives that the cleaning work would be performed in the evening, and the GSA representatives approved this schedule, upon appellant's arrival on May 1, the on-site maintenance inspector ordered appellant to clean the post office in the morning before 8:00 a.m. and then to return after 9:30 a.m. to clean the carrier section of the post office by 2:00 p.m. Id. at 200-01, 203-07. Additionally, the post office refused to allow cleaning at any time after 2:00 p.m. in any part of its space. Id. at 206-07. 20. While appellant voiced its objections regarding the post office cleaning schedule to the on-site maintenance inspector, it did not go to the contracting officer immediately because it "didn't want to create waves" and it knew that there would be "a little test period by the post office." Transcript, Vol. 1 at 201-02. 21. Appellant's president and vice president intended for its vice president to work one hour each weekday morning and for both to work from 5 p.m. to 9 p.m. each weekday evening, plus one and a half hours each Saturday morning, for a total of forty- eight hours per week. Transcript, Volume 1 at 131-32, 135. In addition, appellant's president and vice president intended to spend twenty-eight hours per month doing "heavy periodic work", which included cleaning the venetian blinds, stripping and waxing the floors, thorough vacuuming and dusting, and high cleaning and windows, id. at 132, 136, although they believed that this periodic work could be done during their regular weekday hours. Id. at 136-37. In fact, according to appellant's estimates, during more than half the weeks it held the contract, appellant spent well over 100 hours per week cleaning the building. Appellant's Exhibit DD(c). 22. Appellant's president had a full time clerical job until 4:30 p.m., Transcript, Vol. 1 at 121, appellant's vice president "had contract work during the day", id. at 199, and both worked on another cleaning contract from 9 p.m. to midnight. Id. at 121, 135. Despite this, appellant's president and vice president intended to do all the cleaning required by this contract by themselves for the first year. Id. at 155.[foot #] 2 23. Appellant originally believed that it could clean the building lobby after 5 p.m., Transcript, Vol. 1 at 164-65. However, after commencing performance, it learned that the lobby was considered part of the post office, id. at 203-04, and the post office required that its lobby area be cleaned at a time when it was not open to the public, from 8:00 a.m. to 11:00 p.m. Id. at 205-06. Appellant had keys to part of the building, but not to the post office. Id. at 166. Although the post office was listed in the contract as a security area, appellant thought after the site visit that the only areas where an escort would be needed would be the post office window and money and receiving areas. Id. at 149-50, 167. Appellant did not anticipate that it might have access problems if it was not able to get its periodic work done during the evening, because it thought it could get permission from the GSA field office manager (who was also the contracting officer's representative) to do the work at another time. Id. at 168-69. 24. Appellant's vice president stated that when appellant commenced performance under the contract, there was so much dust throughout the entire building that everything had to be thoroughly cleaned, not just dusted. Transcript, Vol. 2 at 243- 49. He testified that some of the cleaning he did, such as of the radiator grates, had not been done in years, and he surprised both the on-site maintenance inspector and his own employees by doing it. Id. 25. By May 15, 1989, appellant had already hired three employees to help with the work. Transcript, Vol. 1 at 212; Appellant's Exhibit DD(c). It anticipated keeping the extra employees for thirty days until the building could be brought "back to a maintainable condition." Id. at 213. Appellant's president also took a one-month leave of absence from her job to ----------- FOOTNOTE BEGINS --------- [foot #] 2 Although appellant's president stated that she had no intention of hiring outside workers, Transcript, Vol. 1 at 155-56, appellant's vice president acknowledged that, as the stripping and waxing of the floors required as many as four people, he did plan to hire "spot laborers" to help with that. Transcript, Vol. 2 at 267-71. ----------- FOOTNOTE ENDS ----------- work on the contract, id. at 203-04, and finally quit her job in November. Id. at 511-12. In addition, because the contract required that appellant have an individual available during working hours, and GSA did not believe that an answering machine or that calling appellant's president at work was sufficient, appellant hired a receptionist, who remained in appellant's employ from June 6, 1989, to January 30, 1990. Id. at 231-32, 235-36. Appellant's president testified that the receptionist performed no work but was simply there in case an extra work order or emergency came in and that during the course of the contract none did. Id. at 236. 26. By the end of August, appellant believed that other than the floors, the building was in good enough shape to require only two people to clean it. Transcript, Vol. 1 at 272. 27. Appellant requested clarification on the lawn specifications in May, because they appeared to be impossible to perform. Transcript, Vol. 1 at 260. It was not until September that GSA deleted the lawn specifications from the contract. Id. at 264. 28. Appellant was required to do extra cleaning as a result of remodeling which was done in the space leased by the Social Security Administration. Transcript, Vol. 1 at 219-21. After several telephone calls and letters, in October GSA paid appellant for the extra work. Id. at 265; Transcript, Vol. 2 at 189. Deductions for Unoccupied Space 29. Part 1, Section G, Paragraph 8 of the contract provided: When blocks of space totaling 5,000 square feet or more are expected to remain unoccupied for 30 calendar days or longer, deductions will be made from the monthly payments due the Contractor. Appeal File, Exhibit 2 at 26. Paragraph 9 of the same section detailed the method and rate for computing the deduction, providing that "[t]he deduction rate per day . . . shall be multiplied by the number of work days the space was not occupied." Id. at 26-27. 30. Throughout the entire performance period of appellant's contract, GSA imposed monthly deductions based on 9,274 square feet of office space in the building that remained unoccupied and that had been unoccupied at least since the period that the solicitation was bid. See Transcript, Vol. 1 at 176-77. GSA initially imposed the following deductions for the unoccupied space: May 1989 - $716.51 June 1989 - $693.40 July 1989 - $693.40 August 1989 - $716.51 September 1989 - $693.40 October 1989 - $716.41 November 1989 - $693.32 December 1989 - $716.44 January 1990 - $508.44 Appellant's Exhibits S, T, X, AD, AJ, AN, BC, BL, CV, CX. In October, however, GSA reimbursed appellant for those deductions taken for the period May 1 through June 9, 1989, in the total amount of $924.53, Appeal File, Exhibit 24(a), because appellant was not informed of the vacant space until June 9. Appellant's Exhibit AH. 31. By letter dated February 6, 1990, GSA again determined that the deductions were incorrectly computed for the period of June through December 1989, because they had been based on the number of calendar days in the month rather than the number of work days. Appellant's Exhibit CX; Transcript, Vol. 1 at 172. Ultimately, the total deductions claimed by GSA pertaining to the unoccupied space amounted to $3,859.52, instead of the original $6,147.83. Deductions for Unsatisfactory Cleaning 32. The contract provided, at Part I, Section G, criteria for deductions when services have not been satisfactorily performed, "as determined by the Contracting Officer's designated representative." Appeal File, Exhibit 2 at 25-26. Deductions would be taken at established rates pertaining to the various tasks to be performed, and the rates for those deductions were set out at Figure G-1 of that section. Id. at 28-29. 33. The contract required GSA to inform the contractor, in writing, of the type and dollar amount of proposed deductions by the tenth workday after the month for which deductions were taken. Appeal File, Exhibit 2 at 24. The contractor would then have ten workdays from receipt of notification of the proposed deductions to provide reasons why the deductions were not justified. Id. at 25. The contract specified that payments were not to be withheld because of disputes over deductions, but rather that GSA could adjust subsequent payments if the deductions were later found to be warranted. Id. 34. Beginning in July, however, GSA repeatedly took "auto- matic deductions" from payments it made to appellant. Transcript, Vol. 1 at 296-99. GSA simply forwarded each monthly check minus the deductions, and included an explanation as to why the deduction had been taken. Id. Although appellant wrote several letters objecting to these "automatic deductions," appellant never received responses to these letters. Id. 35. GSA imposed the following deductions for unsatisfactory cleaning over the period of appellant's performance: July 1989 - $216.15 August 1989 - $84.13 September 1989 - $322.61 October 1989 - $68.83 November 1989 - $69.01 December 1989 - $2,215.40 January 1990 - $2,212.53 Appellant's Exhibits AD, AJ, AN, BC, BL, CV, CX. The SBA COC Specialist, who received copies of the monthly deductions letters from GSA[foot #] 3, testified that the $760 total deduction for the months of July through November, for a monthly average of $150, was not above the normal amount of deductions he had seen on other contracts. Transcript, Vol. 1 at 426-30. He stated that these deductions provided no indication that the contractor was not performing satisfactorily. Id. at 430. 36. However, the monthly deductions of over $2,000 for December and January indicated that something had changed. Transcript, Vol. 1 at 431. Appellant's cumulative unsatisfactory cleaning rating prior to December was 7.4 percent, whereas for December and January it was 54.4 percent. Appellant's Exhibit CR; Transcript, Vol. 2 at 98-100. Appellant's president testified that its cleaning procedures did not change from November to December. Transcript, Vol. 2 at 112. The person inspecting appellant's cleaning did, however, change. Appellant's Exhibits CP, CT. Appellant provided several examples of unsatisfactory notations made in the December and January inspection reports which it believes were unfair, such as requiring doors to be cleaned by 8 a.m. but not inspecting them until 11 a.m., by which time the doors were already dirty. Transcript, Vol. 2 at 117-18. 37. In July, 1989, in a building inspection performed every other year, appellant received a 92.8 percent rating on its cleaning. Appellant's Exhibit AB. 38. Appellant began complaining, as early as July, of difficulties it encountered with various Government employees that undermined its efforts to perform under the contract. ----------- FOOTNOTE BEGINS --------- [foot #] 3 While the SBA did not receive the daily inspection reports themselves from GSA, the monthly reports which they received did list the reasons for each of the deductions, based on the daily inspection reports. Transcript, Vol. 1 at 465, 469. ----------- FOOTNOTE ENDS ----------- Appellant's Exhibit AC. In a report dated July 20, 1989, following an inspection of the facility at the request of appellant, Transcript, Vol. 2 at 290-91, the SBA liaison noted appellant's allegations that the on-site maintenance inspector "constantly harasses them" and "is writing up frivolous inspection reports." Appellant's Exhibit AC at 4. In addition, the report noted appellant's allegation that it "ha[d] been told by several postal employees that they intend to be very critical of the contractor's performance hoping the contractor will abandon the effort." Id. 39. In his report, the SBA liaison cited three main problem areas - contract administration, communication, and an unclear division of responsibilities between the parties, and he gave examples of each. Appellant's Exhibit AC; Transcript, Vol. 1 at 369-72. The SBA liaison testified that an example of the contract administration problems was the failure by the contracting office to reach a decision on the lawn fertilization specifications, which were not deleted from the contract until appellant had made repeated requests for clarification. He gave as an example of communication problems the personality conflicts between appellant and the on-site maintenance inspector, and the fact that both were "temperamental." The SBA liaison testified that the unclear division of responsibility arose in part because appellant was not able to bring concerns about the post office, the third party involved in the contract, to the on-site maintenance inspector, but instead had to go to the contracting officer or field office manager and that day-to-day concerns should not have to be brought to that level. Transcript, Vol. 1 at 369-70. 40. The SBA liaison testified that he was concerned that appellant had tried to "serve three masters" - GSA, the Post office, and the on-site maintenance inspector, Transcript, Vol. 1 at 372, and in the report he recommended a meeting of all concerned parties to resolve the issues. Appellant's Exhibit AC at 6. 41. On August 23, 1989, in a meeting organized by the SBA, the parties met to discuss and attempt to resolve the matters raised in the SBA report. Appellant's Exhibit AH; Transcript, Vol. 1 at 260-61. The SBA COC Specialist testified that each of the points raised in the SBA July report was discussed and an action proposed for each. Transcript, Vol. 1 at 433-34. Appellant's president prepared a list of thirty-five complaints to discuss at the August 23 meeting. Appellant's Exhibit AG. Those were discussed briefly, but the field office manager did not treat these items very seriously because they were not on the agenda. Transcript, Vol. 1 at 266, 434. 42. On October 16, 1989, representatives of the SBA, the local congressman's office, GSA, and appellant's president and vice president met in order to discuss appellant's complaints, including harassment by the post office, the condition of the building at the start of the contract, and GSA's failure to respond to appellant's letters or address appellant's problems concerning the contract. Appeal File, Exhibit 4; Transcript, Vol. 1 at 321-30. Appellant's president testified that the first topic of discussion at that meeting was appellant's working conditions, which had deteriorated "to the point where we were being harassed every day by the post office. We were being called stupid and incompetent and we were not being allowed to perform our work . . . ." Transcript, Vol. 1 at 323. 43. The SBA liaison testified that some issues were clarified at the meeting, such as that it was the responsibility of the carriers to clean their work stations. Transcript, Vol. 1 at 382, 388, 410. After watching appellant's vice president remove several sheets of built-up wax from the floor, the SBA liaison urged the assistant field office manager to call the contracting office that day to get a resolution of the floor cleaning issue. Id. at 383-85. The SBA Liaison agreed that there were some things that appellant could probably have done differently, but that there was probably not much appellant could have done for the floor. Id. at 386, 411. 44. Just as at the August 23 meeting, the assistant field office manager discussed at the October 16 meeting the fixtures which needed to be repaired, Transcript, Vol. 1 at 328-30, 390, and promised that they would be. Id. at 328-30. The assistant field office manager agreed to work out a new schedule for the post office cleaning and the representative from the congressman's office said he would talk to GSA about post office harassment. Id. at 389-91. 45. The SBA Liaison stated that he attended the meetings in July and October to get an understanding of the contractor's alleged problems. Transcript, Vol. 1 at 405. He stated that he made his recommendations from the contractor's viewpoint and that he had not spoken with the on-site maintenance inspector. Id. at 417. The SBA's interest in seeing the contractor succeed, however, was not based on having loaned any money to the contractor in order for it to perform the contract. Id. at 464. Floor Cleaning 46. Appellant's president alleged throughout the contract period that the predecessor contractor had failed to maintain the floors as required under its contract, and that this failure made appellant's job of stripping, sealing, and rewaxing the floors far more difficult. Transcript, Vol. 1 at 250-52. 47. Appellant began stripping and waxing the floors in July 1989. Transcript, Vol. 1 at 215, 316. Despite using increasingly strong stripper formulas and even silica sand, appellant was unable to strip down to the bare floor because of the excess wax it encountered. Id. at 269-71, 331-33; Transcript, Vol. 2 at 278. Appellant's vice president eventually resorted to pushing the stripping machine while appellant's president sat on top of it, so as to provide extra weight to get the wax up. Id. at 248. Appellant introduced various demonstrative exhibits to show just how thick the wax was. Appellant's Exhibits BE, DR, DS. Appellant finally tried a product similar to paint remover, along with a razor blade scraper, to remove the wax. Much of the work, especially around the edges of the floors, postal boxes, and carrier cases, had to be done on hands and knees. Id. at 334-36. Appellant's vice president testified that the stripping and rewaxing work took three times as much effort as it should have. Transcript, Vol. 2 at 282-83. 48. Appellant's vice president testified that he protested to GSA several times that the extra work caused by the wax buildup was not required by the contract, but that GSA insisted that it was. Transcript, Vol. 2 at 309. 49. By letter dated October 4, the field office manager wrote to appellant, reminding it that "Item 22 of the cleaning requirements of the subject contract . . . requires that in the first 90 days of the contract and any option year, all hard floors are to be stripped, sealed and four coats of wax applied, . . . ." Appellant's Exhibit AM. He noted that the work was sixty days overdue and ordered that it be completed by October 30, or "the Government will have the work performed by other means and the costs . . . deducted from your monthly payments." Id. According to appellant, although the field office manager had agreed at the August 23 meeting that appellant could not clean the post office if it was not given access to it, he later provided no assistance in securing access and required appellant to work it out with the post office. Transcript, Vol. 1 at 277. 50. On October 14 and 15, appellant made a second attempt to strip the lobby area and the corridors because GSA did not accept its first attempt in July. Transcript, Vol. 1 at 316-18; Appellant's Exhibit DX. Some other areas did not have to be redone because they had been stripped completely in July. In the areas that did have to be redone, however, appellant found the work particularly difficult to complete because of the extensive buildup of wax that existed on much of the floor. Transcript, Vol. 1 at 320. The post office floors were not done at that time (nor had they been done in July) because appellant had difficulty gaining access to the space. Id. at 273-74, 314-15, 318. Appellant knew that removing the excess wax would require extra time, and as it did not want to disrupt the post office, it had requested access during non-working hours. Id. at 273-74. However, when appellant asked the on-site maintenance inspector to secure access during a time other than 10 a.m. to 2 p.m., it was told that the previous contractor had not required extra time and that appellant would have to work out access itself. Transcript, Vol. 1 at 224-25. Cleaning of the Post Office 51. On December 10, 1985, in a letter to GSA Field Office Management, the postmaster stated that: I am advised that a new custodial contractor will begin services for our facility on March 1, 1986. Accordingly, this is to request that his contract specify, (or that he be instructed), to perform his duties on our behalf in accordance with the following: 1. Stamp window area and front offices and rest room facilities . . . to be serviced between 7:00 a.m. and 8:00 a.m. Monday through Saturday. 2. All other work room areas to be done between the hours of 9:30 a.m. and 2:00 p.m. . . . Time consuming cleaning, (i.e., stripping floors, scrubbing floors, waxing, etc.) to be performed when carriers are on the street* normally between 9:30 a.m. and 2:30 p.m. This latter service to be performed in sections as time constraints required. *Saturdays preferred. Appellant's Exhibit E. 52. The field office manager testified that he did not believe that the above schedule was ever incorporated into either appellant's contract or any of the contracts awarded prior to appellant's because it was "easier to sit down with the postmaster and the contractor and say, 'Okay, this is what were going to do'." Deposition of Field Office Manager at 17. 53. After appellant learned that some post office employees worked until 7 p.m., and requested that, therefore, it be given new hours, the assistant field office manager produced a schedule that for the first time allowed appellant to clean some of the post office between 4 p.m. and 7 p.m., although some work still had to be done before 8 a.m. and some had to be completed before 2 p.m. Appellant's Exhibit AW; Transcript, Vol. 1 at 484. Appellant was only allowed to keep this schedule for a short time, however, and then the schedule reverted back to the one originally desired by the post office. Transcript, Vol. 2 at 345-46. 54. Appellant testified that it received authorization to strip and wax the post office during nonworking hours for the first time on Saturday, October 7. Transcript, Vol. 1 at 278, 286. Although appellant worked on the floors from 4:30 a.m. until 6:30 p.m. on October 7, it did not make very much progress because it had to stop several times for postal carriers going in and out. Id. at 278, 282. Appellant produced a Form 64 periodic inspection report, Appellant's Exhibit AP, and copies of checks showing purchases made in preparation for the stripping, Appellant's Exhibit AQ, to show that it did not begin stripping the post office floors until October 7. 55. GSA, however, had in its files a memo from the assistant field office manager showing that the stripping was begun on September 30. Appellant's Exhibit AO. According to that memo, on October 5, the postmaster called the contracting officer to complain about appellant's cleaning efforts. Id. The postmaster alleged that when appellant began an effort to strip the floor in the post office on September 30, "it flooded with water as the carriers attempted to come in and out of the area as they loaded their mail causing an unsafe condition." Id. 56. On October 13, 1989, appellant requested a "30 day extension to allow for stripping and waxing of 'multiple coats' of finish on the floor throughout the . . . building." Appellant's Exhibit AT. Appellant testified that GSA recommended applying for the extension. Transcript, Vol. 1 at 292-94. To substantiate its request, appellant attached a letter from a sales coordinator from the Higley Chemical Company dated October 13, which indicated that the basement floor had a permanent seal that required removal, the second and third floors were "in need of complete refurbishing," the back mailroom had "excessive wax buildups," and that stripping and waxing would be very labor intensive. Appellant's Exhibit AU. 57. On October 25, the field office manager notified appellant that the stripping of the basement corridors was acceptable and that it could proceed to apply the wax. Appellant's Exhibit AY. 58. On October 31, the field office manager wrote to a GSA contracting official that "after reviewing the situation concerning the janitorial services contract," he had concluded that it was in the best interests of GSA to pick up the year option on the contract rather than to readvertise it as previously requested. Appellant's Exhibit AZ. 59. From November 11 through 16, after securing access to the post office on its own, appellant worked on stripping and finishing the post office floors and the second and third floor corridors and lobby areas. Appellant's Exhibits BD, CI; Transcript, Vol. 1 at 499-503. On November 14 and 15, at appellant's request, the post office made special arrangements to pay a postal employee overtime to be at the site, from 5:00 p.m. to 5:00 a.m., to allow appellant access to the area in order to do the stripping and finishing work. Appellant's Exhibits BF, BH at 7, CJ. Although appellant worked long hours, it did not make much progress, as much of the work had to be done on hands and knees and it did not want to start working on an area which it could not finish. Transcript, Vol. 1 at 499-505. Because it had not finished the post office floors, appellant tried repeatedly to obtain assistance from GSA in securing access to the post office, but GSA said that access was appellant's problem. Id. at 506-09. Appellant told GSA that it needed "a couple more fourteen hour days" to finish. Id. at 509-12. 60. On November 20, the contracting officer's assistant informed the contracting officer that their office had no record of responding to appellant's letter of June 11, nor any record of having sent appellant any correspondence regarding the August 23 meeting with the SBA. Appellant's Exhibit BA. The contracting officer testified that he never saw the SBA report of July 20, Deposition of Contracting Officer at 99, nor a letter from the field office maintenance inspector to the field office manager of August 4 about appellant's complaints, even though this was the type of letter he should have received. Id. at 103-04. 61. On November 22, the contracting officer wrote to appellant, stating that "you have continually brought these matters to our attention. . . . This agency feels these issues have been addressed and corrective action has been taken to the best of our ability. To date, you have been reimbursed all monies due." Appellant's Exhibit BB. In response to appellant's allegation that the on-site maintenance inspector continued to harass appellant, the contracting officer stated in the letter that there was no evidence of harassment, but that if personality problems did exist "this will no longer be a concern," as the on- site maintenance inspector was retiring from his position. Id. The contracting officer noted finally that "we have consistently, in good faith, attempted to resolve any problems that have arisen." Id. The SBA COC Specialist stated that when he received a copy of this letter, he concluded that, in the absence of anything to indicate otherwise, appellant's performance must be satisfactory. Transcript, Vol. 1 at 436-37. 62. On November 22, the postmaster wrote to the field office manager, enclosing copies of letters from the presidents of two postal worker unions at the Dubuque Post Office, complaining about appellant's performance. Appeal File, Exhibits 5a, 5b; Appellant's Exhibit BH at 3-6. The postmaster additionally enclosed a report from a postal service supervisor concerning appellant's efforts to strip and clean the post office floors on November 14 through 16. Appellant's Exhibit BH at 7. That report expressed extreme dissatisfaction with appellant's efforts, noting that after the post office had made special efforts to make the space available at appellant's request, appellant failed to work for the full time expected and had accomplished relatively little. Id. The postmaster added that "[i]t is our fervent hope immediate action can be taken to restore floor to top shape and replace subject contractors." Id. at 3. 63. GSA's assistant field office manager visited the site on November 28 and 29, meeting with both parties. Appellant's Exhibit BI. He noted that appellant "continued the same complaint about postal workers and management not cooperating with them," specifically claiming "that the Post Office does not give them enough time in blocks to effectively be able to strip and wax the postal floor." He also noted his concern that appellant's lack of staff was hurting its periodic cleaning efforts, especially in the post office. Id. 64. On November 28, GSA advised appellant of its intention "to exercise its first option under the . . . contract for the period May 1, 1990, through April 30, 1991." Appellant's Exhibit BG. 65. On November 29, the postmaster wrote to the contracting officer that the quality of cleaning service constituted a violation of the lease between GSA and the Postal Service and again requested termination of appellant's contract. Appeal File, Exhibit 5d. In his letter, the postmaster reminded the contracting officer that prior to award of the contract, the postmaster had expressed his concern about appellant's vice president's alleged "poor credit record," and that given this information, the postmaster "would have hoped that GSA would have provided extra oversight of contractor's performance." Id. The postmaster also questioned whether it was "realistic to assume the workload could be performed at a substantial reduction in fee paid to previous contractor. . . I have been reminded that in years past when GSA had a full maintenance crew, two men spent a full day maintaining our workroom floor." Id. 66. During December 1989, appellant submitted three memoranda complaining of specific instances of harassment by post office and GSA employees. See Appellant's Exhibits BP, BR, BX. 67. On December 4, the postmaster wrote to the contracting officer, enclosing "pictures evidenc[ing] the unbelievably poor conditions of our workroom floor, as did considerably more pictures sent much earlier." Appellant's Exhibit BJ. The postmaster requested the contracting officer to "[p]lease take immediate action to replace contractor and restore floor." Id. 68. On December 7, the contracting officer received a telephone call from a post office official who stated that the postal unions were "making noise" and complaining about appellant. Appellant's Exhibit BK. The First Cure Letter 69. On December 8, the field office manager sent a cure letter advising appellant of a number of problems with appellant's performance under the contract and setting out a schedule for remedying those problems. Appeal File, Exhibit 6. Among other items, he wrote that appellant had failed to perform the "annual high cleaning throughout the building," which had been scheduled for June; the "semi annual stripping and refinishing of the Postal Work Room Floor and Swing Room," scheduled for June and October; the "semi annual cleaning of all building exterior windows," which was to have been completed by the end of October; and the monthly dusting of "lock boxes, mail cases and venetian blinds in the Postal area," which was to have been performed in November. Id. He extended the dusting due date to December 15 and required the high cleaning and floor work to be completed by December 22 and the windows by December 29, or "the Service will be procured elsewhere and the resulting costs will be deducted from your contract payment." Id. The field office manager sent a copy of the cure letter to the postmaster and the post office official who called the contracting officer on December 7. Id. 70. Regarding the December 8 cure letter, appellant's president testified that the only area in which the high cleaning was not completed by July was the post office, and that was because the high cleaning created so much dust that appellant could not do it while the postal employees were there. Transcript, Vol. 1 at 512. When appellant attempted in August to do the high cleaning in the post office between 10 a.m. and 2 p.m., the post office employees told them to stop. Transcript, Vol. 2 at 72-73. Appellant alleges that the ventilation pipes in the post office had never been cleaned before and it introduced a videotape to show the amount of dust that was created when they were cleaned for the first time. Appellant's Exhibit DQ; Transcript, Vol. 1 at 536-38. As soon as appellant's president received the December 8 letter, she called the GSA Field Office, but was told that appellant was responsible for getting access. Transcript, Vol. 1 at 518-19. 71. As for the stripping and refinishing of the post office workroom and swing room, GSA was not willing to provide appellant with help in getting access, and the postmaster and the Superintendent of Postal Operations were not speaking to appellant since the uncompleted attempt to strip the post office floors in November. Id. at 513. 72. Regarding the exterior window washing, in November appellant told the assistant field office manager that it had scheduled a contractor to clean the windows in late December. Transcript, Vol. 1 at 509-10, 514. Appellant had previously discussed doing the windows itself, but the assistant field office manager preferred that an outside contractor do the windows. Id. 73. Concerning the dusting of the mail slots, appellant presented testimony that it had written to the contracting office to say that it could not dust the mail slots because it was prohibited from touching the mail which lay in the slots. Transcript, Vol. 1 at 514-15. Appellant received no response from GSA. Id. 74. The December 8 cure letter also stated that on December 5 it had been noted that appellant's representative was not wearing an approved uniform with the company logo "easily identifiable and affixed in a permanent or semi permanent manner." Appeal File, Exhibit 6. Appellant's president testified that all except its newest employee had laminated name tags (the newest wore a company business card with his name on it attached to his uniform), and appellant had not received a complaint about this from GSA before. Transcript, Vol. 1 at 515- 17. On October 4, the field office manager had ordered appellant to provide its employees with uniforms and to provide all necessary security paperwork by October 16, and to use GSA Form 64 for reporting and scheduling work, as required by the contract. Appellant's Exhibit AM. 75. Appellant's president testified that the uniform appellant had established for its employees, a white blouse or shirt and black slacks, had been approved by GSA. Transcript, Vol. 1 at 308-09. The contracting officer testified that a white shirt and black slacks could be a uniform. Deposition of Contracting Officer at 116. Appellant's president testified that the uniform was worn by all employees, with one lapse on August 9, when an employee arrived wearing a white blouse with a black outline printed on it. Id. at 309. No subsequent lapses occurred, and GSA never indicated that the uniform adopted by appellant was inappropriate. Id. GSA did not dispute this. 76. Concerning the issue of fingerprint charts and a personal history form for appellant's employees, appellant's president testified that one employee had refused to submit "any type of form at all," including timesheets. Transcript, Vol. 1 at 310. That employee worked for a total of 12.5 hours, quitting on September 25, 1989, appellant's president testified. Id. at 310-11. No other lapse in compliance with the contract requirements for fingerprint charts and personal history forms occurred. Id. at 312. GSA provided no evidence to counter this assertion. 77. On December 11, the contracting officer wrote to the postmaster that in response to the postmaster's letters sent in November and December, the contracting office was fully aware of the contractor's performance record, and that appropriate action was being taken. Appellant's Exhibit BN. The contracting officer added that he had "some concerns that [the Post Office] is not cooperating fully with the contractor . . . concerning entry into the building by the contractor. If the contractor cannot gain admittance to the building, you cannot expect him to perform the required services." Id. The contracting officer added that he hoped the postmaster's "letters and pictures are being provided out of concern for the deterioration of the building in providing a safe and healthy work environment for your employees and not for the intent of defaulting the contractor." Id. 78. On December 14, the postmaster wrote a memorandum to file regarding his telephone conversation of that date with the contracting officer. The postmaster noted that he had told the contracting officer that the "pictures alone prove the non feasance, mal feasance[sic], misfeasance" of the contractor. Appellant's Exhibit BO. According to the postmaster's memo, the contracting officer responded, to the postmaster's astonishment, that the "pictures were a set up." Id. The postmaster then challenged the contracting officer to "prove it," as he had lots of witnesses. The postmaster's notes indicate that at the end of the conversation, the contracting officer apologized and indicated that the contractor "would lose [the] contract and be replaced." Id. 79. On December 15, the contracting officer informed appellant that the option to extend the contract would not be exercised. Appellant's Exhibit BQ. 80. On December 18, the field office maintenance inspector wrote in a memo that the "Postmaster was under the impression that upon the due date of the last item listed in the cure letter [of December 8], if it is not corrected, we can default the contractor." The field office maintenance inspector noted that "it's not the case however and additional documents will be needed." Appellant's Exhibit BS. 81. On December 18, when appellant's employee came across postal employees taking pictures of the post office, he was told by them that they were going to "entrap" appellant. Transcript, Vol. 1 at 341-45. Appellant's employee testified that the atmosphere in the post office was quite hostile, and that he had seen both graffiti and a letter critical of appellant's vice president on the wall, and was aware of employees intentionally using broken fixtures and wasting paper towels and toilet paper. Id. at 249-51; Transcript, Vol. 2 at 161-63. Appellant's president testified that almost all of its previous employees quit due to comments by the post office. Id. at 561-62. 82. On December 18, the assistant field office manager wrote a memorandum to file regarding a call from appellant's president "complaining about verbal abuse she and her employees were getting from Postal Employees, including [the] Postmaster and his assistant." The assistant field office manager stated that he told appellant's president that he "didn't feel anyone in the post office had the right to be so abusive to anyone in her company, regardless of how inadequate the post office cleaning may be in their opinion." Appellant's Exhibit BZ. 83. On December 18, appellant received a new schedule for the post office floor cleaning, which generally allowed appellant access from 4 p.m. to 7 p.m., but which asked appellant to check with the Superintendent of Postal Operations when actually scheduling. Appellant's Exhibit BW; Transcript, Vol. 1 at 523. However, because appellant needed more time to complete the work, it proposed a different schedule. Appellant's Exhibit BV; Transcript, Vol. 1 at 524. The next day, the field office maintenance inspector delivered a new schedule, which basically consisted of the post office's original cleaning demands. Appellant's Exhibit BU; Transcript, Vol. 1 at 525. 84. When appellant contacted the Superintendent of Postal Operations, he gave appellant three full days to complete the floor work, only two of which fell before the GSA deadline of December 22 for the completion of all floor work. Transcript, Vol. 1 at 526-29. By December 27, appellant had stripped the entire post office floor, but still needed to bring it all to one uniform condition because it had been stripped at so many different times. Id. at 531-32. 85. On December 27, the field office manager sent a letter advising appellant that, following his inspection of the building on that date, he had determined that the high cleaning and floor work to be completed by December 22 had not been satisfactorily accomplished and would be procured elsewhere. Appeal File, Exhibit 8. 86. On January 2, 1990, the field office manager additionally informed appellant that, following his inspection, he had determined that the semi-annual window washing to be accomplished by December 29 had not been performed and that it also would be procured elsewhere. Appellant's Exhibit CB. Although all of the above items had been required by the cure letter of December 8, when the field office manager told appellant to stop work on the above, appellant did so, including cancelling the window washing contractor. Transcript, Vol. 1 at 532-34. 87. GSA was at this point completing its videotape showing the condition of the building. Appeal File, Exhibits 26 (long version) and 26a (short version). However, most of the alleged deficiencies were explained or countered in the notes of appellant's vice president on the video. Appellant's Exhibit EE. GSA put on no evidence at the hearing and made no attempt in its post-hearing brief to contest this exhibit, although it had the opportunity to do so. Appellant's president also rebutted some of the testimony in the video, such as the alleged failure to clean the floor of a postal employee's office. In fact, appellant's president testified, the white spots shown on the floor in the video came from salt which the employee had tracked in on his boots on that particularly snowy day. Transcript, Vol. 1 at 304. Appellant's vice president testified that the reason the GSA video showed so much dust in the post office was that the high cleaning had not been done for six months, since the summer of 1989, when appellant had last succeeded in doing some high cleaning before it was asked to leave by the postal employees choking on the dust from the cleaning. Transcript, Vol. 2 at 253-61. Second Cure Letter 88. On January 5, 1990, the contracting officer issued a cure notice to appellant, advising appellant that "throughout the base period of subject contract, your company has consistently failed to provide timely and quality work. Specifically, your company has failed to provide the following daily and periodic cleaning in a satisfactory manner . . . ." Appeal File, Exhibit 9. The letter then proceeded to quote virtually the entirety of the contract's work requirements in Exhibits 2A, entitled "Cleaning Work and Quality Requirements," and 2F, entitled "Postal Space Cleaning and Quality Requirements," from daily through annual tasks. The SBA liaison testified that he had never seen a cure letter like that before, Transcript, Vol. 1 at 396, and that he did not believe that appellant could accomplish everything in the letter within ten days. Id. at 401. The letter further asserted that appellant had yet to provide uniforms for its employees as required by Part I, Section C, Paragraph 5(B) of the contract, and had yet to provide information concerning individual employees as required by the security clearance requirements in Part I, Section H, Paragraph 2. The letter concluded: In view of the foregoing, and of our letters dated December 8, 1989, and December 27, 1989, and the forthcoming letter for December's deductions, you are hereby directed to take whatever action is necessary to correct all contract deficiencies, including periodic high cleaning, floor maintenance and window cleaning, within ten (10) days after receipt of this letter, or the Government will have no other recourse than to terminate subject contract for "Default", in accordance with the provision entitled "52.249-8, Default (Fixed Price Supply and Service) (APR 1984)" of the Supplemental Contract Clauses for Building Service Contracts. Id. 89. On the same day, the contracting officer wrote to the postmaster to "[p]lease ensure that full cooperation is given to allow the Contractor's personnel entrance into the postal space." Appellant's Exhibit CE. 90. Also on January 5, 1990, the SBA Regional Administrator wrote to the contracting officer that "[t]hroughout the life of this COC certified contract from May 1, 1989 there has been a series of problems, difficulties, discussions, disagreements, allegations and administrative conflicts. Despite numerous meetings involving the GSA, SBA, Contractor, Postal Service, Congressional Offices and others, conditions and relationships seem unimproved. . . ." Appellant's Exhibit CD. The SBA Regional Administrator also noted that "deductions for unsatisfactory performance have averaged only approximately $100 per month for the seven month period [of the contract], which is only approximately 3% of the monthly billings for such period." Id. He advised that the SBA did "not believe that all responsibility rests with the small business firm nor can such firm be found to be in default in light of circumstances which are known to have affected performance efforts" and that, therefore, the SBA recommended "that every possible consideration be given to a termination for convenience." Id. 91. The SBA COC Specialist testified that while it was unusual for the SBA to write such a letter to a contracting officer, the SBA believed that in this case it was appropriate. Transcript, Vol. 1 at 444-45. He stated that while he had been concerned that the complaint letters from the post office appeared to represent a concerted effort to build a case against appellant, he believed that after seeing the contracting officer's letter of December 11, GSA was taking responsibility for dealing with the post office. Id. at 437-40. However, after the contracting officer rescinded the option to extend the contract shortly after issuing it, he believed that GSA's move was based on the actions of the post office, with nothing in the record to justify the change. Id. at 440-43. 92. After sending the letter to the contracting officer, the SBA had only telephone contact with GSA. Transcript, Vol. 1 at 445-46. The SBA COC Specialist believed that the contracting officer became more informed about the contract than he had been a few months earlier, when his involvement was "somewhat detached" and he did not attend any of the on-site meetings. Id. at 446-47. 93. On January 8, 1990, the contracting officer advised appellant to "[d]isregard all correspondence which directs your company to stop all periodic window washing, annual high cleaning and semi-annual Postal Workroom and Swingroom Floor Maintenance." Appeal File, Exhibit 10 at 1. Appellant was ordered to correct "all contract deficiencies . . . as directed by our letter dated January 5, 1990." Id. Appellant was given the same instructions, to ignore the stop work orders of December 27 and January 2, by telephone on the following day. Id. at 2. 94. On January 9, the field office manager wrote a memorandum to file stating that the contracting officer was considering terminating Marty's Maid for the convenience of the Government "based on the fact that no reprocurement costs will be recoverable due to the financial problems experienced by Marty's Maid. Another reason for this is the fact that there is some truth to the allegations of harassment by the post office." The field office manager further stated that the contracting office needed to get a "30 day contract on the market immediately and be ready to go with a new contractor on February 1." Appellant's Exhibit CF. 95. On January 10, the field office manager wrote another memorandum to the file stating that if the contracting officer could "get some agreement that Marty's Maid will not pursue any further legal action, a [termination for convenience] may be decided." Appellant's Exhibit CG. 96. On January 12, GSA issued a solicitation for bids on one month's janitorial services. Appellant's Exhibit CF-1. Unlike the solicitation which appellant had bid, this one notified offerors of the 9,000 square feet of vacant space and of the approximate $725 monthly deduction that would be taken as a result. Id. 97. From January 13 through 15, appellant continued stripping and waxing the post office workroom floor. Appellant's Exhibit CI. Appellant's president testified that the post office employees stated that they were very impressed with the result. Transcript, Vol. 1 at 552-53. While that work was completed satisfactorily, Appellant's Exhibit CM-1; Appeal File, Exhibit 11, other work involving stripping and waxing was judged unsatisfactory. For example, a post office corridor had been stripped but was never rewaxed so that the tiles had become stained over time. Transcript, Vol. 1 at 43. 98. Appellant's president testified that by January 15, all work was completed, except for dusting the carrier cases, which appellant was unable to do because the carrier cases contained mail that appellant was not allowed to touch. Transcript, Vol. 2 at 53, 63. At this point, appellant still believed that if it could satisfy everything in the January 5 cure letter, it would be allowed to complete the contract. Id. at 52. In fact, appellant's president thought that it had cured all alleged defects in performance, including the requirement that the windows be cleaned, because the work had been scheduled, although it was cancelled as a result of the stop work order and could not be rescheduled by the expiration of the deadline established in the cure letter. Id. at 67; Transcript, Vol. 2 at 377. 99. On January 17, the assistant field office manager wrote in a memorandum to the file that appellant had taken down all the blinds in the post office workroom during the weekend of January 13-15. Appellant's Exhibit CH. According to that memo, appellant's vice president had told the assistant field office manager that the blinds were "worn beyond repair." Id. The assistant field office manager wrote that new blinds had been ordered but had not yet arrived. Id. Nevertheless, the fact that new blinds had not been put up to replace the old ones was noted on the inspection report submitted by the field office maintenance inspector two days later. Appeal File, Exhibit 11. 100. On January 19, 1990, the field office maintenance inspector decided that much of the work performed by appellant was unsatisfactory. Appeal File, Exhibit 11. Although he found the stripping and waxing of the post office workroom floor adequate, he noted that the windows of the building had not been cleaned and that the high cleaning was not satisfactory. Id.; Transcript, Vol. 1 at 36, 38. Contract Termination and Appeals 101. The contract incorporated 48 CFR 52.249-4 (1988), "Termination for Convenience of the Government (Services) (Short Form)," which provides as follows: The Contracting Officer, by written notice, may terminate this contract, in whole or in part, when it is in the Government's interest. If this contract is terminated, the Government shall be liable only for payment under the payment provisions of this contract for services rendered before the effective date of termination. Appeal File, Exhibit 2, Supplemental Contract Clauses at 12-13. In addition, the contract incorporated 48 CFR 52.249-8 (1988), "Default (Fixed-Price Supply and Services)," which provides: (a)(2) The Government's right to terminate . . . may be exercised if the Contractor does not cure such failure within 10 days . . . after receipt of the notice from the Contracting Officer specifying the failure. . . . . (g) If, after termination, it is determined that the Contractor was not in default, or that the default was excusable, the rights and obligations of the parties shall be the same as if the termination had been issued for the convenience of the Government. Id. 102. By letter dated January 30, 1990, the contracting officer notified appellant: your right . . . to proceed with performance of subject contract is hereby terminated for default pursuant to paragraph 17 of the Supplemental Contract Clauses for Building Service Contracts, entitled Default (Fixed Price Supply and Service) (APR 1984), the Government hereby furnishes notice of termination immediately upon receipt of this letter. Appeal File, Exhibit 12. 103. On April 25, 1990, appellant timely appealed the contracting officer's decision terminating the contract for default. Appeal File, Exhibit 13. Appellant asserted "that the contract should not have been terminated in the first instance, or, in the alternative, that if the contract were to be terminated, the termination should have been one of convenience." Id. 104. On April 27, 1990, the SBA COC Specialist wrote to the GSA contracting office that he was approving the issuance of a COC for Marty's Maid on the subsequent contract. Appellant's Exhibit CL. The SBA COC specialist stated that "we believe the termination for default . . . was flawed and therefore inappropriate . . . and from all indications [an] appeal can be fully supported and will likely be sustained." Id. The SBA COC Specialist added that appellant had "demonstrated the ability to plan and execute the required work as evidence[d] during the period May 1989 through November 1989 where performance was judged satisfactory by GSA. This assumes that the tenants including the Postal Service will be cooperative in working with the firm." Id. 105. On May 2, 1990, the field office manager wrote to the contracting officer that there may have been some intentional littering at the building cleaned by appellant, resulting from the fact that on several occasions it was noted that trash was not being disposed on a daily basis. Appellant's Exhibit CM. He also stated that the use of broken toilets may have resulted from the fact that a GSA mechanic was not on site at all times during this contract, leading to defective plumbing fixtures not being repaired in a timely manner. Id. 106. On May 9, 1990, the field office manager wrote to the contracting officer that appellant "did not perform during the period from November 1989 through termination for default in January 1990. The contract file reflects this nonperformance." Appellant's Exhibit CM-2. The field office manager admitted that GSA had "numerous contract supervisor problems before November 1989, which resulted in the retirement of the building superintendent . . ., in December 1989" and noted that "GSA had some concern that the post office employees were not cooperating with Marty's Maids, and monitored that situation for the remainder of the contract." Id. However, according to the field office manager, GSA "found no evidence of interference or noncooperation. Contractors had access and adequate chance to perform the cleaning." Id. 107. On May 11, 1989, the contracting officer told the SBA COC Specialist that he did not believe that appellant's president had the qualifications or the experience to supervise the subsequent contract. Appellant's Exhibit CN. After the contracting officer appealed the COC Specialist's decision, that decision was overruled by the SBA Central Office in Washington, D.C., on the grounds that appellant's president, who bid the subsequent contract without appellant's vice president, did not have the requisite years of supervisory experience in the custodial/janitorial field. Transcript, Vol. 1 at 452. 108. On July 6, 1990, the field office manager wrote to GSA Regional Counsel, that he had told appellant that there are "a few troublemakers [in the post office] that seem to enjoy stirring [appellant's vice president] up and they will continue to do so until he ignores them." Appellant's Exhibit CM-1. In the same memo, the field office manager also informed the contracting officer that "[m]uch of the stripping was substandard and shouldn't have been accepted." While he admitted that "[w]hen the [on-site maintenance inspector] retired on December 1, 1989, many inconsistencies came to light in the inspection process and in the quality of the work done," he added that "[t]he poor quality of the work and the unwillingness of the contractor to cooperate with GSA were paramount in [GSA's] decision not to renew the option. Id. 109. On August 3, 1990, appellant submitted a second claim letter to the contracting officer, again requesting conversion of the termination for default to a termination for the convenience of the Government and, additionally, stating a demand of $49,034.95 as its termination costs. Appeal File, Exhibit 15. Although styled as a claim for termination costs, only $300 of the claimed amount (plus the cost of preparing the claim letter) actually related to the termination. The rest of the items were new claims for alleged improper deductions taken by GSA and for the cost of performing additional work beyond that which was required by the contract. Appellant asks the Board to award it $8,654 for preparing the letter as part of its termination costs. 110. In its termination claim letter, appellant noted that the contract required appellant to quote a price for providing additional services, Appeal File, Exhibit 2 at 10-11, which rate was to include direct labor, labor burden, overhead, and profit. Appeal File, Exhibit 15 at 3. Appellant quoted a price of $9.98 per hour for supervisors and $9.15 per hour for employees. Appeal File, Exhibit 2 at 10, Exhibit 15 at 3. 111. On November 26, 1990, appellant filed a notice of appeal from the contracting officer's failure to issue a final decision. The contracting officer issued his decision on December 26, 1990, denying appellant's claim. The contracting office wrote, in part: It is the contracting officer's final decision that the Contractor failed to perform the services required by the contract. Therefore, the Termination for Default should not and will not be changed to one of convenience. . . . . Should the termination be determined to be one of convenience, the Contractor is not entitled to monetary relief pursuant to Federal Acquisition Regulation (FAR) 52.249-4 . . . . FAR 52.249-4 states the Government shall be liable for payment for services rendered before the date of termination. Assuming arguendo that there was an improper default termination, the contractual remedies are limited to those found in a termination for convenience, and does not include those damages alleged. Specifically, no additional work was performed by the Contractor for which they were not paid. Marty's Maid received $36,000 for 9 months of performance less deductions of $9,972.71, payment was withheld in the amount of $1,293.99 for violations of the Service Contract Act of 1965. The Contractor has received all monies due under the contract. Appeal File, Exhibit 18. On February 7, 1991, appellant timely filed its appeal from the contracting officer's final decision. During the hearing in October, 1991, appellant revised its claim to $46,857.92. Appellant's Exhibit DC. Discussion Improper Termination Claim (GSBCA 10614) Marty's Maid claims that its contract was improperly terminated for default. We agree. A default termination is a drastic sanction which should be imposed only for good grounds and on solid evidence. J.D. Hedin Construction Co. v. United States, 408 F.2d 424, 431, 187 Ct. Cl. 45, 57 (1969). This Board has explained that: The default termination of a contractor's right to proceed with contract performance is a species of forfeiture. DeVito v. United States, 188 Ct. Cl. 979, 990, 413 F.2d 1147, 1153 (1969). The default clause must, therefore, be strictly construed, and this Board, as well as other agency boards and the United States Court of Claims which adjudicate the respective rights and obligations of the parties under that clause, hold the Government strictly accountable for its actions in enforcing that sanction. Insul-Glass, Inc., GSBCA 8223, 89-1 BCA 21,361, at 107,673 (quoting Papco Tool Corp., GSBCA 5679, 81-1 BCA 15,077, at 74,586). We agree with GSA that Marty's Maid was in over its head in taking on this contract. Both of the principals had other work during the day and after nine o'clock at night. Finding 22. Although we certainly admire appellant's work ethic, the record makes it clear that the timeframes in which appellant intended to perform the cleaning services called for in the contract were unrealistic. Because of the actions of the Government, however, appellant never had a fair chance to try to perform. We have made extensive findings of fact in this case and do not repeat them here. Suffice it to say that, given the schedule changes, the failure to provide reasonable access to the areas to be cleaned, the harassment by Government employees, and the general uncooperative attitude exhibited by the Government, this contractor could not have succeeded. Termination for default was unfair in the circumstances of this case. Accordingly, we grant GSBCA 10614 and order the Government to convert the termination to one for the convenience of the Government. Termination costs, however, are another matter. Appellant claims as the cost of termination $300 for transporting extra supplies from the jobsite after the termination and $8,654 for preparing its termination claim letter to the contracting officer. The termination claim letter, however, (1) merely repeated appellant's demand to cancel the termination for default, a matter that was already on appeal to this Board, (2) demanded $300 in "[c]osts of terminating the contract," (3) demanded reimbursement for the cost of preparing the claim letter, and (4) raised a series of new claims involving allegedly improper deductions and extra work performed beyond that which was required by the contract. Finding 109. In other words, the only thing accomplished by the claim letter that relates to the termination claim was to ask for $300 plus the cost of the letter. We award appellant $300 for the cost of transporting supplies from the jobsite as a legitimate cost of termination. The cost of preparing a termination settlement claim is also a recoverable expense under a termination for the convenience of the Government. 48 CFR 31.205-42(g) (1991). The problem is, however, that other than repeating at length the allegations that were already before this Board, and making additional claims unrelated to the termination (which are not compensable as termination costs), the "termination claim" letter accomplished nothing other than asking for the $300 in transportation costs. We consider $150 to be a reasonable sum for such an effort. Additional Claims (GSBCA 10996) As discussed above, appellant's termination claim letter to GSA of August 3, 1990, raised additional claims for alleged improper deductions and the cost of additional work performed beyond that which was required by the contract. The contracting officer denied the additional claims. We grant in part appellant's appeal of that denial. Each of these claims is discussed below. Deduction for Vacant Space Appellant makes a claim here that we do not fully understand. Appellant bid this job on the assumption that a certain amount of space would have to be cleaned. As it turned out, there was a fairly large vacant area that did not require appellant's cleaning services. GSA took deductions from the amount it paid to appellant based on a formula in the contract which covered just such a situation, albeit after initially deducting too much from its payments to appellant. Findings 29- 31. Appellant objects on the basis that GSA should have told appellant, prior to bidding, of the vacant space. Apparently, appellant thinks it should be paid for work that it did not perform. Even if appellant is correct that it should have been informed of the vacant space prior to bidding, there is simply no evidence in the record which shows that appellant was damaged by the deductions. Appellant has not shown that the amount eventually deducted was unfair or that it would have bid any differently if it had known about the vacant space. If anything, the record shows that, given its unrealistic schedule, appellant probably could not have cleaned the vacant area in a timely manner anyway. Findings 21, 22. The claim is denied. Deductions for Poor Performance Appellant claims that the deductions for poor performance taken by GSA under the relevant contract clause (see Finding 32) were unjustified. We agree in part. With regard to the relatively small deductions taken during the period from July through November 1989 (an average of about $150 per month), we find no evidence that the deductions were improper. According to appellant's own witness, such amounts were normal for a contract of this size. Finding 35. Appellant argues that it should have received no deductions because the prior contractor was assessed no deductions for poor performance, notwithstanding the fact that inspection reports noted similar types of unsatisfactory cleaning. Finding 4. Appellant, however, has not shown that its own deductions were undeserved. Anyone who has ever been pulled over for speeding knows the futility of arguing that the ticket was unjustified because others were speeding but were not given a ticket. We do agree with appellant, however, that the large deductions taken in December 1989 and January 1990 were improper. These deductions were taken as a result of appellant's failure to perform several of the major cleaning tasks -- failures that we have previously found to have been caused in large part by the Government. In other words, our finding here relates directly to our previous finding that termination for default was unjustified. By December of 1989, the Government's efforts to get rid of appellant had become a crusade. We view the large deductions as a part of the Government's battle plan. Appellant is awarded $4,427.93 for deductions improperly taken during December 1989 and January 1990. The Floors Appellant claims that, because of years of wax build-up due to the previous contractor's failure to strip the floors properly, appellant was required to perform additional work on the floors. GSA argues in response that appellant should have noticed the condition of the floors during its pre-bid inspection, and accounted for this factor in its bid. There is evidence in the record that appellant was told by GSA's on-sight maintenance inspector during appellant's pre-bid inspection that the previous contractor had followed the contract specifications, which required the floor to be stripped every six months. Finding 12. That statement was untrue. The record further shows that it would have been impossible to tell how thick the floor wax was just by looking at it; according to appellant, it would have been necessary to put down chemicals and see how the wax stripped off before the thickness could be known. Finding 13. Finally, the floors looked "nice" during the inspection. Finding 14. This evidence is unrebutted by GSA. We agree with appellant that it had to perform extra work, beyond that which was required by the contract. Based upon the evidence presented, we further find that the condition of the floors could not reasonably have been discovered during appellant's pre-bid inspection. Appellant is therefore entitled to an equitable adjustment to the contract, compensating appellant for this extra work. See Mr. Klean's Janitor & Maintenance Service, Inc., GSBCA 9010, 91-2 BCA 23,683 (a contractor required directly or indirectly to perform additional work at additional cost is entitled to an equitable adjustment under the Changes clause). The problem here is determining how much extra work appellant was required to perform. Appellant performed the extra work by having its two principals put in extra hours and by paying temporary employees to help with the floors. There is little in the record upon which we can rely to tell us how many hours it should have taken to care for the floors and how many hours were actually spent stripping and waxing them. To complicate matters, appellant used its temporary employees to help with non-floor-related cleaning duties. Finally, appellant admits that it had intended to hire additional help for the floors, even before it knew about the additional wax that would have to be removed. See supra at 2 n.2. Based on the record, we determine, as a jury verdict, that appellant was required to spend a total of 250 extra hours to strip the floors.[foot #] 4 This includes time spent ----------- FOOTNOTE BEGINS --------- [foot #] 4 We believe that a jury verdict is appropriate in this situation. In Dawco Construction, Inc. v. United States, _________________________________________ 930 F.2d 872 (Fed. Cir. 1991), the Court required that three factors be present before adopting a jury verdict: (1) that clear proof of injury exists, (2) that there is not a more reliable method for computing damages, and (3) that the evidence is sufficient for a court to make a fair and reasonable approximation of the damages. Here, the three factors are (continued...) ----------- FOOTNOTE ENDS ----------- by appellant's principals as well as the temporary employees. Appellant claims that 63.54 percent of the total excess contract hours were partners' hours. Appellant's Exhibit DD. For lack of any better method, we presume that the same percentage of hours spent on the floor stripping was partners' hours. At $9.98 per supervisor hour, see Finding 110, for 158.85 hours, appellant is entitled to $1,585.32. At $9.15 per employee hour, see Finding 110, for the remaining 91.15 hours spent on the floor stripping, appellant is entitled to $834.02. Thus, appellant is entitled to an extra $2,419.34 in labor costs for the additional floor stripping.[foot #] 5 Extra Cleaning Appellant claims that it was required to perform extra cleaning services due to the poor condition of the building when appellant took over the contract. As has often been the case here, we agree that appellant had to perform some extra work, but find appellant's estimate of the number of hours to be completely overblown. First, we point out that appellant had every opportunity to assess the condition of the building during the pre-bid inspection in which it participated. A contractor is held to the knowledge that it would have obtained had it performed an adequate site inspection. Ambrose-Augusterfer Corp. v. United States, 184 Ct. Cl. 18, 36, 394 F.2d 536, 546 (1968). A contractor, therefore, assumes the risk of its failure to perform a reasonable pre-bid site inspection. Trans-Atlantic Industries, Inc., GSBCA 10803, et. al., 91-3 BCA 24,320, at 121,530-31, (citing Vann v. United States, 190 Ct. Cl. 546, 571-72, 420 F.2d 968, 982 (1970) and Ambrose-Augusterfer Corp., 184 Ct. Cl. at 36, 394 F.2d at 546). ----------- FOOTNOTE BEGINS --------- [foot #] 4 (...continued) present to one degree or another and, as we stated in Tele-Sentry ___________ Security, Inc., GSBCA 10945(7703)-REIN, 91-2 BCA 23,880, aff'd ______________ _____ per curiam, 950 F.2d 730 (Fed. Cir. 1991), "[w]e are reasonably __________ certain that this amount does not overcompensate appellant for its injury." Id. at 119,620. ___ [foot #] 5 Appellant asks the Board to calculate damages based upon a hopelessly complex "total cost" formula, under which appellant calculates how much it expected to make per hour based upon its bid price. Ignoring the fact that the additional hours claimed are wildly overstated, we reject appellant's methodology because it depends upon appellant's unrealistic estimate of the number of hours that it expected to work to perform the contract. In our view, the best way to calculate appellant's hourly rate is to use the price appellant bid in the contract for providing additional services. ----------- FOOTNOTE ENDS ----------- The only condition which required additional cleaning, of which appellant should not have been on notice, occurred because the previous contractor stopped cleaning the building after finding out that its contract would not be renewed, which it could not have known for certain until the contract was awarded on March 7, 1989. Finding 16. This occurred after the pre-bid inspection. Thus, appellant is entitled to a contract adjustment for this additional cleaning. The record shows that, because of the previous contractor's failure, the building had not been cleaned properly in almost two months. Finding 16. As a result of a confusing record (it is unclear how much time was spent on expected cleaning, how much was spent on extra cleaning due to appellant's failure to notice the condition of the building during its pre-bid inspection, or how much was spent making up for two months failure to clean), we again resort to a jury verdict. We find that appellant spent an additional 80 hours cleaning due to the previous contractor's failure to perform during the last part of its contract. Presuming that appellant's principals worked 63.54 percent of the additional 80 hours, at $9.98 per hour, appellant is entitled to $507.28. For the remaining 29 hours spent by appellant's employees on the additional cleaning, at $9.15 per hour, appellant is due $266.90. See Finding 110. In sum, we award appellant $774.18 for the extra cleaning performed by appellant. Additional Supplies In a related claim, appellant maintains that it was required to purchase $2,114.06 worth of extra supplies in order to perform the additional work. We have examined the receipts contained in the record and find the claimed amount to be reasonable. Receptionist In its final claim, appellant asks the Board to order GSA to reimburse it for the cost of hiring someone to answer appellant's telephones during the day. We deny the claim. The Government did not specifically require appellant to hire a receptionist; the contract required that appellant have an individual available during working hours, and the Government determined that having to call an answering machine or call appellant's president while she was at her other job was insufficient to meet the contract requirement. Finding 25. Considering the nature of the contract, i.e., daily maintenance of an office building, we find GSA's interpretation to have been quite reasonable. A shoestring will only stretch so far. __________________________ ANNE M. QUIGLEY Hearing Examiner