_________________________ GRANTED: March 31, 1995 _________________________ GSBCA 12509 ESC POLYTECH CONSULTANTS, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. Danny R. Perkins, Principal of ESC Polytech Consultants, Inc., Houston, TX, appearing for Appellant. Kevin M. Myles, Office of Regional Counsel, General Services Administration, Fort Worth, TX, counsel for Respondent. Before Board Judges BORWICK, VERGILIO, and GOODMAN. VERGILIO, Board Judge. On July 26, 1993, the Board received from ESC Polytech Consultants, Inc. an appeal involving the respondent, the General Services Administration. The contractor appeals the termination for default of its contract to provide miscellaneous energy upgrades. The performance by the contractor during the course of the contract deviated, at times, from contract terms and requirements. However, the performance occurred in the context of active (whether or not intentional) interference by the agency. The termination for default has not been substantiated or justified because of agency improprieties in the administration of the contract. At times, through the contract interpretation proffered and adopted by the contracting officer's representative and contracting officer, the agency impeded the contractor's progress. The actual light fixtures to be retrofitted were not as described in the contract. Not unexpectedly, this led to contractor difficulties in achieving the contract-required levels of performance. Rather than constructively focusing on the true site condition, the agency persisted in assuming that the contractor was at fault. Regarding areas where the contractor failed to follow the contract requirements, the record suggests that sufficient time existed under the contract for the contractor successfully to have accomplished the related tasks. The bases alleged in support of the default termination are not supported by the record. The default determination is not consistent with the default clause of the contract. Therefore, the Board grants the appeal; the termination for default is converted to a termination for the convenience of the Government. Findings of Fact The contract 1. With an award date of February 18, 1993, ESC obtained the underlying contract to do miscellaneous energy upgrades. The contract requires the installation or modification of electronic variable speed drives, motors, an automatic control system, and interior building lighting. Appeal File, Exhibit 1 ( 15120, 15170, 16510), Exhibit 2 at 2. With the exception of specified interior building lighting work (three varieties of light fixtures, PCB ballasts, and exit lights) which was priced on a unit-price basis, the contract was priced on a fixed, lump-sum basis. Id., Exhibit 1 at 120-2 ( 3), Exhibit 2 at 4. The lump sum price is $33,077; the calculated unit price is $64,700; their sum establishes the total base bid of $97,777. Id., Exhibit 2 at 4. 2. By letter dated February 18, 1993, the agency informed the contractor that one responsibility of the contracting officer's representative (COR) would be to "[a]ct as the principal contact and overall coordinator of the project" and another would be to "[a]pprove or reject progress schedules, schedule of estimates, material submittals, shop drawings, operating and maintenance manuals, and other technical submittals." Appeal File, Exhibit 19 ( 6). 3. The contractor received the notice to proceed on April 5, 1993; work was to be completed not later than 120 calendar days thereafter--that is, August 3, 1993. Appeal File, Exhibit 1 at 800-1 ( 2.1.C), Exhibit 2 at 1, 2, 5. 4. The contract contains a termination for default clause from the Federal Acquisition Regulation (FAR), 52.249-10, Default (Fixed-Price Construction) (APR 1984). Appeal File, Exhibit 1, GSA Form 3506 at 42-43 ( 99). The contract also contains clause FAR 52.249-22, Termination for Convenience of the Government (Fixed-Price) (Alternate 1) (APR 1984) and clause FAR 52-236-2, Differing Site Conditions (APR 1984). Id. at 41 ( 98), 8 ( 25). 5. By letter dated June 25, 1993, the contracting officer terminated for default, effective on that date, all work under the contract. The letter identifies the reasons for the termination and responds to matters raised by the contractor in response to an earlier letter from the agency. Appeal File, Exhibit 10. Those bases raised in support of the default termination as well as bases raised during the course of this appeal are discussed below. Schedules and submittals 6. The contract contains a section on "submittals" ( 1300) and one on "schedules and reports" ( 1310). As a general submittal requirement, the contract specifies: "All submittals shall be made to the Contracting Officer or to an individual designated by the Contracting Officer." Further, "Failure on the part of the Contractor to indicate approval on submittals prior to submission to Contracting Officer will result in their being returned to the Contractor without being acted upon." Appeal File, Exhibit 1 at 1300-2 ( 1.3.A). Each submittal is to show the contractor's "executed review and approval marking." Id. ( 1.3.E). During a pre-construction conference held on April 8, the agency instructed the contractor regarding submittals: "All submittals should be sent to the COR with a copy of the Letter of Transmittal to the" contracting officer. Id., Exhibit 14, Pre-construction Conference Minutes at 5. This instruction is consistent with the enumerated duties of the COR. Finding 2. 7. By a letter dated May 4, 1993, the contracting officer informed the contractor: The Notice to Proceed date on this contract was March 26, 1993. At the PreConstruction Meeting held on April 8, 1993, you were informed that the Schedule of Estimates was due within 14 days of the Notice to Proceed (NTP) date, and that the Construction Progress Schedule was due in 15 days from the NTP date, per Sections 01300 and 01310 respectively, of your contract. Appeal File, Exhibit 3.[foot #] 1 In contrast to the assertion in the letter (which relies upon the dated of the notice to proceed), the contract specifies that receipt by the contractor of the notice to proceed is the triggering date for counting time. Id., Exhibit 1 at 1300-4 ( 1.3.B), 1310-2 ( 1.2.A); Finding 3. The letter also advises that the agency deemed the failure to provide the required submittals as endangering performance, and that should the condition not be ----------- FOOTNOTE BEGINS --------- [foot #] 1 No other submittals were mentioned during the pre-construction meeting. Id., Exhibit 14, ___ Pre-construction Conference Minutes at 5-6. However, during the meeting, the agency informed the contractor to the effect that the "Contractor must schedule submittals sufficiently in advance of construction requirements to allow for no less than 10 working days for Government review." Id. ___ ----------- FOOTNOTE ENDS ----------- cured within ten days the agency may terminate for default the contract. Appeal File, Exhibit 3. 8. With a telephone call to the contracting officer on May 7, the contractor responded to the cure letter dated May 4. The contractor stated that it had submitted the schedules to the COR two weeks earlier. In a memorandum to the record, the contracting officer states that she and another individual looked at the COR's desk to find the schedules. Appeal File, Exhibit 4. Although the materials were not found, id., the record does not demonstrate that the COR failed to receive such documents. For example, the affidavits of the COR state that he first received product submittals on May 10, 1993, COR Affidavit (Dec. 9, 1993) ( 3), but are silent as to receipt of schedules. COR Affidavits (Sept. 20 and Dec. 9, 1993). The record suggests no reason to disbelieve the assertion of the contractor on May 7. The Board concludes that the contractor submitted schedules to the COR in April.[foot #] 2 9. With a date of May 13, the COR "approved as noted" a proposed schedule for electrical lighting fixtures. The schedule projects work commencing the final day of May, with two-week periods each devoted to work on each of three floors, with a final week devoted to miscellaneous floors. The final completion date is July 18, 1993. for that portion of work. A COR note specifies that the "schedule is to be resubmitted with more details at a later date." Appeal File, Exhibit 6 at 7. On May 17, the COR rejected a progress schedule for all contract work submitted on the same day by the contractor, noting: "This schedule shows work to be done beyond contract finish time. Please resubmit three copies of corrected schedule." The schedule projects completion during the period August 1 through August 8. An annotation of "7/24/93" (120 calendar days after the date the notice to proceed was issued) appears to reveal the COR'scalculation ofthe contractcompletiondate. Id. at6.[foot #] 3 ----------- FOOTNOTE BEGINS --------- [foot #] 2 The record submitted by the agency and contractor hardly reflects a well-kept, organized set of documents. Accordingly, simply because the documents may not appear in the appeal file submitted by the agency, the Board cannot reasonably conclude that the COR did not possess the materials. Following a letter dated April 21 from the contractor to the COR are proposed schedules. Appeal File, Exhibit 5 at 6- 8. A more troublesome matter exists, which raises questions as to the accuracy of the material in the appeal file: material in the appeal file has been altered without explanation. Deleted from a document is a COR parenthetical "this guy can't even lie intelligently." Compare Appeal File, Exhibit 8, Memorandum from _______ COR to Contracting Officer with Memorandum (submitted by ____ contractor under letter dated Sept. 17, 1993). [foot #] 3 Under cover letter dated September 17, 1993, the contractor supplemented the appeal file (continued...) ----------- FOOTNOTE ENDS ----------- Field superintendent 10. The contract requires a project coordinator: "Provide a full-time Project Coordinator, who is experienced in administration and supervision of building construction including mechanical and electrical work, and who is hereby authorized to act as the general coordinator of interfaces between units of work." Appeal File, Exhibit 1 at 1040-1 ( 1.3.B). The contract also contains clause FAR 52.236-6, Superintendence by the Contractor (APR 1984): At all times during performance of this contract and until the work is completed and accepted, the Contractor shall directly superintend the work or assign and have on the work a competent superintendent who is satisfactory to the Contracting Officer and has authority to act for the Contractor. Id., GSA Form 3506 at 10 ( 33). 11. At a meeting in late May 1993, after being informed that one individual proposed as the project coordinator failed to pass security requirements, the contractor orally proposed another individual to serve in that capacity. By letter dated June 2, to the contracting officer (and COR), the contractor confirmed the name of the individual who would serve as the project coordinator. The individual, Mr. Legg, was an employee of a subcontractor; the agency had already granted him the requisite security clearance. Appeal File, Exhibit 8. 12. By letter dated June 10, 1993, the contracting officer informed the contractor: The Job Superintendent must be a person from your firm, not a subcontractor. Please inform the undersigned Contracting Officer of a designated individual to serve as a Job Superintendent for your firm, by June 15, 1993. This must be an ESC Polytech Consultants, Inc., employee. Appeal File, Exhibit 8. 13. One of the bases identified by the agency in support of the default determination states: ----------- FOOTNOTE BEGINS --------- [foot #] 3 (...continued) with a "progress schedule" which states on the bottom "Printed May/15/93" and which depicts contract completion by July 18, 1993. Given that this document both is inconsistent with the contractor's submittal of May 17 and lacks a foundation in the record, the Board concludes that the document did not exist on May 15. ----------- FOOTNOTE ENDS ----------- A lack of a field superintendent from the General Contractor. In accordance [with] FAR 52.236-6 SUPERINTENDENCE BY THE CONTRACTOR (APR 1984), the Contractor shall directly superintend the work or assign and have on the work a competent superintendent who is satisfactory to the Contracting Officer and has the authority to act for the Contractor. Mr. Legg is a subcontractor. The Government does not have a contract with his company, therefore, he cannot act for your firm. In Section 01040, Page 1, paragraph 1.3.B., the contract states: "Provide a full-time Project Coordinator, who is experienced in administration and supervision of building construction including mechanical and electrical work, and who is hereby authorized to act as the general coordinator of interfaces between units of work." Reasons for Termination for Default (Nov. 29, 1993) at 4 ( 11[A]). Performance of work by contractor 14. The contract contains clause FAR 52.236-1, Performance of Work by the Contractor (APR 1984): The Contractor shall perform on the site, and with its own organization, work equivalent to at least 15 percent of the total amount of work to be performed under the contract. This percentage may be reduced by a supplemental agreement to the contract if, during performance of the work, the Contracting Officer determines that the reduction would be to the advantage of the Government. Appeal File, Exhibit 1 at 800-1 ( 2.2). 15. A schedule of estimates supplied by the contractor indicates that the contractor will perform work relating to bonding and administration; and that the contractor and a subcontractor will jointly perform all other work. The submittal does not indicate the dollar value or percentage of work to be performed by each of the two companies. Appeal File, Exhibit 5 at 8. 16. In the notification of the default, the agency states "There is also a concern as to whether you are meeting the FAR 52.236-1--PERFORMANCE OF WORK BY THE CONTRACTOR (APR 1984), by assigning Mr. Legg the direct supervision/administration duties." Appeal File, Exhibit 10. An explanation in support of the "concern" states: Attached is a schedule of values. [The contractor's principal] intends to perform the administration. According to the security clearance request, [the principal] is the only employee of [the contractor.] The motors were addressed to Legg Industries. Legg Industries contacted Solar Kinetics concerning the lights. It is apparent to the Government that ESC is only overseeing the project and not actually a working contractor. The Government feels that the contractor should perform a portion of the work on the job. The contractor, ESC, is acting as a broker for the work, not as a general contractor. Reasons for Termination for Default (Nov. 29, 1993) at 4 ( 11[B]). The referenced schedule of values (the same identified in Finding 15) does not indicate the specific percentage of work to be performed by the contractor in contrast to that by the subcontractor. The evidentiary record does not support the conclusion that the contractor is "only overseeing the project and not actually a working contractor." Finding 15. Moreover, the record indicates no discussion of the agency concern with the contractor at any time prior to the termination for default. Interior lighting work 17. Regarding interior building lighting work, in describing "[t]he characteristics of each type of the existing fixtures and attendant installation," the contract identifies three fixture types. The identification includes the type and size of, and the number of lamps in, the fixture. There is a 2' x 4', 3-lamp, parabolic louver fixture; a 2' x 4', 4-lamp prismatic lens fixture; and a 1' x 4', 2-lamp, prismatic lens fixture. Appeal File, Exhibit 1 at 16510-1 to -2 ( 1.1.A). 18. The contract provides for "quantity surveys": A. Quantity Surveys shall be conducted, and the data derived from these surveys shall be used in computing the quantities of work performed and the actual construction completed and in place. B. The Government shall conduct the original and final surveys and make the computations based on them. Appeal File, Exhibit 1, Solicitation Amendment One at 2 ( 800, 5.4). This contract language differs from that in the solicitation as initially issued, which required the contractor to conduct the original and final surveys. Id., Exhibit 1 at 800-6 ( 5.4). The changed solicitation is consistent with other terms of the contract: "A set of drawings showing the reference locations of the lighting fixtures will be furnished to the contractor after the contract is awarded." Id. at 16510-1 ( 1.1.A). However, not altered or mentioned by the amendment is the solicitation/contract provision stating that prior to starting construction, the contractor shall perform a field audit to determine the exact number of fixtures to be retrofitted. Id. at 16510-9 ( 3.1.A). 19. Although the contract itself does not identify a particular retrofit kit to be utilized, it states: The proposed reflector system has been designed to replicate the photometrics of the existing fixture. The design prototype fixture is installed, and is available for the contractor to view if questions about the design arise. The new system will be installed into the existing fixture shell with all electrical components to be replaced. All existing fixtures (types A, B, C) shall be converted. The contractor is to bid the design included in the specification package. Appeal File, Exhibit 1 at 16510-2 ( 1.1.B). A single manufacturer designed the reflector system used for the prototypes in this project. Agency Admission at 4 ( 13, 14) (Feb. 23, 1994). 20. For each of the three types of lighting fixtures, the contract requires a "submittal" of mock-ups: 1. Before fabrication of all kits required for this project, the contractor must provide all necessary materials and retrofit two fixtures of each type as designated by the COR, for field-performance verification. The contractor is required to obtain written approval from the COR before producing/purchasing remaining materials for this project. The Government will neither financially compensate nor be responsible for any materials produced/ purchased for this project by the contractor prior to approval of the mock-up by the COR. Once approved, these shall remain in place unaltered. These shall serve as a representative sample to measure other workmanship and materials against. The contractor shall also take "before" and "after" footcandle readings at the mock-up location, using a light meter having a digital readout. The retrofitted mock-up shall supply at least 95% for Type A fixture, 94% for Type B fixture, and 97% for Type C fixture of the overall average of the existing "before" footcandle readings, or it shall be rejected by the COR. The results of the footcandle tests shall be submitted to the COR in tabular written form. . . . If any of the "after" footcandle readings are less that 95% for Type A fixture, 94% for Type B fixture, and 97% for Type C fixture of the overall average of the "before" readings, the installation may be rejected at the COR's discretion, and shall be corrected by the contractor, to the COR's satisfaction. 2. Footcandle readings shall be taken in a manner that either eliminates, or otherwise accounts for contribution from daylight and other sources. This may be accomplished by taking readings at night, covering windows, subtracting out contributions from sources other than the retrofitted fixture in order to arrive at a net reading for the retrofitted [fixture], or any other method acceptable to the COR. The contractor shall submit in writing, for the COR's approval, a proposed step-by-step procedure, including the proposed location, for conducting the "before" and "after" footcandle readings. Appeal File, Exhibit 1 at 16510-4 to -5 ( 1.3.A). 21. On May 13, a mock-up or field-performance verification occurred during which the contractor used the retrofit kits as designed and as manufactured by the company which prepared the prototypes, Finding 19. Appeal File, Exhibit 8, Submittal Package (May 10, 1993) 2. The COR attended the mock- up.[foot #] 4 For what the COR had designated to be fixture A (in accordance with the contract; Finding 20, first- quoted sentence), the test produced before and after average footcandle readings of 67.46 and 61.49, respectively. Id., Exhibit 9 at 4 and Attachment 2-A. The after reading is 91.15% of the before reading (61.49/67.46). This is outside the level specified in the contract (95%). For what the COR had designated to be fixture B, the contractor was unable to install the retrofit kit; accordingly, a set of readings was not taken. Id., Exhibit 9 at 5. For what the COR designated to be fixture C, the test produced before and after average footcandle readings of 39.30 and 29.87, respectively. Id. at 9 and Attachment 2-B. The after reading is 76% of the before reading (29.87/39.30). This is outside the level specified in the contract (97%). Far from demonstrating, the record does not suggest (apart from unsubstantiated conjectures by the agency) that the readings are inaccurate or were not taken in accordance with the terms of the solicitation.[foot #] 5 Despite the COR's presence ----------- FOOTNOTE BEGINS --------- [foot #] 4 The agency and COR make much of the fact that the light meter of the COR was utilized during the mock-up. The record does not indicate that either the COR, the agency, or the contractor objected to the use of the light meter at the time. The record contains no basis to challenge the accuracy of the light meter. This is no more than an after-the- fact basis used by the agency to snipe about the contractor's actions and inactions. [foot #] 5 In the course of the appeal, the agency attempted to demonstrate that the contractor incorrectly took readings, as it attempted to redo mock-ups with the reflector kits designated by the agency and used by the contractor. The testing produced no conclusive light reading results; rather, those present (including the COR, the contractor's president, and an employee of the manufacturer of the reflector kits) seem to have concluded that multiple (continued...) ----------- FOOTNOTE ENDS ----------- during the verification testing, the agency has not detailed for the record the procedures used in the testing or suggested how the manner of testing is inconsistent with any contract requirement. 22. By letter dated May 24, the contractor informed the agency of two anticipated causes of delay: "Note that delays are anticipated as a result of inaccurate plan drawings provided giving locations for installation of the new retrofit light kits, and due to the design errors in [the] retrofit kits to be installed." Appeal File, Exhibit 8. 23. The contracting officer and COR recognize that the agency provided the contractor with a floor plan which did not accurately describe the fixtures at various locations. "The contractor indicates in his cover letter [dated May 24] that delays are anticipated due to inaccurate drawings showing location of existing light fixtures. These drawings which were provided to the contractor during the pre-construction meeting were confirmed during the mock-up meeting walk-through to be 84% accurate." Appeal File, Exhibit 8, Internal Memorandum of COR (May 28, 1993). "Please keep in mind that the floor plans, which were given to the contractor during the pre-construction meeting, were verified to be 84% accurate during the mock-up meeting walk- thru with the contractor." Id., Memorandum from COR to CO (June 7, 1993). However, in a letter dated May 26 to the contractor the contracting officer recognizes that the contractor claims that it was delayed by the revised floor plan, but states, "The locations were verified during the mock-up meeting last week." Id., Exhibit 7. The record does not demonstrate that the locations of the actual fixtures were accurately verified during the mock-up meeting or thereafter. 24. The fixtures identified by the COR for the mock-up as A, B, and C were other than those for which the reflector kits were designed. Appeal File, Exhibit 11; McCrea Affidavit (Nov. 29, 1993); Videotape of Subsequent Testing (Oct. 19, 1993). The record does not conclusively establish whether there exist different fixtures of each type or additional fixtures distinct from those described in the contract (e.g., types D, E, F), or both. However, the actual fixtures used during the mock-up (and existing on site) are not of types A, B, and C as specified in the solicitation, and/or are unanticipated variants of types A, B, and C. A letter dated April 22, 1993, from the retrofit kit manufacturer to the contractor, written in the course of preparing the retrofit kits for the mock-ups, indicates that two different 1' x 4' fixtures exist, although the contract reveals ----------- FOOTNOTE BEGINS --------- [foot #] 5 (...continued) varieties of light fixtures exist, with those tested unable to accommodate properly the reflector kits. Videotape of Subsequent Testing (Oct. 19, 1993). The Board finds insubstantial support for the contractor's contentions that this videotape has been doctored and misrepresents what occurred during the testing. ----------- FOOTNOTE ENDS ----------- but one type of such a fixture. Agency Supplement to Record (Nov. 29, 1993). An annotation on the document reveals that the COR received a copy of the letter through the subcontractor on May 15. Id. 25. In a letter dated June 2, 1993, to the contracting officer, the contractor explains: ESC cannot, nor will not proceed with the installation of the light fixtures knowing that they do not meet specification and that the drawings provided by GSA- Fort Worth are incorrect without an express written waiver. The defective plan drawings provided by GSA were verified by representatives GSA-Fort Worth, GSA- Beaumont, and ESC. Appeal File, Exhibit 8, Letter of June 2, 1993 at 2. 26. In a letter dated June 10 to the contractor, the agency specified: "It is our view that this is not necessarily a design error at this point. Since the tabulated results for the mock-up did not indicate the percentage, in accordance with Section 16510 of the contract and type C fixture calculations were not provided in the package, you are required to redo the light meter readings, tabulate the results and provide type C fixture calculations in accordance with the contract." Appeal File, Exhibit 8 at 2. Exit sign retrofit kits 27. Exit sign retrofit kits are mentioned in only one paragraph in the contract's section on interior building lighting: 2.2 EXIT SIGN RETROFIT KIT: A. General: Provide and install 2-lamp fluorescent "EXIT" sign retrofit kits for approximately 10 existing incandescent "EXIT" signs in the building. Any quantities greater or less than 10 will be treated as adds or credits based on the unit cost to be calculated as follow: Unit cost per fixture = (Total cost for 10 fixtures)/10. B. Retrofit kit: The kit shall be pre-fabricated with 2 fluorescent lamps, 9 watts each. The contractor shall verify the existing size for adaptor screws. C. Manufacturers: Available manufacturers included but not limited to 1. Duro-Test Lighting 2. VL Service Lighting Corporation Appeal File, Exhibit 1 at 16510-9 ( 2.2). In the section, other references to retrofit kits address lighting fixtures of types A, B, and C--fixtures "used for the task lighting functions for general office space." Id. at 16510-1 ( 1.1.A). 28. The agency asserts that the contractor failed to submit shop drawings for exit sign retrofit kits, and that such drawings were required under the contract, Section 16510, paragraph 2.2. Reasons for Termination for Default (Nov. 29, 1993) at 2 ( 3[B]). Section 16510, interior building lighting, contains no reference to shop drawings for exit sign reflector kits, interior lighting fixture retrofit kits, or PCB ballasts. Appeal File, Exhibit 1 at 16510-1 to -25. This contrasts with other sections which under "submittals" expressly reference "shop drawings" as a requisite submittal. E.g., id. at 15120-2 ( 1.5.A), 15950-3 ( 1.3.C). Motors--efficiency 29. The contract requires the replacement of twenty specified motors. Appeal File, Exhibit 1, Amendment 1 at 15170-1 ( 1.1.A). One requirement states: "The efficiencies of the motors shall be no less than the following for specified motor size." There follows a chart associating with each of seven different motor sizes a "high efficiency percentage." Id., Exhibit 1 at 15170-3 ( 2.1.A.7). The contract notes that "product data" submittals are required: "Submit manufacturer's standard technical product data indicating conformance to the stipulated reference specifications, construction material, construction details, and test procedures." Id. at 15170-2 ( 1.3). 30. During the meeting on May 13, the contractor provided to the COR a "motor upgrade" submittal on the letterhead of its subcontractor, which, for each of the motors identified in the contract, identifies the horsepower of the motor, provides two unspecified columns of numbers, and names a manufacturer. Appeal File, Exhibit 6 at 9. Under a transmittal letter dated May 17, the COR rejected the submittal; an annotation states that the contractor had not indicated on the submission that it had reviewed and approved the submittal prior to forwarding it. Id. 31. A submission of May 19 on the letterhead of a motor supplier identifies for various motors the manufacturer (Marathon, Electric), quantity, horsepower, revolutions per minute, frame, and manufacturer pin number. The submittal (including a one page cut sheet from the manufacturer) does not identify the efficiency of any motors. Appeal File, Exhibit 6 at 2-4. The COR rejected the submittal on May 19; his annotation states that the cut sheet does not show high efficiency motors and requests the contractor to "please submit pre-approved copies." Id. at 1-2. 32. On May 24, the contractor made another submittal to the COR under a cover letter which states: "Note that a copy of this submittal was provided on 05/19/93 for approval by GSA, along with the Efficiency Ratings" and "ESC will continue [its] commitment to GSA in completing this important project on time, and is aware of the importance of maintaining the contract schedule." Appeal File, Exhibit 8. The apparent submittal, id., Exhibit 9 at 3, and Attachment 1-A, is of unidentified source and indicates the motors (but not by make or model number) to be supplied and provides numbers under columns (not explained in the record) captioned "NON F.L. EFF" (presumably, non-full load efficiency), "GTD F.L. EFF" (presumably, guaranteed full load efficiency), "3/4 EFF" and "1/2 EFF." All of the efficiency numbers are insufficient to satisfy the contract-dictated efficiencies. Id., Exhibit 1 at 15170-3 ( 2.1.A.7), Exhibit 9, Attachment 1-A at 5-6. 33. In a letter dated May 26, the contracting officer informs the contractor: "Your submittals have been rejected. In accordance with [specified contract clauses] you are to resubmit your submittals for approval. Any work performed with a nonapproved submittal is at your own risk. Any replacement will be at your expense, if the efficiency percentage for the motors are unacceptable." Appeal File, Exhibit 7 at 1. 34. By letter dated June 10, the contracting officer informed the contractor of its position and concerns relating to the motors and other items, stating in part: The [COR] informed you that you could begin the mechanical work since you were concerned about the time frames waiting on the lighting mock-up. This authorization was given with the understanding that you would submit shop drawings and/or product data as required by the contract. . . . Once the COR received the product information, he reviewed it and rejected it for the reasons stated below. If you can not show that these motors are in compliance with the specifications, you will be required to remove the motors and replace them with acceptable motors. The product efficiency data received by the COR did not show evidence that the sheets were for the same motors or model of motors as being Marathon, the installed motors. The product data should indicate the manufacturer. The motor's efficiency as indicated on the efficiency data sheets do not comply with the motor efficiency specified in Section 15170 of your contract. The submittal is not in compliance with Section 01300 of your contract in that only one copy of the submittal was received and you did not review and approve the submittal prior to sending it to GSA. In accordance with the contract, the Government does not have to review the submittal if it has not been approved by the General Contractor. . . . . This is to advise you that if your failure to comply with the above contract requirements is not cured to the satisfaction of the undersigned Contracting Officer within ten calendar days after receipt of this letter, I will have no alternative but to consider termination of the subject contract for default . . . . Appeal File, Exhibit 8. 35. Under a cover letter dated June 17, to the contracting officer, ESC provided a "submittal package" with the annotation "ESC APPROVED" with the same information which had been supplied on May 24 and rejected. Appeal File, Exhibit 9 at 3. Indeed, in accordance with the agency directive of May 26, Finding 33, the contractor "resubmitted" its earlier submittal. 36. In a letter to the contractor dated June 25, terminating for default all work under the contract, the contracting officer specifies the motors as a basis supporting the default: "The product efficiency data sheet which you have provided does not indicate the name, make or model of the equipment installed as being Marathon. There are no model numbers on this page or any other indication that they are the same motors as have been provided to the Government." Appeal File, Exhibit 10 at 2 ( 5). 37. The contractor has entered into the record a letter dated September 27, 1993, to it from a vice president of the motor manufacturer. The letter responds to concerns of the contractor relating to this appeal. The vice president states in the letter: An on-site evaluation of the premises where a motor is to be installed is not necessary to determine the specific efficiency level of a motor. There are published efficiency levels for motors. These efficiency levels are determined by testing the motors using well-defined test methods established by IEEE and NEMA. However, the efficiency of the system in which a motor is installed is a function of the voltage balance and magnitude (i.e. - higher or lower than nameplate voltage). . . . . As mentioned [above], it is not necessary to perform an on-site evaluation to determine motor efficiency levels. However, the efficiency of the system is a function of the voltage and must be measured at the site. Contractor Supplement (Sept. 28, 1993) ( 2, 5). The vice president further specifies the efficiency ratings of two of the company's motors proffered by the contractor; each rating is insufficient to satisfy the contract requirement. Id. ( 3); Appeal File, Exhibit 1 at 15170-3. Motors--installation 38. Subsequent to the pre-construction meeting on April 8 and prior to the mock-up testing on May 13, the contractor installed some motors after the COR had suggested that the contractor begin the mechanical work. Finding 39. In a letter dated June 2, 1993, to the contracting officer, the contractor specifies: ESC received verbal notification by [the COR] to proceed initially with the installation of the mechanical motors and to forward the motor submittals at the Pre-Construction Conference held on April 8, 1993. The verbal notification was witnessed by several members of GSA Fort Worth and Beaumont Offices, along with several members of ESC's team participating on this project. ESC provided GSA-Fort Worth and GSA- Beaumont with copies of the motor submittals around April 18th. The submittal was received by GSA-Beaumont and several meetings took place to coordinate the times for which to begin installation of the motors, as per the instruction from [the] COR. Appeal File, Exhibit 8, Letter of June 2, 1993 at 2. 39. In a memorandum dated June 7, to the contracting officer, the COR explains his position: The contractor claims in his letter that a verbal notification to proceed with the installation of the motors was given to him by myself, during the pre- construction meeting. Even if this was true the contractor is not to be directed by anybody, but the contracting officer as indicated in the contract and re-stated in the pre-construction meeting by [the contract administrator]. During the pre-construction meeting the contractor raised concern about the project completion may be delayed due to not having the light fixture mock-up approved at that time. I told the contractor that this project has more than the electrical work, it also has mechanical work. I suggested to him to start the mechanical work while he is waiting on receiving the mock-up from the manufacturer. I assumed that he was going to provide us with the submittals prior to replacing any motors, as stated in his contract. I did not direct him to replace the motors without submittals approval. Nor did I direct him to deviate from any contract requirements. . . . . . . . The contractor stated in his letter that I gave him a verbal notification to stop work after several motors have been replaced. This is not true. As a matter of fact, during the mock-up meeting, when I learned that the contractor had replaced several motors without any submittal approval[,] I told the contractor at that time that submittals must be approved by GSA prior to motors being installed. I also told him if motors do not meet specification requirements, he will be liable to take them out and install the originals in place at no cost to the Government. Appeal File, Exhibit 8, Memorandum of June 7, 1993. 40. By letter dated June 10, the contracting officer informed the contractor that if it could not show that the already-installed motors are in compliance with the specifications, "you will be required to remove the motors and replace them with acceptable motors." Appeal File, Exhibit 8 at 1-2. 41. At the time of motor installation, the agency had not formally approved any submittal for the motors. The record does not demonstrate which motors were removed, or the size, efficiency, or place of manufacture of any of the motors installed. Given the contractor-proposed schedule for motor installation, Appeal File, Exhibit 6 at 6, sufficient time appears to have existed for the contractor to have replaced the recently installed motors with contract-compliant motors, should such action have been necessary. The record does not suggest that, before terminating the contract, the agency informed the contractor that the installed motors were not contract compliant. Accordingly, despite the agency assurances in the letter of June 10, Finding 34, the contractor lacked a specific opportunity to remove and replace motors. Motors-Buy American Act 42. With references to the Buy American Act, 41 U.S.C. 10, the contract specifies that the "Contractor agrees that only domestic construction material will be used by the Contractor, subcontractors, materialmen, and suppliers in the performance of this contract." Appeal File, Exhibit 1, GSA Form 3506 at 16 ( 53(b), FAR 52.225-5--Buy American Act--Construction Materials (APR 1984)); Supp. to GSA Form 3506 at 26 ( 27). 43. In responding to some of the contractor's concerns regarding this appeal, a vice president of the motor manufacturer states that one of its motors proposed by the contractor in this project "is produced outside the United States." Contractor Supplement (Sept. 28, 1993) ( 3). 44. One reason raised by the agency in support of the default determination states that the contractor has provided foreign made materials for the three largest-sized motors. "This was confirmed in a letter from [the motor manufacturer] that the larger horse power motors are foreign made materials." Reasons for Termination for Default (Nov. 29, 1993) at 1-2 ( 3). Submitted with the reasons for default is a letter from the motor manufacturer stating that the largest-sized motor "was manufactured in the Peoples Republic of China"; the letter is silent as to the place of manufacture of any other motor. Electronic variable speed drive and automatic control system 45. The contract requires work concerning electronic variable speed drives and automatic control systems. Appeal File, Exhibit 1 ( 15950, 15120). Shop drawing submittals are required for the electronic drives. Id. at 15120-2 and -3 ( 1.5.A). For the control system, pre-qualification data is to be submitted within fourteen days after the notice to proceed; shop drawings and manufacturer's data are also to be submitted. Id. at 15950-3 ( 1.3). 46. Although the record does not indicate that the contractor provided the required submittals, the cure notices did not inform the contractor that such information had yet to be provided and that the lack of such information could result in a default termination of some or all of the contract. Appeal File, Exhibits 3, 8. Only after terminating for default the contract has the agency raised as a basis in support of the default the contractor's lack of compliance with the related submittal requirements. Discussion In this appeal, the contractor challenges the validity of the termination for default. The appellate authority of this Board has set forth the analysis to be applied in a case such as this: "This court sustains a default termination if justified by circumstances at the time of termination, regardless of whether the Government originally removed the contractor for another reason. Joseph Morton Co. v. United States, 757 F.2d 1273, 1277 (Fed. Cir. 1985)." Kelso v. Kirk Brothers Mechanical Contractors, Inc., 16 F.3d 1173, 1175 (Fed. Cir. 1994). The Board reviews each basis in support of the default termination which the agency alleges. The termination for default clause of the contract, Finding 4, provides: (a) If the Contractor refuses or fails to prosecute the work or any separable part, with the diligence that will insure its completion within the time specified in this contract including any extension, or fails to complete the work within this time, the Government may, by written notice to the Contractor, terminate the right to proceed with the work (or the separable part of the work) that has been delayed. . . . (b) The Contractor's right to proceed shall not be terminated nor the Contractor charged with damages under this clause, if-- (1) The delay in completing the work arises from unforeseeable causes beyond the control and without the fault or negligence of the Contractor. . . . ; (2) The Contractor, within 10 days from the beginning of any delay (unless extended by the Contracting Officer), notifies the Contracting Officer in writing of the causes of delay. The Contracting Officer shall ascertain the facts and the extent of delay. If, in the judgment of the Contracting Officer, the findings of fact warrant such action, the time for completing the work shall be extended. The findings of the Contracting Officer shall be final and conclusive on the parties, but subject to appeal under the Disputes clause. (c) If, after termination of the Contractor's right to proceed, it is determined that the Contractor was not in default, or that the delay was excusable, the rights and obligation of the parties will be the same as if the termination had been issued for the convenience of the Government. Field superintendent The contracting officer specifies as one basis in support of the default termination the contractor's failure to directly superintend the work. Finding 13. The agency misreads the contract and imposes on the contractor a requirement not found therein. The contract expressly permits the contractor to "assign and have on the work a competent superintendent." Finding 10. Rather than serve as a valid basis in support of the default termination, the agency's interpretation interfered with the contractor and reflects an unwarranted agency position regarding this contract and contractor. Performance of work by the contractor One basis alleged in support of the default specifies an agency "concern" that the contractor will fail to comply with the contract requirement to perform on the site at least 15% of the total amount of work to be performed under the contract. Findings 14, 16. The agency assumptions underlying its concerns are inconsistent with the information then before the agency. The record does not demonstrate that the contractor was likely to perform less than 15% of the work on site. Accordingly, this basis raised in support of the default determination is not justified. Security In support of the default, the agency contends: "The contractor brought a person . . . into the building who had been previously disapproved for security reasons to our site visit of October 19, 1993." Reasons for Termination for Default (Nov. 29, 1993) at 3 ( 10). This alleged basis does not support the default. The incident post-dated the termination by four months. The record does not demonstrate the reasonableness of equating a lack of security clearance with a prohibition from visiting a site for specific testing under controlled conditions with the presence of agency personnel. The agency has not demonstrated that the contractor knew that it was prohibited from bringing the individual onto the site under such circumstances. Exit sign retrofit kits In support of the default termination, the agency contends that the contractor failed to submit shop drawings for exit sign retrofit kits. Finding 28. The contract does not require shop drawings for exit sign retrofit kits. Findings 28, 29. Accordingly, this does not serve as a valid basis in support of the default determination. Interior lighting Prototype In support of the default, the agency maintains: "The contractor failed to review the prototype fixture to compare with existing fixture per Paragraph 1.1.B," Finding 19. Reasons for Termination for Default (Nov. 29, 1993) at 5 ( 13). The contract does not require the contractor to review the prototype fixture. In any event, the contractor utilized the retrofit kits of the design and as manufactured by the company designated by the agency. Finding 21. The asserted inaction does not justify a default termination. Designation of fixtures The contract specifies that the agency is to provide to the contractor a "quantity survey" and a set of drawings showing the reference locations of the lighting fixtures. Finding 18. The agency attempts to place the burden on the contractor for providing this information. Reasons for Termination for Default (Nov. 29, 1993) at 2 ( 5). As initially issued, as expressed in each of two separate provisions, the solicitation required the contractor to conduct the initial "quantity survey." By amendment, one provision dealing with the "quantity survey" was expressly emended to require the agency to provide to the contractor the initial survey results. The alteration was consistent with another solicitation provision which required the agency to provide a set of drawings depicting the locations of the various types of light fixtures. Finding 18. In light of the express alteration of the one "quantity survey" provision and the resulting consistency with the drawing provision, it was reasonable for the contractor to assume that the agency was responsible for providing the initial quantity survey. Accordingly, the failure of the contractor to conduct such a survey does not justify a termination for default. Installation during mock-up In support of the default determination, the agency insists "that the contractor installed the wrong retrofit kit in the wrong light fixture." Reasons for Termination for Default (Nov. 29, 1993) at 2 ( 5). In making this assertion, the agency opines: "There are merely additional types of lights than first anticipated." Id. The contract requires that the mock-ups be done in fixtures "as designated by the COR." Finding 20. The record reveals no error attributable to the contractor. Rather, the contractor installed in each fixture designated by the COR as either A, B, or C, the respective retrofit kit. Each fixture proved to be either a variant of the designated fixture type or a different fixture. Finding 24. The record does not suggest, and it is not reasonable to assume (given the distinguishing characteristics-- size and number of lamps--between the A, B, and C type fixtures), that the contractor installed, for example, an A retrofit kit into a B or C type fixture. Although the contractor may not have installed a particular retrofit kit into the variety of a given type fixture for which the kit was designed, the COR designated the fixtures to be used during the mock-up. The agency has failed to demonstrate a failure by the contractor to comply with the mock-up requirements. Rather, the failure of the kits to achieve sufficient results during the mock-up is attributable to the designation of the fixtures. Accordingly, this basis does not validly support the default determination. Light meter readings In support of its default determination, the agency maintains that the contractor did not perform any light meter readings. Reasons for Termination for Default (Nov. 29, 1993) at 2 ( 5), 3 ( 9). Regardless of the individual who actual held the light meter, light meter readings were taken during the mock- up tests without any objection by the agency. Finding 21. The contractor produced numerical, footcandle results for fixtures A and C, and stated for fixture B that the fixture would not accommodate the kit. The contractor complied with the provisions of the contract; the agency does not raise a basis validly supporting the default determination. Also in support of its default determination, the agency notes that the contractor has indicated that the mock-up readings were taken in accordance with industry standards. The agency maintains that the "footcandle reading calculations should be in accordance with the specification Section 16510-4 Paragraph 1.3.a. Industry standard is not acceptable if it does not comply with or meet the requirement of specifications." Reasons for Termination for Default (Nov. 29, 1993) at 3 ( 7). The record lends no support for the proposition, and therefore falls far short of demonstrating, that the readings were not taken in accordance with the terms of the solicitation. Differing site condition In support of the default determination, the agency maintains: The contractor did not notify the Contracting Officer of any differing site conditions in accordance with FAR 52.236-2 DIFFERING SITE CONDITIONS (APR 1984) until he had been given a cure notice. The differing site condition was investigated by the Contracting Officer at that time and found to be not critical to the remainder of the light kits and the work in the contract documents. The contractor was notified in April 1993, by Solar Kinetics, . . . that there could be additional types of lights in the building. The contractor did not act on this letter, but instead claimed a design deficiency. The additional types of light kits will be accomplished as a separate project. The Government does not believe that the additional types of lights kept the contractor from performing the work on the job. The only impact would be to exclude any existing additional lights identified by the contractor from the contract and change them out on another project or process a change order to include the lights on this project. Reasons for Termination for Default (Nov. 29, 1993) at 2-3 ( 6). The contract specifies that the contractor is to retrofit three readily distinguishable types of lighting fixtures. The contract specifies that the agency is to provide a set of drawings indicating the location of the various fixtures. The contract makes no mention of the existence of other types or styles of fixtures. The contract does not suggest that the contractor may need to spend time distinguishing whether a given fixture is a variant of type A, B, or C, or is a distinct type of fixture. No later than May 15, two days after the mock-up test, the COR received a copy of the letter from the retrofit kit manufacturer. which states that types of fixtures exist which are not revealed in the contract. Finding 24. The agency made no attempt apparent in the record to pursue this information. As of May 15, the agency was as aware as the contractor of the existence of problems and the potential cause. The letter of June 10 side-steps the true issues, and reflects an agency view which did not consider the information before it. Finding 26. Given the results of the mock-up test, the contractor reasonably did not provide retrofit kits with the requisite "contractor approval." The agency improperly seeks to expand the contractor's responsibilities and scope of work under the existing contract. Proposed motors Efficiency In support of its default determination, the agency maintains that the contractor-proposed motors fail to satisfy the efficiency standards of the contract. Reasons for Termination for Default (Nov. 29, 1993) at 1 ( 1). The contractor maintains that the motors are contract compliant. The contract requires motors to have a minimum efficiency level. The efficiency is to be demonstrated by literature from the motor manufacturer. Finding 29. The contractor's assertion that motor efficiency is determined by looking at the motor in the system is belied by the contract requirement for motor literature and the contractor-supplied letter from the vice- president of the motor manufacturer, who distinguishes between motor efficiency and system efficiency. Finding 37. This information, submitted by the contractor, is not convincingly rebutted. The record demonstrates that the proposed motors lack the efficiencies required by the contract. Finding 32. The agency properly rejected the contractor's submittals relating to, and its proposed use of, the motors. At the time of termination, June 25, there existed over one month for the contractor to complete performance. One month earlier, in the midst of motor-efficiency disagreements, the contractor had expressed its continued commitment to complete the project on time. Finding 32. The record does not reasonably support the agency assertion that the contractor would be unable to complete motor installation within the remaining contract time. Place of manufacture The contract requires compliance with the Buy American Act. Finding 42. The agency raises as a basis in support of the default determination that the contractor has provided foreign made materials for the three largest-sized motors. Finding 44. The record demonstrates that only one size motor is manufactured outside of the United States and non-compliant with the Buy American Act provisions. Findings 43, 44. The failure to comply with the Buy American Act provisions justifies the agency's rejection of the motor submittals for only the one motor. However, the record does not demonstrate that insufficient time existed to install contract-compliant motors within the term of the contract. Installed motors In support of its default determination, the agency asserts that the motors provided were not in accordance with the contract and that the contractor installed the motors without having obtained prior approval from the COR. Reasons for Termination for Default (Nov. 29, 1993) at 1 ( 1). During the pre-construction meeting on April 8, the COR informed the contractor that it could proceed with mechanical work (i.e., motor installations). Findings 38, 39. The COR's assumption that the contractor would await specific agency approval of the proposed motors before beginning installation and belief that the contractor can only be directed by the contracting officer, Finding 39, do not make any less reasonable the contractor's understanding that approval to proceed had been granted. Finding 2. The approval to proceed with installation, however, does not lessen or alter the contractor's obligation to install contract- compliant motors. Any motors installed must comply with efficiency requirements and the applicable provisions of the Buy American Act. The record does not establish which size(s) and how many motors the contractor already has installed. Although the record demonstrates that all contractor-proposed motors fail to satisfy efficiency requirements, Finding 32, the Board does not know the extent of the deviation relating to the installed motors. In its cure notice letter, the agency specifically notified the contractor that if the already installed motors do not satisfy the contract requirements, the contractor will be required to remove and replace the motors. Finding 40. The agency has not provided the contractor with an opportunity to replace the motors. The record does not demonstrate that insufficient time existed under the term of the contract for the contractor to install contract-compliant motor(s). Finding 41. Hence, the post-termination basis for default fails. Electronic variable speed drive and automatic control system submittals In support of its default determination, the agency maintains that, in contravention of section 15120, the contractor never provided submittals for the electronic variable speed drive and that, in contravention of section 15950, paragraph 1.3, the contractor never provided submittals on the automatic control systems. Reasons for Termination for Default (Nov. 29, 1993) at 1 ( 2), 2 ( 4). The contract specifies the required submittals relating to this work. The contractor has not made the submittals. At the pre-construction meeting, the agency did not indicate that these submittals were to be made. Finding 7. The agency did not specify the lack of submittals as a basis endangering performance in its initial cure notice. Findings 7, 46. The record does not demonstrate that insufficient time remained under the contract for the contractor to comply with the installation requirements. Submittals In support of the default determination, the agency maintains: Nowhere on the submittals does your firm indicate the submittals have been reviewed by you or your staff in accordance with Section 1300. You also did not provide the correct number of copies so that the submittals could be properly reviewed per the same specification requirement. The submittals did not indicate that ESC had even reviewed the submittals sent to GSA. Contractors generally give the Government the areas where the problems occur and/or suggested action. This contractor only notified the Government of problems. There were never enough specifics to address a real design deficiency. The contractor is responsible to inform the Government of the reasons he feels there is a problem, not accusations and a "it[']s not my job to identify what[']s wrong" attitude. The Government has investigated the allegations and can not find any problems which would have prevented the contractor from working. Reasons for Termination for Default (Nov. 29, 1993) at 3 ( 8). The agency misstates the underlying facts. The contractor provided some submittals with the annotation "ESC approved." Finding 35. In other instances, the COR reviewed and commented upon the submittals even without the annotation. Findings 9, 31. Throughout the course of performance, the contractor's failure to conform to the specified contract requirements did not cause a problem for the COR. Decision The faults by the contractor were minor and correctable within the contract performance period, and arose in the context of the agency unreasonably interpreting various contract provisions and failing to recognize that the interior lighting fixtures in place were not simply as described in the contract. This fixture work constituted approximately two-thirds of the contract price. The agency has not met its burden of proof; it has not established a sufficient basis for the termination for default. The Board GRANTS the appeal. The termination for default is converted to a termination for the convenience of the Government. Among other costs the contractor may be entitled to under the termination for convenience clause, the contractor is entitled to be paid for work it performed under and in accordance with the contract (e.g., work associated with obtaining retrofit kits and the mock- up testing), but not for work done contrary to contract requirements (e.g., providing submittals without the necessary contractor approval). _____________________________ JOSEPH A. VERGILIO Board Judge We concur: _____________________________ _____________________________ ANTHONY S. BORWICK ALLAN H. GOODMAN Board Judge Board Judge