________________________ August 31, 1998 ________________________ GSBCA 14487 NBJ RESTORATION, INC. Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. David Jones, President, NBJ Restoration, Inc., Youngstown, OH, appearing for Appellant. George U. Lane, Office of Regional Counsel, General Services Administration, Atlanta, GA, counsel for Respondent. Before Board Judges PARKER and GOODMAN. GOODMAN, Board Judge. Appellant, NBJ Restoration, Inc. (appellant or NBJ) appeals the decision of the General Services Administration's (GSA s) contracting officer dated January 23, 1998, which terminated for default NBJ s contract for janitorial services. Appellant has requested the accelerated procedure pursuant to Board Rule 203, and the parties have elected to submit the case for a decision on the record pursuant to Board Rule 111. Findings of Fact 1. The General Services Administration issued Request for Proposal No. GS-04P-97-EWC-0C15 on January, 15, 1997, for the procurement of janitorial services at the U.S. Secret Service Command Post in Plains, Georgia. Appeal File, Exhibit 1. On August 19, 1997, a contract was awarded through this procurement to NBJ Restoration, Inc. at a monthly price of $913. The contract term was a base period of one year with four one-year option renewal periods. Appeal File, Exhibit 7. 2. The contract provided a detailed statement of work of daily and other periodic cleaning to be performed. Appeal File, Exhibit 1 at 31. 3. The contract incorporated by reference the clause set forth in FAR 52.249-8 entitled Default (Fixed-Price Supply and Service) (APR 1984), which reads in relevant part: (a)(1) The Government may . . . by written notice of default to the Contractor, terminate this contract in whole or in part if the contractor fails to- (i) deliver the supplies or to perform the services within the time specified in this contract or any extension; (ii) make progress so as to endanger performance of this contract (but see subparagraph (a)(2) below); or (iii) perform any of the other provisions of this contract (but see subparagraph (a)(2) below). (2) The Government's right to terminate this contract under subdivisions (1)(ii) and (1)(iii) above, may be exercised if the Contractor does not cure such failure within 10 days (or more if authorized by the Contracting Officer) after receipt of the notice from the Contracting Officer specifying the failure. Appeal File, Exhibit 1 at 2. 4. The contract incorporated by reference the clause set forth in FAR 52.233-1 entitled Disputes - Alternate I (OCT 1995), which reads in relevant part: The Contractor shall proceed diligently with performance of this contract, pending final resolution of any request for relief, claim, appeal, or action arising under or relating to the contract, and comply with any decision of the Contracting Officer. Appeal File, Exhibit 1 at 1. 5. On December 3, 1997, an unsatisfactory inspection report was issued by the GSA inspector at the site. Sign-in sheets reflected that NBJ's subcontractor did not arrive to clean the building on November 16 and 17, 1997. Appeal File, Exhibit 8. 6. On December 8, 1997, Mr. David Jones, owner of NBJ, contacted GSA and left a message regarding non-receipt of payment for two previous invoices. Appeal File, Exhibit 9. 7. GSA withheld payment from appellant in response to three Notices of Levy from the IRS against appellant in the amount of $103,481.76, which it had received in October, Appeal File, Exhibit 9; Affidavits of Renee Bowers ( July 21, 1997 and August 11, 1998), included in respondent s record submission. Appellant s president claims that the IRS notices did not name appellant, but another company, Jones Janitorial, that allegedly owed the taxes to the IRS. Appellant s Record Submission, June 24, 1998. Appellant s president states: [A]lthough NBJ Restoration, Inc. is listed as the alter ego, it is not NBJ Restoration, Inc. who owes the IRS. . . . [The IRS] was wrong to levy NBJ Restoration, Inc., as [alter] ego to Jones Industrial Services, Inc., as these are two totally separate corporations, as Jones Industrial Services, Inc. whom [sic] is responsible for paying the debt. . . . I was also told by the Internal Revenue Service, that I have a right to recoup the monies for NBJ Restoration, Inc., because this is not the corporation that owes the money or had the levy placed against it, all levies against Jones Industrial Service. Appellant s Supplemental Submission, August 24, 1998. 8. One of the three Notices of Levy from the IRS specifically identifies the taxpayer as appellant, NBJ Restoration Inc., and references the contract number at issue in this appeal, while another specifically references appellant as an alter ego of another taxpayer named in the notice. Respondent s Record Submission, August 20, 1998. 9. GSA issued a check dated January 13, 1998, payable to the Internal Revenue Service in the amount of $2739, the first three months of proceeds for the contract. Appellant s Notice of Appeal, Exhibit D. 10. On January 7, 1998, the contracting officer received an electronic mail message from a GSA employee, stating that Quality Supply and Services, Inc., appellant s subcontractor, failed to arrive to clean the premises on January 6, 1998. Appeal File, Exhibit 11 at 111. 11. On January 8, 1998, the contracting officer spoke with Mr. David Jones of NBJ. According to the contracting officer, Mr. Jones assured him that NBJ s subcontractor would return to the site and continue to perform. Appeal File, Exhibit 11 at 111. 12. NBJ s subcontractor reported to the site on January 7, 1998, and performed the cleaning services through January 9, 1998. Appeal File, Exhibit 11 at 111. 13. On January 13, 1998, the contracting officer was informed by a GSA employee that appellant s subcontractor failed to arrive to clean the premises on January 12, 1998. The contracting officer recommended that services be obtained from other sources. Appeal File, Exhibit 11 at 112. 14. On January 20, 1998, the contracting officer was informed by a GSA employee that no representative of appellant had been on site or had contacted the job site since January 9, 1998. Appeal File, Exhibit 11 at 112. 15. The contracting officer issued a letter designated as a final decision of the contracting officer dated January 23, 1998, terminating the contract for default. The letter read in pertinent part: This letter is to inform you that your failure to perform as required in accordance with the above referenced contract constitutes abandonment, and therefore, default. Effective January 23, 1998 Midnight, your right to proceed under this contract is hereby terminated for default in accordance with FAR 52.249-8. From January 12, 1998 through January 21, 1998, no employee of your firm reported to the facility to perform services as required by the contract. Attempts to contact your firm for resolution have been unsuccessful. Since you have failed to perform the services within the time specified in this contract, there is no other recourse but to terminate for default. Appeal File, Exhibit 12. 16. A modification to the contract, Number P001, terminating the contract for default, was also issued on January 23, 1998. Appeal File Exhibit 14. 17. On January 27, 1998, appellant filed a notice of appeal with this Board, claiming that the termination for default was wrongful. The appeal was docketed as GSBCA 14487. In its notice of appeal, appellant has requested that his company be paid in full for the remainder of the contract ($8190) and $25,000 damages. [foot #] 1 Appeal File, Exhibit 16 at 130. Discussion Appellant has appealed the contracting officer s final decision terminating the contract for default. The Government has the burden of proving that a default termination is warranted because such a termination is a drastic action . . . which should be imposed (or sustained) only for good grounds on solid evidence. J.D. Hedin Construction Co. v. United States, 408 F.2d 424, 431 (Ct. Cl. 1969); see, also Pro/Des Inc. v. General Services Administration, GSBCA 13165, 96-2 BCA 28,510. In this instance, the Government has met its burden of proof. The Government has submitted unrebutted evidence that the contractor failed to perform the contract requirements from January 12 through January 21, 1998, thereby abandoning performance of the contract. Findings 12-15. The contract contained a schedule for daily cleaning. Finding 2. Pursuant to the default clause of the contract, the Government may terminate the contract if the contractor fails to deliver the supplies or to perform the services within the time specified in this contract or any extension. Finding 3. Accordingly, the Government had sufficient grounds to terminate the contract for default, as the contractor abandoned performance. Appellant maintains that the termination for default of appellant's contract was improper for several reasons. Appellant contends that GSA did not send appellant a notice giving appellant an opportunity to cure its deficient performance. With respect to appellant s argument, we agree with GSA that neither the contract nor broader principles of law require that a cure notice be sent in these circumstances. The default clause of appellant s contract contained specific language (Finding 3) which has been previously interpreted by this Board in CWI Consultants and Services, GSBCA 13887, 98- 1 BCA 29,453. In that case, the Board stated: In simple terms, this language means that, although the Government is required to send a cure notice in certain circumstances, it does not have to send one where the contractor fails to perform the services required by t h e c o n t r a c t w i t h i n t h e t i m e ----------- FOOTNOTE BEGINS --------- [foot #] 1 While this request for monetary compensation was included in the notice of appeal, there is no contracting officer s final decision with regard to this request. ----------- FOOTNOTE ENDS ----------- specified.[[foot #] 2] Such an arrangement is not prohibited by any principle of general law. See GossetteContract Furnishers,GSBCA 6758,83-2BCA 16,590. 98-1 BCA at 146,218. As discussed above, in the instant case, appellant failed to perform the services required by the contract within the time specified. Thus, the conditions specified in the contract for terminating the contract without first sending a cure notice were satisfied. Appellant also contends that the Government failed to provide notice that appellant s subcontractor had not performed the contract requirements. The subcontractor is within the control of the contractor. The Government is not required to notify the contractor if a subcontractor fails to appear on site. Rather, it is reasonable for the Government to assume that the contractor was aware that its own subcontractor had not appeared. While appellant does not dispute that its subcontractor abandoned further performance of the contract, it contends that the abandonment was justified by the Government's allegedly improper withholding of monies due appellant to satisfy a notice of levy issued by the IRS. Appellant claims that these actions reduced its cash flow and impaired its ability to pay its subcontractor. The contract's Disputes clause provides that in the event a dispute arises between the Government and a contractor during performance of a contract, the contractor is to continue his work diligently pending a final decision. Finding 4. Generally, the contractor may not abandon performance of his contract. However, a failure or refusal by the Government to pay for contract work or items is a breach of contract justifying abandonment. Drain-A-Way Systems, GSBCA 6473, 83-1 BCA 16,202. In this case, it is clear that GSA was directed by the IRS to withhold contract payments from appellant to satisfy a tax levy in the amount of $103,481.76. Contrary to the assertions of appellant, Finding 7, one of the IRS's notices of levy specifically named appellant as the taxpayer and referenced the contract at issue in this case. Finding 8. A tax levy is a sovereign act of the United States Government, and it suffices for our purposes that the levy was issued against the appellant ----------- FOOTNOTE BEGINS --------- [foot #] 2 Appellant has submitted copies of cure notices received with regard to other contracts alleging that these notices show that a cure notice was required in the instant case. The cure notices submitted with regard to the other contracts did not concern failure to perform, but rather, failure to furnish a performance bond. ----------- FOOTNOTE ENDS ----------- and contract. We have no authority to determine the levy s validity. If appellant believes the levy was erroneous, it must pursue that course through forums other than this Board. Under similar circumstances, the Government s withholding of contract payment pursuant to an IRS levy, which the appellant asserted was erroneous, has been held not to justify abandonment of contract performance. Ultimate Janitorial Services, Inc., GSBCA 6905, 84-1 BCA 17,136. Without proof of a legally sufficient excuse, appellant cannot overcome GSA's clear showing that appellant failed to perform as required by the contract. Finally, claimant seeks payment of the remainder of the contract plus $25,000 damages. This affirmative claim for monetary damages has not been presented to the contracting officer for a final decision, Finding 17, and accordingly, we lack jurisdiction to decide these issues. Decision The appeal is DENIED. _________________________ ALLAN H. GOODMAN Board Judge I concur: _______________________ ROBERT W. PARKER Board Judge