Thunderstruck Signs
ASBCA No. 61027
| A.S.B.C.A. | Aug 16, 2017Background
- Contract FA4855-15-P-0136 awarded to Thunderstruck Signs (firm-fixed price, $47,791.16) to supply and install six facility signs for Cannon AFB; original delivery 16 Oct 2015.
- Contract incorporated FAR 52.212-4 (commercial items) including excusable delays and termination-for-cause provisions.
- Government delayed providing artwork until 5 Nov 2015; parties later executed a bilateral extension to 15 June 2016; signs ultimately completed and shipped to New Mexico in late July 2016.
- Government issued show-cause and stop-work communications in Jan–Aug 2016; CO set a final performance deadline of 14 Sept 2016 and warned that failure to meet it would result in termination for cause.
- Thunderstruck failed to deliver/install by 14 Sept 2016 (signs had been stored off-base and moved to a more distant facility), CO terminated for cause on 8 Nov 2016; appellant appealed seeking contract price plus cancellation charge.
- Board considered only whether the default termination was proper under the contract and precedent, and heard the appeal on the written record without a hearing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the government justified termination for default for failure to deliver/install by final date | Thunderstruck: government conduct (late artwork, refusal to accept delivery in early Aug, stop-work order, refusal to coordinate electrician) caused or excused the delay | Air Force: set a reasonable final deadline (14 days) after extensions; Thunderstruck agreed and still failed to perform | Held for government: prima facie default; termination justified because contractor failed to meet reasonable final deadline and prior delays were waived by agreeing to new schedule |
| Whether pre-deadline government-caused delays excused failure to meet the new final delivery date | Thunderstruck: earlier government delays and refusal to permit on-base delivery made timely performance impossible | Air Force: earlier delays were superseded by the mutually agreed or reasonable new delivery date; contractor must meet new schedule | Held: earlier delays were not excusing because parties agreed (or contractor acquiesced) to a new schedule; contractor bears responsibility to meet it |
| Whether the CO's unilateral setting of a new deadline must consider contractor capabilities | Thunderstruck: unilateral deadline was unreasonable given logistics and subcontractor availability | Air Force: deadline was reasonable given contractor's assurances and signs' completion | Held: the 14‑day final deadline was reasonable given contractor confirmations and completed status of signs |
| Whether termination decision was arbitrary, capricious, or an abuse of discretion | Thunderstruck: CO's communications and actions (including contacting subcontractor) were arbitrary and prevented performance | Air Force: actions aimed to preserve contract performance; final opportunity given before termination | Held: termination was not arbitrary; Board denied appeal |
Key Cases Cited
- Lisbon Contractors v. United States, 828 F.2d 759 (Fed. Cir.) (default termination is a drastic remedy and government bears burden to justify)
- J.D. Hedin Constr. Co. v. United States, 408 F.2d 424 (Ct. Cl.) (standards on imposing default termination)
- De Vito v. United States, 413 F.2d 1147 (Ct. Cl.) (government must give a reasonable new delivery schedule when acting unilaterally)
- International Telephone & Telegraph Corp. v. United States, 509 F.2d 541 (Ct. Cl.) (unilateral scheduling must be reasonable considering contractor's capabilities)