CBCA 6621

DENIED: January 7, 2021 CBCA 6621, 6747 ITS GROUP CORP, Appellant, v. DEPARTMENT OF AGRICULTURE, Respondent. Porcia Hopkins, President of ITS Group Corp, Southhaven, MS, appearing for Appellant. Jennifer McVey Thomas, Office of the General Counsel, Department of Agriculture, Juneau, AK, counsel for Respondent. Before Board Judges SOMERS (Chair), ZISCHKAU, and CHADWICK. SOMERS, Board Judge. The United States Department of Agriculture (USDA) awarded a contract to ITS Group Corp to paint various buildings in a remote area of Alaska. Because ITS Group failed to paint the buildings to the contracting officer’s satisfaction, the contracting officer refused to pay ITS Group progress payments for the work performed. When ITS Group appeared to have vacated the job site, the contracting officer issued a cure notice. In response, ITS Group failed to provide adequate assurance that it could complete the work. The contracting officer terminated the contractor for default. CBCA 6621, 6747 2 ITS Group initially appealed the denial of the claim for progress payments. Later, ITS Group appealed the termination for default. Based upon the record and for the reasons explained below, we deny ITS Group’s appeals. Background On August 8, 2018, USDA solicited bids for the painting of eight buildings in the Kenai Lake Work Center (KLWC), a remote area located in Alaska’s Chugach National Forest. The solicitation encouraged potential bidders to travel to Chugach and to visually inspect the buildings prior to placing a bid on the contract. The contract incorporated standard clauses, including Federal Acquisition Regulation (FAR) 52.246-12 (Inspection of Construction), FAR 52.236-3 (Site Investigation and Conditions Affecting the Work), FAR 52.236-2 (Differing Site Conditions), and FAR 52.232-5 (Payments Under Fixed-Price Construction Contracts). On July 18, 2019, USDA awarded the firm fixed-price contract to ITS Group, a small business located in Southaven, Mississippi. The contracting officer issued the notice to proceed on August 1, 2019. ITS Group employees traveled to Alaska to begin work on the buildings. After a government “inspector-in-training” took the employees on a walkthrough of the site, the inspector discussed and identified certain weathered areas (the southern facing sides of the buildings), noted that the contract required additional preparation and priming to paint those areas, and provided the contractor with paint samples of the paint colors specified by the contract. ITS Group began work that afternoon. Over the weekend of August 10–11, ITS Group painted the exterior of three of the eight buildings with no oversight by government personnel, who did not remain on the worksite over the weekend. The inspector returned to the work site on August 12, 2019. After examining the painting on the first three buildings, the inspector notified the contracting officer and ITS Group representatives that he did not believe the work conformed with contract requirements because it appeared that ITS Group failed to adequately prep the walls prior to painting and that the painting was uneven. Nonetheless, ITS Group contacted the contracting officer to request an official walk-through of the first three buildings, seeking to receive progress payments on the work. The contracting officer told them that the contracting officer’s representative (COR) would be available on August 15. When the COR arrived on August 15, 2019, it appeared that the paint crew had departed the worksite and removed its equipment. After inspecting the work on the three buildings, the COR determined that the contractor had failed to paint the three buildings in conformance with contract specifications. The COR recommended that the contracting officer not release a progress payment for the work completed as it was not acceptable. CBCA 6621, 6747 3 On August 16, the contracting officer sent ITS Group a cure notice as well as a notice of noncompliance with the terms of the contract. On August 20, the contracting officer sent ITS Group a revised cure notice which requested that ITS Group provide a plan for redoing the work to meet contract requirements. ITS Group responded to the cure notice by asserting that the contractor had rendered services and should be paid its progress payment for the work performed.