In government contracting, the mantra “time is money” often holds literal significance. Not only can delays erode profit margins, cause negative CPARS, and impact future awards, but in certain cases, delays lead to the ultimate sanction, a termination for default (“T4D”). In cases of failure to make progress, a T4D often turns on two interrelated questions: (1) whether the Government re-established a contract completion date after letting performance extend past the original deadline and (2) whether the contractor failed to make progress such that timely completion was endangered. A recent ruling by the Civilian Board of Contract Appeals (CBCA) in All Phase Services, Inc. v. Department of Veterans Affairs, CBCA No. 8034 (Aug. 29, 2025) shows how agencies can revive time is of the essence after the completion date has passed and provides valuable insight into how contractors can protect themselves when performance has lagged.
The All Phase case involved a $2.9 million firm-fixed-price contract awarded to All Phase Services, Inc. (“APS”) in October 2020 to replace 55 roofs at the VA Medical Center located in Buffalo, New York. The contract incorporated FAR 52.249-10 Default (Fixed-Price Construction) (APR 1984) and FAR 52.236-7 Permits and Responsibilities (NOV 1991) in addition to two VA-specific clauses limiting the authority of the contracting officer’s representative (“COR”) to administrative duties. By memorandum, the contracting officer (“CO”) emphasized the COR’s limits and advised that any unauthorized commitment by the COR was not a binding commitment on behalf of the Government. The initial period of performance extended until November 12, 2020, but was later modified to December 12, 2022.
Despite documented performance issues, the VA did not enforce the December 2022 completion date. Indeed, in January 2023, the CO told APS he was willing to allow work to continue. Thereafter APS proposed several schedule extensions into 2025, many of which were approved by the COR in writing and the CO was typically copied on the approval correspondence. However, the CO rejected these proposed schedules and, in a March 7, 2023 cure notice, directed APS to submit a revised schedule with a completion date of October 10, 2024. On March 17, 2023, APS produced a schedule showing final inspection in October 2024. APS did not object to the October 10, 2024 deadline. For the next several months, APS made no substantive progress, and the contract was terminated for default on December 12, 2023.
In granting the VA’s motion for partial summary judgment, the CBCA upheld the VA’s T4D for two notable reasons. First, the board found that the VA properly re-established the contract’s completion date in the March 7, 2023 cure notice. The CBCA explained that once a contract’s completion date lapses, the Government can re-establish a completion date through official notices (e.g., cure and show cause notices), provided they set a reasonable and specific deadline. The board rejected APS’s argument that the COR’s written approval extended the schedule, noting that the COR lacked authority to bind the Government and that the CO’s knowledge of that approval was not agency ratification of the COR’s actions. Second, the CBCA concluded that the VA had established a prima facie case of default because the CO held a reasonable belief that APS would not complete the contract within the remaining performance period. At the time of termination, APS had completed roughly 13% of the work, lacked a roofing subcontractor, had incomplete punch lists, and there was only one roofing season in which to complete much of the work. In its briefing, APS did not prove its default was excused which will be the focus of the hearing next month.
As we wait for the final outcome in this case, there are three practical takeaways for contractors: (1) maintain and submit detailed schedules to counter failure to make progress allegations and provide evidence of excusable factors early (e.g., government-caused delay or force majeure); (2) secure proper endorsements for extensions or contract changes and pay close attention to the specific authority granted to agency personnel; and (3) treat agency notices seriously by providing measurable recovery plans and, if necessary, protesting unreasonable Government demands. Remember, always prioritize diligence, timely performance, and formal processes. For guidance on contract administration, equitable adjustment, termination, or the appeals process, contact our firm’s government contracts team.
