__________________________ GRANTED: January 31, 1994 __________________________ GSBCA 11923 RANCO CONSTRUCTION, INC., Appellant, v. GENERAL SERVICES ADMINISTRATION, Respondent. John W. Fowler, Jr., of Blank, Rome, Comisky & McCauley, Philadelphia, PA, counsel for Appellant. Robert C. Smith, Office of General Counsel, General Services Administration, Washington, DC, counsel for Respondent. Before Board Judges DEVINE, BORWICK, and DeGRAFF. DeGRAFF, Board Judge. Appellant, Ranco Construction, Inc. (Ranco) appeals the final decision of respondent's contracting officer terminating for default Ranco's right to perform a construction contract. A hearing was held on June 29-30, 1993. Respondent has not established that its termination for default of Ranco's right to perform was justified; therefore, the Board grants the appeal. Findings of Fact On June 21, 1991, GSA issued solicitation GS-03P-91-DXC- 0035, requesting bids to install an automatic sprinkler system, to upgrade the fire alarm system, and to replace lighting fixtures on three floors of the Boggs Federal Building in Wilmington, Delaware. The solicitation also requests bids for three optional tasks to replace lighting fixtures on three additional floors of the building. GSA never exercised any of the options. The contract was awarded to Ranco on September 10, 1991. The notice to proceed was issued by GSA on September 25, 1991, and received by Ranco on September 26, 1991. Appeal File, Exhibits 1, 3. On May 14, 1992, GSA terminated for default Ranco's right to perform the contract. Appeal File, Exhibit 26. On July 8, 1992, Ranco filed this timely appeal from the termination for default. Contract Requirements The following contract provisions are relevant to resolving this dispute. Section 00800, paragraph 3.01 requires that Ranco begin work within one calendar day after it receives the notice to proceed and that it prosecute the work diligently. Appeal File, Exhibit 1 at 70. Modification AA04 provides that, for security purposes, Ranco was required to notify the contracting officer's technical representative five days in advance of starting any work in the building. Appeal File, Exhibit 1, modification AA04. Clause 98 explains that GSA could terminate for default Ranco's right to perform the contract work if Ranco failed or refused to prosecute the work "with the diligence that will insure its completion within the time specified in this contract . . . ." Clause 98 also provides that the rights and remedies provided to GSA by the clause are in addition to any other rights and remedies provided by law. Finally, clause 98 provides that, in the case of an unjustified termination for default, the rights and obligations of the parties will be the same as if the termination had been issued for the convenience of the Government. Appeal File, Exhibit 1 at 36. Section 00800, paragraph 3.01 of the solicitation provides that Ranco was required to "[c]omplete the entire work ready for use not later than: 420 calendar days for the base bid and an additional 120 calendar days for each option, if exercised." Appeal File, Exhibit 1 at 70. Section 00120, paragraph 3.03 provides, "The Government reserves the right to exercise the options within 420 days after contract award. If the Government chooses to exercise the options, a revised contract completion date will be established." Id. at 66. Modification 03 to the solicitation, issued July 25, 1991, amends section 00800, paragraph 3.01 to provide that Ranco was required to complete the entire work not later than "420 calendar days. This performance period includes completion of the base bid and all option requirements." Modification 03 also amends section 00120, paragraph 3.03 to provide, "The Government reserves the right to exercise the options within 300 days of the date work is to commence under this contract . . . ." Appeal File, Exhibit 1. The first page of the signed contract states that Ranco was required to complete its performance within 420 calendar days after receiving the notice to proceed. The notice to proceed was issued on September 25, 1991, by contract modification PA01. The notice to proceed states that "all work shall be completed within FOUR HUNDRED TWENTY (420) days after receipt of Notice to Proceed." Similarly, contract modification PA03, issued October 1, 1991, provides that the contract completion time was 420 days and that the contract completion date was November 23, 1992. Appeal File, Exhibit 1.[foot #] 1 On March 31, 1992, GSA issued contract modification PA05 in order to "clarify the period of performance, as specified in Amendment 03 dated 7/25/91, for the base bid and the option periods." The modification states that the time of completion for the base bid and all three options is 420 days, and that the "completion date for the Base Bid is hereby established as: JULY 27, 1992. The completion date for the Options (if exercised) is hereby established as: NOVEMBER 23, 1992." This modification was issued unilaterally and no consideration was offered to Ranco. Appeal File, Exhibit 1. Ranco's Performance Of The Lighting Fixture Work On October 10, 1991, Ranco sent GSA its first lighting submittal for approval. GSA disapproved the submittal on October 16, 1991, for a variety of reasons. Appeal File, Exhibit 29 at 14-15. On December 8, 1991, Ranco sent GSA a revised lighting submittal. Appeal File, Exhibit 18. GSA disapproved this second submittal on December 24, 1991, and asked Ranco sixteen questions concerning the lighting products that it intended to supply. Id., Exhibit 29 at 40-41. On January 19, 1992, Lighting Associates, Inc. sent a letter to GSA in response to GSA's December 24, 1991 letter to Ranco. Respondent's Supplemental Exhibit 5. Lighting Associates, Inc. is not a Ranco subcontractor. Instead, it is a representative of various lighting fixture manufacturers, including the manufacturer of the lighting fixture that Ranco proposed. Transcript at 221, 323. Ranco sent GSA a third lighting submittal on January 27, 1992, which GSA disapproved for several reasons on February 18, 1992. Appeal File, Exhibit 29 at 85-88. ----------- FOOTNOTE BEGINS --------- [foot #] 1 GSA's minutes of the October 10, 1991 preconstruction conference also state that Ranco had 420 days, until November 23, 1992, to complete the contract work. Appeal File, Exhibit 5. On December 17, 1991, GSA approved Ranco's progress schedule, which shows that Ranco planned to complete the base bid work by November 20, 1992. Id., Exhibit 13. __ ----------- FOOTNOTE ENDS ----------- On March 18, 1992, Ranco sent GSA another revised lighting submittal. This fourth submittal was disapproved by GSA on March 26, 1992, for various reasons. GSA directed Ranco to send its revised submittal to GSA within two weeks. Appeal File, Exhibit 29 at 100-03. GSA later directed Ranco to send its revised submittal by April 17, 1992. Id. at 110. Ranco sent GSA a fifth lighting submittal on April 22, 1992, which GSA rejected on April 27, 1992. GSA noted that the submittal was late and GSA raised ten questions concerning the submittal. GSA asked that Ranco send a revised submittal by May 12, 1992. Appeal File, Exhibit 29 at 111-13; Transcript at 122. Ranco did not submit any revised lighting submittal. At the hearing, Ranco's witnesses testified that the questions asked in GSA's April 27, 1992 rejection could have been answered easily, within two to seven days. Transcript at 247-53, 340-50. Ranco, however, never sent GSA answers to any of the ten questions. Id. at 301, 365. Ranco's Performance Of The Sprinkler Work Ranco submitted its shop drawings and hydraulic calculations on December 24, 1991. GSA reviewed the submittals and on January 13, 1992, provided Ranco with a seven-page list of design deficiencies. Appeal File, Exhibit 29 at 59-67. On February 10, 1992, Ranco submitted revised shop drawings and hydraulic calculations. Again, GSA reviewed the submittals and, on February 20, 1992, returned them to Ranco with a two-page list of deficiencies. Appeal File, Exhibit 29 at 89-93. On February 28, 1992, Ranco again submitted revised shop drawings and hydraulic calculations. GSA approved the submittals on March 10, 1992. Appeal File, Exhibit 29 at 98. Ranco never performed any of the sprinkler work. Transcript at 153. Ranco's Performance Of The Fire Alarm Work On December 30, 1991, Ranco sent GSA its submittals for the fire alarm work, and GSA approved those submittals on January 14, 1992. Appeal File, Exhibit 29 at 70-72. Also on December 30, 1991, Ranco submitted its fire alarm drawings for approval. Id. at 42-45. GSA wished to change its existing fire alarm system design and on January 15, 1992, GSA notified Ranco that the fire alarm drawings were "on hold" and that a change order would be issued as soon as possible. Id. at 73. On January 28, 1992, GSA asked Ranco to provide a cost proposal for making certain changes to the fire alarm drawings. Specifically, GSA wished to delete the requirement for installing several types of fire alarm indicating devices and, instead, to require Ranco to replace the existing fire alarm bells with horn/strobe devices. Appeal File, Exhibit 14; Transcript at 94- 96. On January 30, 1992, GSA disapproved Ranco's fire alarm drawings, based upon GSA's intent to issue a change order. Appeal File, Exhibit 29 at 81. On February 6, 1992, Ranco responded to GSA's January 28, 1992 request with a proposal requesting an additional $24,337 to perform this work and stated that it would defer preparing its fire alarm drawings until this issue was decided. Appeal File, Exhibit 14. This estimate exceeded GSA's estimate by approximately $14,000. Respondent's Supplemental Exhibit 1. The parties continued to discuss the cost of the change until late March 1992. Appeal File, Exhibit 14. The appeal file does not establish that a change order was ever issued. Ranco never performed any of the fire alarm work. Transcript at 154. Ranco's Performance In General On November 20, 1991, the contracting officer wrote to Ranco and stated that GSA had not received a progress schedule or a submittal schedule. The progress schedule should have been received on October 2, 1991, and the submittal schedule should have been received on October 15, 1991. The November 20, 1991 letter requires Ranco to submit these documents within five days after receipt of the letter, which was November 25, 1991. Appeal File, Exhibit 7. As of December 5, 1991, Ranco had not submitted either a progress schedule or a submittal schedule. Id., Exhibit 9. On December 9, 1991, Ranco submitted a construction progress schedule. GSA returned the schedule, unapproved, on December 10, 1991. GSA stated that Ranco had underestimated the length of time required to perform the work required by the contract and had not complied with all of the contract's requirements concerning scheduling. Appeal File, Exhibit 10. On December 10, 1991, Ranco submitted its submittal schedule. GSA returned the schedule, unapproved, on December 11, 1991. The schedule was not approved because it was incomplete. Id., Exhibit 11. On December 12, 1991, GSA sent Ranco a cure notice, based upon Ranco's failure to submit timely progress and submittal schedules. GSA noted that Ranco's construction progress schedule was sent to GSA sixty-eight days late and that the submittal schedule was sent fifty-six days late. GSA notified Ranco that its failure to submit these items in a timely manner was endangering performance of the contract, and required Ranco to cure this problem within ten days. Appeal File, Exhibit 12. On December 16, 1991, Ranco submitted its construction progress schedule, which was the same as its December 9, 1991 schedule. Ranco explained to GSA that GSA had misread the December 9, 1991 schedule, and GSA approved Ranco's December 16, 1991 schedule on December 17, 1991. Appeal File, Exhibit 13; Transcript at 114. On December 23, 1991, Ranco sent GSA its submittal schedule, which GSA approved on January 13, 1992, subject to certain revisions. Id. In late March 1992, GSA became concerned because Ranco had not yet performed any work on site. Shop drawings for only the sprinkler portion of the work had been approved. There were no approved fire alarm drawings and no approved lighting submittal. GSA believed that the contract completion date was July 21 or 27, 1992. Appeal File, Exhibits 15, 18, 20. GSA met with Ranco in early April 1992, to discuss when Ranco intended to begin work. Ranco stated that it would perform the lighting fixture portion of the contract and that it would subcontract the sprinkler and fire alarm work. Ranco also stated that it might be able to begin work the following week. Id., Exhibit 17. At this meeting, GSA reminded Ranco that it was required to provide GSA with advance notice of when and where Ranco intended to work, so that GSA could arrange for security personnel, could determine whether Ranco's proposed work area would be available, and could notify the building's tenants that work would be performed. The Boggs Federal Building houses federal courts and, if a courtroom was in use, Ranco would not be able to work in that area. Transcript at 89-92. On April 3, 1992, Ranco notified the manager of the federal building that Ranco's mechanical contractor wished to begin work on April 8, 1992. Ranco sent a copy of this notification to the contracting officer's technical representative. The notice does not state where in the building the mechanical contractor intended to work or the time it intended to begin work. On April 7, 1992, GSA notified Ranco that it could not begin work until it had provided the appropriate GSA employee with the notice required by the contract. Appeal File, Exhibit 19. The record does not contain any further notice from Ranco concerning its readiness or desire to begin work on site. On April 8, 1992, the contracting officer wrote a letter to Ranco. The letter states that the contract was due to be completed by July 27, 1992, and notes that a substantial portion of the required work had not yet begun. The contracting officer asked that Ranco provide GSA with a plan for timely completion, showing the specific areas where work was to be performed and the number of employees to be working in each area, and containing any other information concerning timely completion that Ranco wished to provide. In addition, the contracting officer noted that Ranco's original progress schedule states that work on site was to begin January 26, 1992. Because that date had passed and no on-site work had begun, the contracting officer asked Ranco to supply a revised progress schedule. The contracting officer asked Ranco to supply the plan for timely completion and the progress schedule by April 22, 1992. Appeal File, Exhibit 21. Ranco provided a revised progress schedule dated April 20, 1992. The schedule shows that Ranco intended to begin work on April 27, 1992, and complete work on November 20, 1992. The schedule does not include any of the work that would have been required if GSA exercised any of the three options. Neither does the schedule include the fire alarm work. Appeal File, Exhibit 22. Ranco's treasurer testified that Ranco could have completed the lighting work and the sprinkler work by November 20, 1992, if work had begun at the time shown on this schedule. Transcript at 271, 291. Ranco's treasurer testified that the lighting work could have been completed well before November 20, 1992. Id. at 276. He also testified that it might have been possible to complete the sprinkler work somewhat earlier than November 20, 1992, although this is not certain. Id. at 290-93. He did not know what GSA wanted when it requested a "plan for timely completion" and that he had not heard that term before. Id. at 277. The Cure Notice And The Termination For Default On May 1, 1992, the contracting officer sent Ranco a cure notice. The notice states that Ranco's April 20, 1992 revised progress schedule was unacceptable because it shows a completion date of November 20, 1992, instead of July 27, 1992; because the time allowed to complete the lighting fixture work is not realistic, given that no lighting submittal had been approved and Ranco needed four months to acquire the electronic ballasts for the lighting fixtures; and because the progress schedule does not include the fire alarm portion of the contract. Appeal File, Exhibit 23. The cure notice also states that Ranco never submitted any plan for timely completion. The notice concludes that Ranco's failure to submit an acceptable progress schedule, an acceptable lighting submittal, and a plan for timely completion were conditions endangering timely performance of the contract. GSA gave Ranco ten days from the date it received the cure notice to submit a plan of timely completion, an acceptable progress schedule, and an acceptable lighting submittal. Ranco received the cure notice on May 4, 1992. Id. On May 6, 1992, Ranco responded to the cure notice. Ranco's response states that, according to the contract, the completion date is November 20, 1992, and not July 27, 1992, and that Ranco did not need four months to obtain electronic ballasts. Ranco states that the features of the lighting fixture products that it proposed in its fourth lighting submittal exceed the requirements of GSA's specifications. Ranco does not state that it intended to send GSA a revised lighting submittal or that it intended to answer the ten questions asked by GSA concerning Ranco's fifth lighting submittal. In fact, it is not clear that Ranco intended to supply the lighting fixture products that it had proposed in its fifth lighting submittal. Ranco explains that its progress schedule does not include the fire alarm portion of the contract because GSA had not yet ordered an anticipated change to the contract's requirements. Ranco's letter does not address GSA's request for a plan for timely completion. Appeal File, Exhibit 24. Ranco's treasurer testified that the schedule does not show the fire alarm work because he did not know when he would be able to begin the work, given that GSA had not issued a modification to the contract. He did not know whether GSA would issue a modification, proceed without a modification, or make changes other than those that GSA anticipated when it requested Ranco's cost proposal. Transcript at 277. Ranco's treasurer testified that the fixtures, including the electronic ballasts, could have been procured by Ranco in time to permit Ranco to meet its proposed schedule. Id. at 268-70. A representative from Lighting Associates testified that the ballasts could have been obtained in two to three weeks. Id. at 353-56. The contracting officer reviewed Ranco's response to the cure notice. He believed that Ranco was required to complete the contract work by July 27, 1992. He did not believe that Ranco could perform by that date and so he decided to terminate for default Ranco's right to perform the contract. The contracting officer testified that he doubted whether Ranco could have completed the work required by the contract, whether the correct contract completion date was July 27 or November 23, 1992. Transcript at 150, 158, 174. On May 14, 1992, GSA terminated Ranco's right to perform the work required by the contract. GSA's termination notice states that Ranco's May 6, 1992 response to GSA's cure notice does not provide any of the documents requested by the cure notice and does not address the concerns expressed by GSA. Therefore, the notice explains, the contracting officer determined that Ranco failed to cure the deficiencies identified in the May 1, 1992 cure notice and decided to terminate for default Ranco's right to perform. Appeal File, Exhibit 26. This appeal followed. Discussion A termination for default has been described as "a drastic sanction which should be imposed or sustained only for good grounds and on solid evidence." J. D. Hedin Construction Co. v. United States, 408 F.2d 424, 431 (Ct. Cl. 1969). The burden of proving that there are good grounds and solid evidence falls to GSA, which must establish that its decision to default terminate Ranco's right to perform was justified, given the circumstances as they existed at the time the decision was made. Lisbon Contractors, Inc. v. United States, 828 F.2d 759 (Fed. Cir. 1987). There are two possible justifications for GSA's decision to terminate Ranco's right to perform. GSA's decision was justified if the evidence establishes that Ranco failed to prosecute the work with the diligence that would ensure its completion within the time required by the contract. Alternatively, GSA's decision was justified if the evidence establishes that the termination action was taken pursuant to GSA's exercise of some other right or remedy made available by law or by contract. Because neither of these justifications is valid, we grant this appeal. Failure To Prosecute The Work GSA concluded that the termination for default was warranted because Ranco was not prosecuting the work with sufficient diligence to ensure that the work would be performed by the contract completion date. In order to persuade us that this conclusion is correct, GSA is not required to establish that timely performance by Ranco was impossible. Rather, GSA is required to establish that, at the time of the termination, there was a reasonable, valid basis for concluding that there was no reasonable likelihood that Ranco could perform within the time remaining for performance. Lisbon Contractors, 828 F.2d at 765; RFI Shield-Rooms, ASBCA 17374, et al., 77-2 BCA 12,714. GSA contends that the contract completion date was July 27, 1992, which is 300 days after Ranco received the notice to proceed, and that Ranco could not have completed its performance by that date. We agree with GSA that Ranco could not have completed its performance by July 27, 1992. We do not agree, however, that July 27, 1992 was the contract completion date. At the time Ranco submitted its bid, the solicitation provided that Ranco was entitled to complete all work, including both base bid and options work, within 420 days, and that GSA would exercise its options within 300 days. Similarly, the notice to proceed, contract modification PA03, GSA's minutes of the preconstruction conference, and the GSA-approved progress schedule all state that Ranco had 420 days, until November 23, 1992, to perform all of the work required by the contract. When these documents were prepared, GSA had not exercised any of its options. None of these documents suggests either that the 420 days was divided between base bid work and options work or that the 420-day performance period could be shortened by GSA if no options were exercised. Modification PA05, which states that Ranco was required to complete the base bid work within 300 days, is described by GSA as a clarification. In fact, modification PA05 is inconsistent with other terms of the contract and was never agreed to by Ranco. Ranco had 420 days, until November 23, 1992, to perform. GSA did not establish that there is any valid, reasonable basis for concluding that Ranco would have been unable to perform by that date. Although the contracting officer testified that he did not believe that Ranco would have been able to perform by November 23, 1992, the record does not reflect any factual basis for this belief. Ranco introduced persuasive evidence to establish that it could have completed both the sprinkler work and the lighting fixture work by November 23, 1992. Although Ranco did not establish when it could have completed the fire alarm work, Ranco did not have the burden of proof. In addition, at the time of the termination, it was not clear what fire alarm work GSA wanted Ranco to perform and so it was not clear how long the work would have taken to accomplish. GSA misapprehended the date that performance was due and failed to establish that there was a reasonable possibility that Ranco could not have performed by the correct contract completion date. Thus, there is insufficient evidence to establish that Ranco failed to prosecute the work with the diligence that would ensure its completion within the time required by the contract.[foot #] 2 Other Available Rights And Remedies GSA, like any other contracting party, had a common law right to terminate Ranco's right to perform if Ranco repudiated the contract. If Ranco had stated positively, definitely, unconditionally, and unequivocally that it intended not to perform, this would have constituted a repudiation of the contract and GSA would have been entitled to terminate Ranco's right to perform. Cascade Pacific International v. United States, 773 F.2d 287 (Fed. Cir. 1985); National Union Fire Insurance Co., ASBCA 34744, 90-1 BCA 22,266, aff'd, 907 F.2d 157 (Fed. Cir. 1990)(table). The evidence does not establish that Ranco made any statements which amounted to a repudiation of the contract. Some courts and one board have held that a party to a contract has a right to demand assurance of performance when it reasonably suspects that the other party will not perform and that failure to provide adequate assurance constitutes a repudiation of the contract. In a repudiation of this sort, there is no requirement of a positive, definite, unconditional, unequivocal statement of intent not to perform. Tubular Aircraft Products, Inc. v. United States, 566 F.2d 1190 (Ct. Cl. 1977) (Court adopted opinion of trial judge which appears in 23 CCF 81,327, at 86,619 (1977)); International Verbatim Reporters, Inc. v. United States, 9 Cl. Ct. 710 (1986); National Union Fire Insurance Co., ASBCA 34744, 90-1 BCA 22,266, aff'd, 907 F.2d ----------- FOOTNOTE BEGINS --------- [foot #] 2 Ranco argues that the termination should be set aside because GSA did not estimate the amount of time which Ranco would have needed to perform. Ranco asserts that such an estimate was required by the Federal Acquisition Regulation, 48 CFR 49.402-3(f) (1992). Although we do not need to reach this point given our holding, we note that section 49.402-3(f) seems to apply to supply contracts, not to construction contracts. The predecessor section in the Federal Procurement Regulation was 41 CFR 1-8.602-3(c) (1984), which applied exclusively to supply contracts. Although the Federal Procurement Regulation contained a section (41 CFR 1-18.803-5(a)(3) (1984)) that applied to construction contracts, this section was never incorporated into the FAR. Even if section 49.402-3 applies to construction contracts, a failure to consider one of its factors "is not an automatic admission ticket to a termination for convenience." Lafayette Coal Co., ASBCA 32174, 89-3 BCA 21,963, at 110,482. __________________ ----------- FOOTNOTE ENDS ----------- 157 (Fed. Cir. 1990) (table); Salzburg Enterprises of California, ASBCA 29509, 87-2 BCA 19,761. The principle that repudiation consists of a failure to provide adequate assurance of performance in response to a reasonable demand is not found in common law. Instead, the principle is found in section 2-609 of the Uniform Commercial Code (U.C.C.), which provides: Section 2-609 Right to Adequate Assurance of Performance (1) A contract for sale imposes an obligation on each party that the other's expectation of receiving due performance will not be impaired. When reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand adequate assurance of due performance and until he receives such assurance may if commercially reasonable suspend any performance for which he has not already received the agreed return. . . . . (4) After receipt of a justified demand failure to provide within a reasonable time not exceeding thirty days such assurance of due performance as is adequate under the circumstances of the particular case is a repudiation of the contract. U.C.C. 2-609. Apparently in reliance upon this U.C.C. provision, the Restatement (Second) of Contracts 251 provides that a buyer may demand adequate assurance of full performance by the seller and may treat a failure to provide assurance as a repudiation. It is questionable whether adequate authority would support a holding that the concept expressed in U.C.C. 2-609 should be applied in this construction contract case. Section 2-609 applies only to contracts for the sale of goods and there is very little precedent to support extending U.C.C. requirements to other types of contracts. The contract in Tubular Aircraft was for the purchase of goods (mail delivery vehicles). In International Verbatim Reporters, the contract was for the purchase of goods (transcripts) and services. The contract in Salzburg Enterprises was for the purchase of goods (video tapes). Thus, none of these decisions supports the application of section 2-609 to a construction contract. Although the contract at issue in National Union Fire Insurance was for construction, the board's decision is grounded only upon the holding in Salzburg Enterprises and the provision of Restatement 251. As discussed above, Salzburg Enterprises was a contract for the sale of goods and the Restatement's provision is based upon U.C.C. 2-609, which does not apply to construction contracts. For this reason, we are reluctant to rely upon the holding in National Union Fire Insurance as providing a basis for concluding that GSA was entitled to demand adequate assurance of full performance by Ranco and to treat a failure to provide assurance as a repudiation. Discount Co. v. United States, 554 F.2d 435 (Ct. Cl.), cert. denied, 434 U.S. 938 (1977), a construction contract case, has been cited for the proposition that a termination for default is justified if a contractor fails to provide reasonable assurance that it can perform within the time permitted. But, the holding in Discount does not support this proposition. The Court held that a termination for default was appropriate because Discount had made so little progress that, at the time of the default, there was an inadequate indication of the diligent performance required to ensure completion of the project within the contractual time. Although the Court found that the Government was justifiably unsure that Discount could perform within the time permitted and that Discount did not assure the Government that it could perform, the Court did not hold that Discount had repudiated the contract. Assuming, without deciding, that the concept expressed in U.C.C. 2-609 is applicable to construction contracts, it would not support a holding that the termination for default in this case was justified. On May 1, 1992, when GSA sent its cure notice requesting reassurance from Ranco, if GSA had realized that Ranco had seven months to perform and if GSA had known that performance within seven months was possible, GSA would have had no reason to request reassurance from Ranco. Because GSA mistakenly believed that Ranco's performance was due in three months instead of seven, the request for reassurance contained in GSA's May 1, 1992 cure notice was not reasonable. In summary, the evidence does not establish that Ranco made a clear, unequivocal statement that it intended not to perform. In addition, assuming that the Government is entitled to terminate a construction contract based upon a contractor's failure to provide adequate assurance that it will perform, the evidence does not establish that GSA's request for reassurance was reasonable. For these reasons, we hold that GSA has not established that its termination was justified. Decision The appeal is GRANTED. In accordance with the contract's Default clause, because the decision to terminate Ranco's right to perform was not justified, the rights and obligations of the parties are the same as if the termination had been issued for the convenience of the Government. _______________________________ MARTHA H. DeGRAFF Board Judge We concur: ______________________________ _______________________________ DONALD W. DEVINE ANTHONY S. BORWICK Board Judge Board Judge