MODULE 8 | DISPUTES, CLAIMS, AND TERMINATIONS 3.4 EXERCISE: NONPERFORMANCE Directions 1. Read the latest memo from Carl Customs, the contracting officer's representative (COR) on the Profitable contract. Again, assume that all of the facts Mr. Customs reported are accurate. 2. Work with your group to decide on the best strategy for resolving this problem using the following: Verify the problem - Establish the impact Decide whether to issue a stop work order Decide whether to use an informal solution Decide if modification is necessary Decide whether to issue a formal remedy Decide whether to terminate the contract gent contractor may request such partial paymenty Canwinemalfeas Storesto the government on demand, together with interScenario: Memorandum TO: Terry O'Day, Contract Specialist FROM: Carl Customs, COR RE: Profitable Building Services Contract No. FCA-FY-C-2121 A fairly serious problem has developed on this contract that I think will have to be resolved quickly. The contractor appears unwilling to undertake washing the building's venetian blinds as called for by paragraph 5.8, PWS. When the activity first came up on the Annual Cleaning Schedule, the onsite supervisor requested permission to postpone it because the scaffolding needed in place of the ladders had not yet been obtained. I agreed to this request. On that occasion, we deducted the full amount specified in the contract's deduction table-or $13,693-for the building's 1,760 blinds at $7.78 each. When I calculated the amount, I came to the conclusion that the amount of the deduction was too small and it was to the contractor's advantage simply to skip this task and accept the deduction. Discussions I've had with other building managers have confirmed my impression that actually performing the work would cost the contractor considerably more. In itself, this problem might not be a major one, although we certainly want the blinds washed as the contract requires. The inspectors also report a general deterioration in the quality of other services, and it is clear from the sign-in sheets that there has been a significant reduction in the number of employees assigned to this contract. The contractor appears at best to perform in a borderline manner and risks deductions rather than provide acceptable quality services. The result has been a large number of complaints from the building's occupants, including poorly cleaned toilet rooms, hurriedly done work in office areas, drips and spills throughout the building, and some tasks simply not performed at all. I raised these issues with Mr. Mahoney a week ago. He replied that his costs had risen rapidly and he was doing what was prudent under the circumstances. He added that the company no longer was making a profit and that he would seek bankruptcy rather than agree to put any more money into the firm. This entire situation, both the venetian blinds specifically and the deterioration in general, is no longer acceptable to this activity. I hereby request that this contract be terminated for cause as quickly as possible