**QUILLSTONE COMMUNICATIONS** **Termination Settlement Proposal** Contract No. [_____] — Tower Modernization Program **To:** Contracting Officer, National Relay Service **From:** [Name], [Title], Quillstone Communications **Date:** [Date] **Subject:** Final Conversion and Convenience-Termination Settlement Proposal --- This proposal is submitted as a settlement communication, without prejudice to Quillstone’s legal positions. Quillstone does not admit that the August 15 default termination was proper. Quillstone also does not ask the Government to disregard Quillstone’s own unexcused delay. This proposal is intended to resolve all termination-related claims by converting the default termination to a termination for convenience and paying the established settlement amount. --- ## I. Delay Record and Positions Quillstone acknowledges that the first 20 towers were not completed by June 30 and that the 20th tower was completed on August 8, 39 days after the milestone date. Quillstone’s internal critical-path analysis allocates the delay as follows: | Delay Event | Days | Quillstone Position | |---|---|---| | Replacement radio supplier selection | 19 | Not excusable; Quillstone-caused delay. | | Denied mountain-site access during separate-agency wildfire work | 12 | Government-caused and excusable, provided critical-path, non-concurrency, and Government direction are established. Contemporaneous notice was given; Government records have not yet been produced. | | Severe weather | 8 | Excusable if the daily site records support it. Quillstone’s weather records are complete and available. | | **Total** | **39** | | Quillstone does not contend that the 12 access days or the 8 weather days are established merely by assertion. Quillstone recognizes that, under the governing rules, the contractor bears the initial burden to show that a delay is excusable, beyond its control, and not concurrent with unexcused contractor delay. The access-delay defense cannot be fully evaluated until the Government produces records in its possession. Quillstone also acknowledges that its response to the cure notice was a recovery schedule and did not fully separate contractor and Government delay. This proposal supplies the separation that is currently known and identifies the additional records needed to complete the analysis. --- ## II. Government Records Required Under the applicable rule, the Government must preserve and produce records reasonably necessary to evaluate Quillstone’s access-delay defense. Quillstone demands that the Government produce the following records within **10 business days** of acceptance of this proposal: 1. Gate logs, access-control logs, sign-in/sign-out sheets, security logs, and site-entry records for each affected tower site from contract award through August 15. 2. Written or electronic access requests, permits, denials, closure orders, and “no entry” notices regarding the mountain sites. 3. Wildfire work directives, task assignments, orders, and correspondence from the separate agency conducting wildfire work. 4. Communications between the National Relay Service and that separate agency regarding site access and wildfire operations. 5. NRS internal schedules, project schedules, CPM updates, and delay analyses identifying planned access windows, critical-path activities, or site closures. 6. Emails, calendars, meeting minutes, and directives concerning Quillstone’s access requests, the access denial, and any Government direction related to the 12-day delay. 7. Any other records showing whether the 12 access days were on the critical path, were not concurrent with the 19-day supplier delay, and were caused by the Government. Quillstone will, on the same schedule, produce its weather records, internal CPM analysis, supplier-selection timeline, and the contemporaneous emails regarding the access denial. If the Government withholds these records and then argues that Quillstone failed to prove the access-delay defense, Quillstone reserves the right to seek judicial enforcement, rely on available secondary evidence, and pursue an appropriate remedy, including an adverse inference. --- ## III. Weather Position Quillstone maintains that the 8 days of severe weather were beyond Quillstone’s control and may qualify as excusable delay. Quillstone’s daily site weather records are complete and will be produced. Quillstone acknowledges that the weather days, like the access days, must be shown to affect the critical path and not to be concurrent with unexcused contractor delay. Quillstone will address those elements after the record exchange. --- ## IV. Established Convenience-Termination Settlement Amount The Government has not alleged that Quillstone’s certified cost schedule figures are inaccurate. Using the established cost schedule, the net convenience-termination settlement is computed as follows: | Item | Amount | |---|---:| | Allowable performance costs incurred before termination | $6,800,000 | | Profit at 7% of allowable performance costs | $476,000 | | Reasonable settlement expenses | $220,000 | | **Subtotal** | **$7,496,000** | | Less disposal credit for reusable materials | ($300,000) | | Less prior progress payments | ($5,400,000) | | **Net settlement payment to Quillstone** | **$1,796,000** | Profit is computed at the supplied rate of 7% on allowable performance costs, not on settlement expenses. No loss adjustment applies. This computation excludes all anticipatory profit on unperformed work and excludes the separately reserved claim described below. --- ## V. Separately Reserved Idle-Labor Claim The $420,000 idle-labor claim is not included in the $6,800,000 established performance costs and is **not** included in the $1,796,000 net settlement amount. It is separately reserved and is not presented as an established cost. Quillstone will support or withdraw the reserved claim after the Government produces the records identified above and the parties evaluate the access-delay defense. If the parties agree that the $420,000 claim is an allowable performance cost, the additional settlement amount would be: - $420,000 allowable performance costs - Plus 7% profit: $29,400 - **Total additional amount if established: $449,400** The reserved claim may be resolved separately without delaying payment of the established net settlement amount. --- ## VI. Proposed Conversion, Releases, and Payment Terms To resolve the termination dispute, Quillstone proposes the following: 1. **Conversion.** The Government will convert the August 15 default termination to a termination for the convenience of the Government, effective as of the date of termination, through a bilateral modification or settlement agreement. 2. **Payment.** The Government will pay Quillstone the net settlement amount of **$1,796,000** by wire transfer within **30 days** after the settlement agreement is executed. 3. **Mutual release of termination claims.** The Government will release any claim for excess reprocurement costs, liquidated damages, or other default-related damages. Quillstone will release all claims against the Government arising from the termination and conversion, except the reserved $420,000 claim and the right to enforce the settlement agreement. 4. **No admission.** The conversion and settlement are a compromise. Neither party will characterize the settlement as an admission that the default termination was proper or improper. 5. **Property and subcontract closeout.** Quillstone will complete the inventory, property protection, and subcontract closeout required by the governing rules. The parties will cooperate on the disposition of reusable materials, subject to the $300,000 disposal credit already applied. 6. **Reserved claim.** The reserved claim will be resolved in accordance with the timetable below. If not resolved through agreement, it may be pursued separately without affecting the established settlement amount. --- ## VII. Timetable for Record Exchange and Final Agreement Quillstone proposes the following schedule: - **Within 10 business days** after acceptance of this proposal, the Government will produce the requested records and Quillstone will produce its weather records, internal CPM analysis, supplier timeline, and access-denial emails. - **Within 15 business days** after production, the parties will meet and confer regarding the access-delay defense, critical-path and concurrency issues, and the reserved $420,000 claim. - **Within 30 days** after the meet-and-confer, the parties will execute the final settlement agreement and the Government will pay the net settlement amount. --- ## VIII. Mitigation, Property Protection, and Certification Quillstone confirms that it has stopped work as directed, is protecting Government equipment and property, and has begun reasonable subcontract closeout. Quillstone will continue to mitigate costs and will not claim costs incurred after termination other than those included in this settlement or otherwise agreed. The undersigned certifies that this proposal, together with Quillstone’s certified cost schedule, is accurate, complete, and current as of the date of signature; that it includes no claim for anticipatory profit on unperformed work; and that the undersigned is authorized to submit this proposal on behalf of Quillstone Communications. Respectfully submitted, _________________________ **[Name]** **[Title]** **Quillstone Communications** **Enclosures:** Certified cost schedule; weather records; internal CPM analysis; contemporaneous access-denial emails