**QUILLSTONE COMMUNICATIONS**  
[Address]  
[Date]

**VIA EMAIL AND HAND DELIVERY**

National Relay Service  
Attn: Contracting Officer  
[Address]

**Re: Contract No. [________] — Remote Tower Modernization Program**  
**Final Proposal for Conversion of August 15 Termination for Default to Termination for Convenience and Settlement of Convenience Costs**

Dear Contracting Officer:

Quillstone Communications (“Quillstone”) submits this final proposal to resolve the termination of the above-referenced contract. Quillstone proposes that the Government:

1. convert the August 15 termination from termination for default to termination for convenience, effective as of the date of termination;
2. accept the convenience-termination settlement computation set out below based on the established cost schedule;
3. reserve the separately identified $420,000 idle-labor item for resolution after production of the missing Government records;
4. release and withdraw any claim for excess reprocurement costs or other default-termination damages; and
5. exchange the identified records needed to resolve the remaining access-delay and concurrency issues.

This proposal is made without prejudice to Quillstone’s rights and defenses, except as expressly provided in an executed settlement. Quillstone does not concede that the default termination was proper. At the same time, Quillstone candidly acknowledges the contractor-caused delay reflected in its own records and does not seek to excuse, shift, or recover the cost of that delay.

---

## 1. Contract and Termination Background

The Government awarded Quillstone a $12,000,000 contract to modernize 40 remote towers. A critical milestone required completion of the first 20 towers by June 30.

Quillstone completed 16 towers by June 30 and completed the required 20 towers on August 8. The milestone was therefore completed 39 days after the required date, but before the Government’s August 15 termination.

On July 5, the Government issued a ten-day cure notice. Quillstone responded with a recovery schedule. Quillstone acknowledges that the recovery schedule did not separately allocate contractor-caused and government-caused delay. This proposal supplies that allocation candidly and identifies the Government records still required to evaluate the remaining delay components.

On August 15, the Government terminated the contract for default and announced an intent to reprocure.

Quillstone has stopped nonessential work, preserved Government property, begun reasonable closeout of subcontracts, and is actively mitigating continuing costs.

---

## 2. Candid Delay Allocation

Quillstone’s internal critical-path analysis allocates the 39-day milestone delay as follows:

| Delay Component | Days | Quillstone’s Position | Evidentiary Status |
|---|---:|---|---|
| Late radio-supplier selection after first choice failed credit review | 19 | Contractor-caused; not excusable; acknowledged by Quillstone; no cost recovery sought for this component. | Supported by Quillstone’s internal records. Quillstone does not deny this delay. |
| Alleged Government denial of mountain-site access while a separate agency conducted wildfire work | 12 | Potentially excusable only if the denial was directed by the Government, affected the critical path, and was not concurrent with unexcused Quillstone delay. | Quillstone sent contemporaneous emails regarding access denial. The Government has not produced gate logs, wildfire directives, or its internal schedule. The supplied record does not establish whether these 12 days were on the critical path, overlapped the 19 supplier-delay days, or were directed by the Government. |
| Severe weather | 8 | Potentially excusable if supported by daily site records and if the affected days impacted the critical path and were not concurrent with unexcused contractor delay. | Quillstone’s daily weather and site records are complete. The remaining issue is critical-path and concurrency evaluation. |
| **Total** | **39** | Quillstone does not claim that all 39 days were excusable. | The 19 supplier-delay days are acknowledged as unexcused. The 20 access/weather days remain subject to the missing Government records. |

Quillstone will not claim any delay day that the records show was concurrent with the 19 unexcused supplier-delay days. Quillstone will not seek cost recovery for the 19 supplier-delay days or for costs caused solely by Quillstone’s own unreasonable delay, rework, or failure to mitigate.

---

## 3. Basis for Conversion to Termination for Convenience

Quillstone does not dispute that it bears responsibility for the 19 days of delay caused by its late selection of a radio supplier after its first choice failed credit review. Quillstone does not contend that those 19 days were excusable, beyond its control, and without its fault or negligence.

However, Quillstone does not concede that the default termination was proper. The termination was issued while material records necessary to evaluate the remaining 20 delay days remained in the Government’s control and had not been produced. Quillstone provided reasonably available notice of the alleged access denial through contemporaneous emails, and Quillstone’s weather records are complete. The Government’s failure to produce the identified records prevents a complete evaluation of whether the access and weather delays affected the critical path and whether they were concurrent with the unexcused supplier delay.

Under the applicable rules:

1. a contractor is entitled to excusable-delay relief only to the extent the delay affected the critical path and was not concurrent with unexcused contractor delay;
2. the Government must preserve and produce records reasonably necessary to evaluate a documented access-delay defense, including schedule logs, site-access records, directives, and communications;
3. if a default termination is improper, it converts to termination for convenience; and
4. a negotiated conversion may resolve both the contractor’s convenience settlement and the Government’s excess-reprocurement claim.

Given the acknowledged 19-day contractor delay, Quillstone does not seek to recast the entire 39-day delay as Government-caused. Instead, Quillstone proposes conversion because the termination was premature and the record does not yet permit a proper default determination as to the remaining 20 days. Quillstone reserves all arguments regarding materiality, impropriety of the default termination, and the Government’s record obligations, while proposing settlement of the established cost schedule.

---

## 4. Specific Government Records Required

To determine the critical-path, concurrency, and causation issues, Quillstone requests that the Government produce the following records no later than **10 business days** after this proposal:

1. **Gate and site-access logs** for all mountain sites for all dates on which Quillstone, its employees, or its subcontractors requested or were denied access, including:
   - date and time stamps;
   - personnel and vehicle entries and exits;
   - names of Government or separate-agency personnel present;
   - reasons for any access restriction or denial.

2. **Written access authorization or denial decisions**, including:
   - the official or office making the decision;
   - the factual and operational basis for the denial;
   - the duration of the denial;
   - any site-specific restrictions.

3. **Wildfire-work directives and coordination records**, including:
   - work orders, safety orders, or closure directives;
   - communications between the Government and the separate agency conducting wildfire work;
   - any coordination with Quillstone regarding site availability;
   - records showing whether access restrictions were directed by the Government, the separate agency, or both.

4. **Government internal schedule records**, including:
   - baseline schedule;
   - schedule updates;
   - critical-path analysis or schedule logs;
   - milestone tracking for the first 20 towers;
   - records sufficient to determine whether the alleged access-denial days affected the critical path.

5. **Directives, field orders, and communications** between the Government and Quillstone concerning:
   - site access;
   - wildfire work;
   - weather-related site restrictions;
   - Quillstone’s July 5 recovery schedule;
   - the cure notice;
   - the termination decision.

6. **Records reasonably necessary to evaluate concurrency**, including any documentation showing whether the alleged 12 access-denial days overlapped the 19 supplier-delay days.

Quillstone will produce corresponding records, including its complete daily weather and site records, critical-path analysis, delay allocation, contemporaneous access-denial emails, recovery schedule, and supporting cost-schedule documentation, within the same 10-business-day period.

If any requested record is withheld, the Government should identify the specific record, the basis for withholding, and the redaction, if any, in a manner that preserves the ability to evaluate the critical-path and concurrency issues.

---

## 5. Convenience-Termination Settlement Computation

The Government has not disputed the established cost-schedule figures below. No loss adjustment applies to the supplied cost schedule. The performance-cost base is therefore the established $6,800,000.

| Item | Amount |
|---|---:|
| Allowable performance costs incurred before termination | $6,800,000 |
| Reasonable 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 proposed convenience settlement** | **$1,796,000** |

This computation:

- includes only allowable performance costs incurred before termination;
- applies the supplied reasonable profit rate of 7% only to allowable performance costs;
- includes reasonable settlement expenses;
- reduces the settlement by the $300,000 disposal credit for reusable materials;
- reduces the settlement by the $5,400,000 in prior progress payments;
- excludes the separately reserved $420,000 idle-labor claim;
- excludes any anticipatory profit, fixed-fee profit, lost profit, or profit on unperformed work;
- excludes costs caused solely by Quillstone’s unreasonable delay, rework, or failure to mitigate; and
- does not include any loss adjustment because none applies to the supplied cost schedule.

Quillstone proposes that the Government pay Quillstone a net convenience-termination settlement of **$1,796,000**, subject to the terms of this proposal and execution of a settlement agreement.

---

## 6. Separately Reserved $420,000 Idle-Labor Claim

Quillstone separately identifies a $420,000 idle-labor claim associated with the alleged Government denial of mountain-site access during the wildfire-work period.

This $420,000 claim:

- is not included in the $6,800,000 allowable performance-cost figure;
- is not included in the profit base;
- is not included in the $1,796,000 net convenience settlement above;
- is not supported at this time by the missing Government logs and directives;
- is not presented as an established cost; and
- is reserved for separate resolution after production of the requested records.

If, after review of the records, the claim is supported and found allowable, Quillstone will submit a separately scheduled claim for that item. The claim will then be evaluated for causation, critical-path impact, concurrency with unexcused contractor delay, allowability, mitigation, and any applicable profit or credit treatment under the governing rules.

If the records do not support the claim, Quillstone will waive it.

The Government may not offset the reserved $420,000 claim against the $1,796,000 net settlement unless and until the reserved claim is finally resolved and found allowable.

---

## 7. Post-Termination Compliance, Mitigation, Inventory, and Subcontract Closeout

Quillstone confirms that it has taken the following post-termination actions:

1. **Stop work:** Quillstone has stopped nonessential field work.

2. **Property protection:** Quillstone has secured and preserved Government-furnished equipment and materials. Quillstone will continue to protect Government property in accordance with the termination and applicable property rules.

3. **Inventory:** Quillstone has prepared an initial inventory of reusable materials supporting the $300,000 disposal credit. Quillstone will provide a final inventory to the Government within **10 business days** after this proposal.

4. **Subcontract closeout:** Quillstone has begun reasonable closeout of affected subcontracts. Quillstone will not place new subcontract work except as reasonably necessary to protect Government property, complete required inventory, or mitigate continuing costs.

5. **Mitigation:** Quillstone is actively mitigating continuing costs, including cancellation or reasonable settlement of subcontract and material commitments to the extent consistent with its obligations.

6. **Certification:** Quillstone certifies this proposal as provided in Section 12 below.

---

## 8. Payment Terms

Quillstone proposes the following payment terms:

1. The Government shall pay the net proposed convenience settlement of **$1,796,000** within **30 calendar days** after execution of a settlement agreement and Quillstone’s delivery of the final inventory and certification.

2. Payment shall be made by electronic funds transfer or other mutually acceptable prompt method.

3. The Government shall not offset the reserved $420,000 idle-labor claim against the $1,796,000 payment unless and until that claim is finally resolved and found allowable.

4. If any portion of the reserved $420,000 claim is finally found allowable, the Government shall pay that amount, plus any separately computed allowable profit or credits, within **30 calendar days** after final resolution.

5. If payment is not timely made, Quillstone reserves all rights to interest, remedies, or other relief available under applicable law.

---

## 9. Mutual Resolution of Excess Reprocurement and Default Claims

As part of a negotiated conversion, Quillstone proposes the following mutual resolution:

1. The Government shall issue a written conversion of the August 15 termination from termination for default to termination for convenience, effective as of August 15.

2. Upon conversion and execution of the settlement agreement:
   - the Government shall withdraw or release any claim for excess reprocurement costs;
   - the Government shall release any default-termination damages, penalties, or related claims arising from the termination; and
   - the Government shall withdraw its announced intent to pursue excess reprocurement recovery.

3. Upon receipt of the net settlement payment:
   - Quillstone shall release the Government from claims arising out of the termination, except for the reserved $420,000 idle-labor claim, amounts due under the settlement, and rights expressly preserved in the settlement agreement; and
   - Quillstone shall not pursue any default-related claim against the Government except as expressly preserved.

4. This mutual release shall not impair either party’s rights to payment, enforcement of the settlement agreement, or resolution of the reserved claim.

---

## 10. Proposed Timetable

Quillstone proposes the following timetable:

| Action | Deadline |
|---|---:|
| Quillstone submits final proposal | Day 0 |
| Government acknowledges receipt and confirms willingness to negotiate conversion | 5 business days |
| Government produces initial index/list of responsive records | 5 business days |
| Government produces requested gate logs, access records, wildfire directives, internal schedule, directives, and communications | 10 business days |
| Quillstone produces reciprocal weather records, CPM analysis, delay allocation, access emails, recovery schedule, and cost-support documentation | 10 business days |
| Joint technical conference to review records, critical path, and concurrency issues | 15 business days |
| Supplemental records or clarifications, if necessary | 20 business days |
| Resolution of reserved $420,000 idle-labor claim | 30 business days |
| Execution of settlement agreement | 45 business days |
| Payment of net $1,796,000 settlement | Within 30 calendar days after execution and final inventory/certification delivery |

If the Government fails to produce the requested records within the proposed timeframe, Quillstone will proceed based on the records then available and will preserve all rights and defenses related to the Government’s record obligations.

---

## 11. No Anticipatory Profit and No Inconsistent Denial

This proposal expressly excludes:

- anticipatory profit;
- profit on unperformed work;
- lost profit;
- fixed-fee profit;
- profit on the reserved $420,000 idle-labor item unless and only if that item is finally found allowable and separately computed under the applicable rules;
- any claim for the 19-day supplier-delay component as excusable; and
- any cost recovery for delay, rework, or failure to mitigate caused solely by Quillstone’s own unreasonable conduct.

Quillstone does not deny the contractor-caused delay reflected in its own records. Quillstone acknowledges the 19-day supplier-selection delay and does not seek to represent that delay as excusable, Government-caused, or recoverable.

---

## 12. Certification

Quillstone certifies as follows:

> I certify that:
>
> 1. I have examined this proposal and the underlying cost schedule.
>
> 2. The statements, data, and computations in this proposal are accurate, complete, and fairly stated to the best of my knowledge and belief.
>
> 3. The $6,800,000 allowable performance-cost figure, the $300,000 disposal credit, the $220,000 settlement-expense figure, and the $5,400,000 prior-payment figure are as stated and are supported by Quillstone’s records.
>
> 4. The $6,800,000 performance-cost figure does not include costs caused solely by Quillstone’s unreasonable delay, rework, or failure to mitigate, and any such costs identified later will be excluded or separately reserved.
>
> 5. The $420,000 idle-labor claim is reserved, not established, and not included in the settlement computation.
>
> 6. This proposal does not include anticipatory profit or profit on unperformed work.
>
> 7. This certification does not waive any rights or defenses except as expressly provided in an executed settlement agreement.

Respectfully submitted,

**QUILLSTONE COMMUNICATIONS**

By: ________________________________  
Name: [Name]  
Title: [Title]  
Date: [Date]