a) Rescission of Contract - It is understood that, in case of failure on the part of the Contractor to complete the Contract as herein specified and agreed upon; or if the work to be done under this Contract be abandoned by the Contractor; or if this Contract be assigned by the Contractor other than herein specified; or at anytime the Administrator is of the opinion, after verifying the fact, that the work is unnecessary or unreasonably delayed; or that the Contractor wilfully violates any of the conditions, covenants, and agreements of this Contract or is not executing said Contract in good faith; or is not making such progress in the execution of the work as to insure its completion within the required time, then, in any of these causes, the Administrator shall have the power to rescind this Contract by giving notice in writing to that effect to the Contractor and his Bondsmen. Such notice shall contain the reason or reasons for such intention to cancel the Contract, and if within 30 calendar days after serving such notice the Contractor fails to overcome or make positive steps to overcome the reason or reasons specified, upon the expiration of said 30 calendar days the Administrator shall recommend to the President (for Contracts approved by the President) or to the NIA Board (for Contracts approved by the NIA Board) or to the Secretary of Public Works and Highways (for Contracts approved by the Secretary) for approval of the Contract rescission. After such approval, the right of the Contractor to continue prosecuting the work shall cease and terminate and the Contract shall be considered cancelled and/or rescinded. Immediately thereafter, a written notice shall be served by NIA to the Contractor and his Bondsmen. Upon giving such notice, the NIA shall then take over the work and proceed to complete the same by administration or otherwise, and shall have the right at its option to take possession and utilize in completing the Contract Work such materials, equipment and tools as may be found upon the line of the work and also procure other equipment, tools and materials for the completion of the work as may be required.
It is agreed and understood that, upon such rescission of the Contract, the Administrator will ascertain and fix the value of the work completed by the Contractor but not yet paid by the NIA and all useable materials on the line of the work taken over by NIA at the time of the said rescission. Payment for the unpaid accomplished work shall only be effected after completion of the entire Contract Work and in the manner set forth below. Likewise, an inventory of the remaining Contract Work shall be jointly undertaken by the NIA and the Contractor. In the event that the actual total expenditure of the NIA in completing the remaining works plus the value of the unpaid accomplished work at the time of rescission is not in excess of the combined value of the remaining works (calculated by using the original Contract unit prices or the latest approved escalated unit prices) before the time of rescission based on the original Contract unit prices or adjusted unit prices at the time of rescission then their difference shall be applied to settle claims filed under Article GC-33, PAYMENT BY CONTRACTOR-UNPAID CLAIMS and the balance, if any, may be paid to the Contractor, but in no case shall such payment exceed the combined value of the unpaid accomplished work, retained money on paid accomplishments and useable materials taken over by the NIA at the time of the rescission of the Contract. No claim for prospective profits on the work done after rescission of the Contract shall be considered or allowed.
b) Right to Recover - The Contractor and his Sureties shall be liable to NIA in case the actual cost of the remaining Works after completion exceeds the value of the remaining Works based on the original Contract unit prices before the time of rescission. The Performance Bond filed by the Contractor and other monies due the Contractor from NIA shall be answerable for such expense.
c) Not a Waiver - Neither an extension of time nor the acceptance of any part of the work called for in the Contract shall be deemed a waiver by the NIA of the right to abrogate the Contract for any of the causes expressly provided for in paragraph a). "Rescission of Contract" above.
The decision of NIA on the rescission of Contract is final and will not be subject to arbitration.