JKB SOLUTIONS AND SERVICES v. US
amendment could not remedy an error arising out of a
poorly drafted, critical contract provision).
Similarly, the government may not resort to the doc-
trine of constructive termination for convenience if it
“evinced bad faith or a clear abuse of discretion in its ac-
tions.” See Kalvar Corp. v. United States, 543 F.2d 1298,
1300–01 (Ct. Cl. 1976). The government may also not use
the doctrine of constructive termination for convenience to
terminate a contract retroactively so as to change its obli-
gations under a fully performed contract. Maxima,
847 F.2d at 1553–54, 1557 (holding that the government
could not recover its payment of the unused contractual
minimum a year after contract completion under the the-
ory that its failure to order the contractual minimum con-
stituted a constructive termination for convenience); see
also, e.g., Ace-Federal Reps., Inc. v. Barram, 226 F.3d 1329,
1333 (Fed. Cir. 2000); Krygoski Constr. Co. v. United
States, 94 F.3d 1537, 1542 n.2 (Fed. Cir. 1996).
The government acts in bad faith when, for example, it
“contracts with a party knowing full well that it will not
honor the contract.” Caldwell, 55 F.3d at 1582; accord
Salsbury Indus. v. United States, 905 F.2d 1518, 1521
(Fed. Cir. 1990). In Torncello v. United States, 681 F.2d
756 (Ct. Cl. 1982) (en banc), the government entered into a
requirements contract with Torncello, knowing that there
was a cheaper bidder, and proceeded to use the cheaper
bidder’s services for items covered by its contract with
Torncello. See id. at 758 (plurality opinion); Salsbury,
905 F.2d at 1521 (discussing Torncello). The Court of
Claims held that there cannot be a constructive termina-
tion for convenience in these circumstances. See id. at 773
(Friedman, J., concurring); Salsbury, 905 F.2d at 1521
(“The [Torncello] court, not surprisingly, held that the gov-
ernment could not avoid the consequences of ignoring its
promise to that contractor by hiding behind the conven-
ience termination clause.”); Krygoski, 94 F.3d at 1541–42
(“The Navy [in Torncello] used the termination for
Case: 21-1257 Document: 35 Page: 7 Filed: 11/17/2021