What is one of the steps that I will need to take?
Issue a cure notice?
Insist that the contractor agree to a no-cost settlement
convince the customer that the contgractor should be allowed to finish the project since the government will sell the property when the base is closed and new housing will increase its value
Compensate the contractor for the houses that have been completed and for the preparations made on the houses in progress including a resonable profit
Base Realignment and Closure (BRAC) installations typically receive published directions detailing all actions required on a base leading up to closure. A senior official on the installation has or will be appointed to manage all BRAC actions.
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Recommendation: Obtain written direction signed by the senior official prior to taking any contractual BRAC action. Do not proceed with any direction to the contractor until you received such direction. I recommend that you not proceed based on a phone call.
Should the decision be made to discontinue performance on the construction contract, most likely you would use the authority of FAR 52.249-2, Alt 1, Termination for the Convenience of the Government (Fixed-Price) as direction to the contractor .
Based on the information provided there is no basis for a cure notice or other action.