Monday, January 8, 2018

Suspension of Work, Stop-Work Orders, and Government Caused Delays

Situations sometimes occur during contract performance where work is suspended for one reason or another. There are several categories of work suspension identified in the FAR (Federal Acquisition Regulations).

Suspension of work - A suspension of work - typically under a construction or architect-engineer contract may be ordered by the contracting officer for a reasonable period of time. If the suspension is unreasonable, the contract can submit a claim for increases in the cost of performance. Increased profit is not allowed.

Stop-work orders - Stop-work orders may be used in any negotiated fixed-price or cost-reimbursement supply, research and development or service contract is work stoppage may be required for reasons such as advancement in the state-of-the art, production or engineering breakthroughs, or realignment of programs.

Generally, stop-work orders will be issued only if it is advisable to suspend work pending a decision by the Government and a supplemental agreement providing for the suspension is not feasible. Often times, stop-work orders lead to contract terminations (e.g. termination for convenience or less likely, termination for default).

Government delay of work - FAR 52.242-17 provides for the administrative settlement of contractor claims that arise from delays and interruptions in the contract work caused by the acts or failures to act, of the contracting officer. It is kind of a catchall provision when there is no other explicit contract provision for an equitable adjustment when the "changes" clause applies. This doesn't apply if the contract otherwise specifically provides for an equitable adjustment.

The main point to keep in mind is that regardless of the reason or the vehicle used to order a delay or cause a delay, contractors are entitled to some kind of equitable adjustment.

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