Government Contracting Database

The Suspension of Work clause, (FAR 52.242-14), provides that if the contracting officer orders the suspension, delay or interruption of the contract for an unreasonable period of time, an adjustment will be made. This standard contract clause is intended to allow the contractor to be compensated for delays or suspensions, without profit, provided the contractor is not the cause. See Toombs & Co. v. United States, 4 Cl. Ct. 535, 549 (1984).

In B.D. Collins Construction Co., ASBCA No. 42131, 91-2 BCA ¶ 24,021, the Board held that a contractor could recover the costs resulting from a one month delay after the government issued a suspension due to a toxic waste spill. The government argued the contractor was only entitled to a three-week recovery because the government had issued a verbal order to proceed. The contractor refused to start work until it received a written order to proceed. The Board upheld the contractor’s right to recovery noting that the contract required a written notice to proceed. If the contractor had proceeded after the oral instruction, it would have done so at its own risk.

An instance of suspension followed by termination resulted in a determination of entitlement of recovery of costs for standby in M.E. Brown, ASBCA No. 40043, 91-1 BCA ¶ 23,293. Brown was a sole proprietor who bid on a contract to renovate an air-conditioned parachute drying tower at the Patrick Air Force Base. Inspection revealed the presence of asbestos and the owner’s engineers informed the contractor he was on standby until a change order modified the contract even though there had never been an order to proceed. The contractor continually spoke with the contracting officer concerning the status of the contract and was told to wait while the situation was considered. The contractor notified the government that his costs and claims were continuing to accrue. Finally, on December 10, 1988, the government issued a termination notice. Although the only issue before that Board was that of entitlement, the Board concluded that the contractor was entitled to recover the following if they could be proved:

• the costs of visits to the work site and the government offices gathering information concerning the contract
• costs of performance due to the suspension including an amount of unabsorbed overhead attributed to the government’s delay
• the costs incurred as a result of idle hours
• the costs of idle equipment

The Board also noted that the fact “that an actual [written] suspension order had not been issued was immaterial since a constructive suspension has the same effect and consequences as an actual suspension order, and relief should be granted as if an actual suspension order had been issued.” Brown at 116,816.

Updated: July 6, 2018