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DELAYS

What is a delay?

A delay is a failure to perform a service or provide a product during the performance or delivery period established in the contract. A goal of government contracting is to acquire what is needed when it is needed. Every contract, therefore, includes a completion timeframe or delivery date. Delays occur when the delivery period has passed and what should have been done or delivered was not, or when there is an anticipated lag in delivery or performance and the contractor has advised the government that it will not perform the contract when the time for performance arrives.

Delays can cause serious problems. A delay could have devastating cost impact on both the government and the contractor. The government does not get the needed contract deliverables as scheduled and probably has to pay significantly more for the contract work than anticipated, due to price increases, idle labor or facilities, or other costly factors. If a military acquisition is delayed, national security could be compromised. The contractor could also incur idle labor and facilities expenses in addition to having to pay rising prices for labor and material. It is not uncommon for contracts to be terminated due to delays, and there may be severe consequences for both parties. For example, contractors could end up bankrupt after being terminated for delay.

What are the types of delays?

Delays can be either excusable or nonexcusable.

Excusable delays are beyond the control of, and without the fault or negligence of, a contractor or its subcontractors at any tier. A delay is excusable when the contractor can prove the following:

An event that caused a delay has occurred

The event was not its fault

The event was the type for which an excuse can be granted

The overall process of the work was delayed

The event, in fact, caused the delay of the work

The event was unforeseeable

The requested additional time is appropriate to compensate for lost time.

The contractor will not be liable for any excess costs if the failure to perform the contract arises from causes beyond the control and without the fault or negligence of the contractor. Excusable delays may also be caused by government performance. When the government's actions cause the contractor to stop performing, the contractor may be "excused" from complying with the schedule.

Examples of excusable delays include:

1. Delays for which neither the government nor the contractor is responsible:

Acts of God

Unusually severe weather

Strikes and labor disputes

Acts of the public enemy

Causes beyond the control of the subcontractors and suppliers.

2. Delays caused by actions taken by government personnel (e.g., the CO, the COR, the government inspector) involved with contract performance, such as:

Directing the contractor to stop work

Making a change to the contract

Performing other acts within the government's sovereign capacity.[1]

3. Delays caused by the government's failure to carry out one or more of the following responsibilities:

Making the performance site available when required

Processing approvals

Obtaining funding

Issuing changes in a timely manner

Responding to the contractor's requests

Furnishing government property when required

Inspecting or accepting delivered goods when required.

Nonexcusable delays occur when a contractor cannot justify a delay as being beyond its control.[2] Contractors are responsible for meeting the contract's delivery or performance schedule requirements and for all costs incurred in making up for the "lost time" associated with a non-excusable delay.

See Exhibit 7-1, Checklist: Is This Delay Excusable? at the end of this chapter for more information.

  • [1] As an example, in D.D. Montague Electrical Contractor, ASBCA 11837, 67-1 BCA, a contractor was awarded a six-day delay as a result of its inability to secure normally available railroad cars for delivery of needed supplies. The Board found that the unprecedented volume of government demands for railroad cars due to the ongoing Vietnam conflict was a sovereign act of the government.
  • [2] As an example, in E.Carron, Inc., ASBCA 19105, 76-1 BCA, the Board denied relief to a contractor who claimed that a copper shortage that caused copper prices to rise steeply caused the delay. The Board found that the contractor had postponed its procurement of copper supplies in the hope of buying later at lower prices, and that a "reasonably prudent businessman" would have obtained and stockpiled needed supplies.
 
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