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STOP WORK ORDERS
What is a stop work order? When are these orders issued by the government?
A stop work order is a written or oral order to stop work under a contract. If an oral stop work order is given to the contractor, it is binding only when confirmed in writing by the CO and signed by the contractor. Stop work orders may be used, when appropriate, in any negotiated fixed-price or cost-reimbursement supply, research and development, or service contract if 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, a stop work order 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. Stop work orders are not to be used in place of a termination notice after a decision to terminate has been made.
In accordance with FAR clause 52.242-15, Stop Work Order, the government may issue a stop work order lasting a maximum of 90 days without the contractor's agreement. However, if the government issues a stop work order lasting more than 90 days or issues an extension beyond the original 90 days on an existing stop work order, both the government and the contractor must agree on the order.
What is the COR's role in issuing a stop work order?
The COR is often the individual responsible for advising the CO of the need to issue a stop work order. This duty is completed successfully when
Can identify and determine the need for a stop work order
Monitors the administration of the stop work order to avoid unnecessary costs and to minimize government risk.
What tasks will the COR need to perform in order for a stop work order to be issued?
For a stop work order to be issued, the COR should:
1. Identify the potential conditions under which a stop work order might be issued
2. Recommend a work stoppage to the CO
3. Assist the CO in issuing the stop work order.
Identifying Potential Conditions Under Which a Stop Work Order Might Be Issued
What are the potential conditions under which a stop work order might be issued?
The COR should be able to identify conditions under which a stop work order might be issued. The government or the contractor may request stop work orders. Circumstances in which a stop work order might be requested by the government include the following:
The government is unable to furnish property or services per the contract schedule
A change to the contract has been received and a modification cannot be issued
More time is needed for the government to consider contract modifications that would substantially change the end product.
Circumstances in which the contractor might request a stop work order include the following:
A proposal has been submitted to materially change the technical requirement of the contract (e.g., a value engineering change)
Conditions at a government work site make the performance of work unsafe, and these conditions are not immediately correctable.
Recommending a work stoppage to the co
May the COR issue instructions to stop work?
CORs should avoid issuing instructions, oral or written, to a contractor to start or stop work. The CO is the official responsible for issuing stop work orders after receiving approval of the order from one level above him or her.
What should the COR do if he or she thinks work should be stopped?
To be able to recommend the most cost-effective or practical solution to the problem in terms of the program requirement, the COR should complete the following steps:
1. Determine the impact of a work stoppage
2. Document a recommendation.
1. Determining the impact of a work stoppage
Work stoppages should occur only after the government has made a determination of the impact they will have. Factors the COR should consider when making this determination might include:
The estimated cost of delaying the work
Any potential effects on labor (e.g., loss of skilled labor, loss of efficiency)
The potential damage to perishable goods
The estimated effect on overhead (e.g., inventory, indirect labor)
Any adverse effects of the potential delay on contract completion.
The COR should determine if there is a stop work order clause in the contract that allows the government to stop work under the contract. Permitting the issuance of stop work orders under a contract does not give the government an unrestrained hand. This provision gives the government the right to impose a delay on the contractor, but the government cannot impose an overly long, unreasonable delay. See the discussion regarding the 90-day limit imposed by FAR clause 52.242-15 under Question 376. In measuring the reasonableness of the delay, the courts and boards will consider the length of the delay balanced against the impact of the delay on the contractor. How long a reasonable period of time is for the government to complete an action under the contract depends entirely upon the circumstances of the particular case.
2. Documenting a recommendation
The COR may be asked to prepare documentation for the stop work order. This documentation may include the following information:
A description of the work to be suspended
Guidance on actions to be taken on any subcontracts
Effective date and time of work stoppage
The timeframe to resume work
The contractor's right to file a claim
The reason and purpose for, and benefits of, stopping the work
Any costs associated with the work stoppage
Alternatives to stopping the work (if any exist)
Reasoning behind the determination of the length of time for which work will be stopped.
Work stoppage information may be transmitted to the contractor over the telephone, but the COR should immediately follow up this notification in writing.
Assisting the co in Issuing the stop work order
When the CO decides to authorize a stop work order, what is the COR's role?
When a recommendation for a work stoppage is made, the CO may authorize the issuance of a stop work order and request that the COR:
1. Select the method for issuing the stop work order
2. Assist in discussions with the contractor
3. Recommend a date for the resumption of work.
1. Selecting the method for issuing the stop work order There are two methods for issuing stop work orders:
Oral stop work orders. Oral orders are issued in urgent situations for example, when safety violations have occurred or a life-threatening situation has arisen. A CO will issue oral orders only when the situation precludes waiting for the issuance of a written one, and a timeframe for work stoppage needs to be conveyed as quickly as possible. Oral orders should be followed up and confirmed in writing as soon as possible.
Written stop work orders. Written orders include all necessary details related to the stop work order (see Documenting a Recommendation under Question 381) and the requirements for the contractor's compliance. Written orders can be presented to the contractor:
- In person
- Through a third-party messenger.
Whatever method is used to deliver the stop work order, the signature of a contractor employee acknowledging receipt of the stop work order must be obtained for the order to become effective. The signature ensures that the government is released from the responsibility for payment of any unnecessary costs incurred for contract work as a result of the stoppage.
The COR may be asked to prepare the written stop work order for the CO's consideration.
2. Assisting in discussions with the contractor
The COR will assist the CO in discussing the stop work order with the contractor. The following topics may be covered in these discussions:
Reasons for issuing the stop work order
The length of the work stoppage being imposed by the government and the probability of revisions of that time frame, depending on circumstances
The impact of different time frames for the work stoppage
Estimates of labor costs and other costs of the expected work stoppage
Alternatives for continuing the stop work order (circumstances that would cause the stop work order to continue)
Acceptance of the stop work order by the contractor.
Daily communication, preferably in writing, is important because costs associated with the work stoppage compound daily. The CO, COR, and the government office most affected by the stop work order should be involved in any communication with the contractor.
3. Recommending a date for the resumption of work
Because work stoppage may result in an increase in the cost of any part of contract performance or may prolong the performance period, the COR should recommend the most cost-effective or practical solution to the problem. Stop work orders are undesirable under any contract and should be discontinued as quickly as possible.
The contractor will resume work:
When written notice is received from the CO to resume work and the stop work order has not yet expired
When the stop work order is cancelled
When the stop work order expires and the contractor receives written notice to begin working again
When the stop work order expires and no official government action is taken.
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