Stop-work orders are a commonly used legal device intended to prevent a breach of contract. Contractors who engage in public work contracts with the government should be keenly aware of how stop-work orders can impact their progress on a project. Generally, a stop-work order is issued to suspend construction until an agreement has been reached between the contracted parties, but the reasons they are deployed vary greatly depending on the type of project being worked on, the relationship between the contracted parties, and other factors.
In this article, a construction attorney in Brentwood, TN, from Cotney Construction Law will provide a detailed overview of stop-work orders for federal contracts. If you have been issued a stop-work order, consult a construction law attorney in Brentwood, TN, with years of experience defending the industry against breach of contract claims.
How the Federal Acquisition Regulation Affects Contractors
The Federal Acquisition Regulation (FAR) subpart 42.1303 stipulates that “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.”
What does this mean for contractors? For starters, it means that a stop-work order can be issued for a variety of reasons. While a breach of contract is arguably the most common reason for such issuance, it’s by no means the only trigger for a stop-work order. That said, when you are issued a stop-work order, you should immediately suspend work and any other actions that would incur additional expenses for your firm.
One of the most commonly debated issues related to stop-work orders is how such an order affects project duration, and in turn, how the affect on duration affects the cost of the project for the contractor. In some cases, a stop-work order may lead to a contract termination, while in others, it could simply pause the project. Due to the complexity of stop-work orders and the complications that can arise in their wake, it’s imperative that you consult a construction law attorney in Brentwood, TN, upon the issuance of a stop-work order.
Breaking Down Stop-Work Orders
All stop-work orders should include clear descriptions of any activities that are to be suspended; instructions for what the contractor should do regarding pending material orders, permits, services, and scope of work; and suggestions for handling contracts established with subcontractors. The contractor and owner should discuss the stop-work order in full detail prior to the expiration of the order. This way, important considerations, including how to terminate the contract, how to modify or cancel the stop-work order, and what new agreements must be in place to extend the contract, can be determined with both full transparency.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.