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“SMALLTOFEDS’ By Ken Larson
“During government shutdowns or other circumstances where the government reserves the right to order a cease work, actions must be taken recognizing receipt of the stop work order and the relationship of the order to resumption of effort, funding constraints, contract terminations and associated business risk.”
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“The purpose of a stop work order is to immediately bring to a halt the effort on a contract and any further performance and related cost against that contract.
A stop work order is to be taken literally. Under a stop work order the government makes no guarantees it will take any further deliveries whatsoever, regardless of the contract type. A stop work order means just that. Stop work and stop incurring cost.
Upon receipt of a stop work order you have no guarantee of payment for any transaction date-stamped in your accounting system after the date of the stop work order (or the commencement date of a stop work order specified in a Contracting Officer’s Letter).
I suggest clients receiving these orders close the charge numbers applicable until the stop work order is lifted with an order to resume effort and immediately notify any effected suppliers and subcontractors to do the same.
Stop work orders are serious matters and require special handling to comply with government direction and to manage risk. This article discusses the principal options and equitable adjustment terms and conditions available to you if you undergo a stop work on a government contract.
Continuing effort on a contract after receipt of a stop work is high risk.
Astutely managing your options is a far better approach. “
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