Description

Are you a small or mid-sized federal contractor facing the disruption of a government shutdown?. Federal agencies are issuing widespread stop-work and suspension orders, but how you respond now determines your financial recovery later. This episode provides the essential playbook for surviving a work interruption and protecting your business.

We dive deep into the legal framework of contract pauses:

• Stop-Work Orders (FAR 52.242-15): Typically used for supply, service, or R&D negotiated contracts, these halt performance for up to 90 days and may allow for profit recovery on delayed and resumed work.
• Suspensions of Work (FAR 52.242-14): Mandatory in fixed-price construction and architect-engineer contracts, these allow unilateral suspension for an unlimited period but explicitly exclude profit recovery on increased costs.

Learn the critical immediate steps required to maintain compliance and preserve your rights:

• Comply and Cease Work: Stop all work as directed immediately, as unauthorized work during a stoppage is generally not reimbursable.
• Notify Downstream: You, the prime contractor, must promptly flow down stop-work instructions in writing to all affected subcontractors and vendors.
• Document and Secure: Secure government property, facilities, and sensitive data under your care. Crucially, set up separate charge codes to capture all costs resulting from the work stoppage (such as standby costs or demobilization) for later recovery.
• Communicate Strategically: Always seek government direction and clarifications in writing, documenting all attempts to communicate with the Contracting Officer (CO), even if they are furloughed.

We also explore proactive risk management strategies drawn from the 2013 and 2018–2019 shutdowns: how to handle workforce management (furloughs versus reassignments), securing financial liquidity (bridge financing), and mitigating damages.

Finally, we guide you through the process of preserving your rights upon work resumption: securing schedule extensions for excusable delays and preparing a meticulous Request for Equitable Adjustment (REA). Remember, you must assert your right to an adjustment within 30 days after a stop-work order ends to protect your claim.

Don’t miss this essential guidance to ensure your business remains solvent, maintains capability, and is positioned for a swift and compliant restart.