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Now that the CR is in place and funds will be made available fairly soon... is there a specific/official manner in which contracts will/should be notified to resume performance? Will there a be a letter/email from the CO or COR/QAP --- or could a phone call suffice? Or should contractors just resume performance based on the fact that CR has been signed?

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What was the "specific/official manner" by which you excused your contractors from performance during the shutdown? The answer to this question will drive the answer to your question.

For example, if a stop work order was issued under the contract clause at FAR 52.242-15, well, that clause will tell you how to un-do the stop work order (it's called canceling the stop work order). Some other manner for excusing/stopping/suspending performance? However it was done, that will also tell you how it should be undone.

(I really, really hope Government agencies didn't widely issue stop work orders on Oct. 1! But if they did, they will need to cancel them.)

If you didn't excuse your contractors from performance at the beginning of the shutdown, but your contractors took it upon themselves to stop work, the contracting officer can order the contractor to fulfill its obligations under the contract -- I would purposefully avoid using words such as authorized or ordered to resume work ( would specifically avoid using the word "resume"). CO or COR? Well, it doesn't make much difference who does it -- my concern is not accidentally or implicitly forgiving the non-performance in the process of getting the work underway again.

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Because a contracting office's blanket decision to terminate/suspend/stop work/and so forth all of its already-funded contracts solely because the Congress hadn't timely passed an annual appropriations bill would appear to me to be an improvident decision. The original poster's posting made me wonder if any contracting officers were similarly thinking that contracts were automatically turned off on Oct. 1 (an error, in my opinion), and now needed to be turned on on Oct. 17.

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Because a contracting office's blanket decision to terminate/suspend/stop work/and so forth all of its already-funded contracts solely because the Congress hadn't timely passed an annual appropriations bill would appear to me to be an improvident decision. The original poster's posting made me wonder if any contracting officers were similarly thinking that contracts were automatically turned off on Oct. 1 (an error, in my opinion), and now needed to be turned on on Oct. 17.

Concur. We stopped work on fully funded contracts because "government supervision was not available" even thoug the CO was available. Now the claims and equitable adjustments are coming in. A self inflicted wound.

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The type and circumstances applicable to each contract would determine the proper course of action. The important principle to understand and apply - for the next "opportunity" to face similar circumstances is very likely to occur early next year - is what is causing or will cause any delay. Then interact with the contractor appropriately.

Will it be lack of access to a building or installation to perform the contracts due to a government shut down? Lack of government personnel to provide services for? One should avoid citing a "stop work order" during communications with the contractor if at all possible.

But what about a construction contract on a site that the contractor can still access? Many FFP construction contracts don't specifically require the presence of government inspectors or quality insurance personnel during actual construction. In those cases, the contracts generally require contractor inspection and quality control, regardless of presence of government observation or lack thereof. However, many government agencies either don't trust construction contractors or want to "trust but verify" any work before it is covered up or before the risk of a significant amount of non-conforming work would occur. With the legal concept of "economic waste" now constraining the government's right to require tear out and rework, agencies and government offices may want to be present during critical construction activities. If the contract doesn't specifically call for government oversight presence of some sort and the contractor can otherwise access the site, government presence is strictly for the government benefit. It might be necessary then to suspend work for the government's convenience under the SOW clause.

However, if a delay is caused by lack of government fulfilment of its responsibilities under the contract due to a government shutdown, the cause might be attributable to the sovereign act, thus only involving entitlement to an excusable, non-compensable delay.

Thus, it is important to carefully assess the impacts and their causes before communicating any type of order or direction to the contractor. I suggest frank discussions between the parties prior to the next event that, based upon the history and performance of this "administration" and "Congress", is probable upon the expiration of this "truce". And KO's should understand their contracts and consult with competent legal advisors and also with their COR's and/or ACO's to assess impacts and causes.

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In addition to what Joel wrote, it is good to keep the concepts and clauses relative to cost reimbursement and T&M contracts in mind, even if we are talking about a sovereign act. Specifically, even if a contractor is delayed by a sovereign act, that act may have caused the contractor to incur increased costs that result in the estimated cost of the contract or the ceiling price being breached. In this case, pursuant to the Limitation of Cost clause, 52.232-20, and T&M payments clause 52.232-7, the contractor would be entitled to stop work unless the government adds more funding to the contract. Therefore, the contractor may be entitled to a schedule adjustment for an excusable delay and a price adjustment under these two clauses.

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In addition to what Joel wrote, it is good to keep the concepts and clauses relative to cost reimbursement and T&M contracts in mind, even if we are talking about a sovereign act. Specifically, even if a contractor is delayed by a sovereign act, that act may have caused the contractor to incur increased costs that result in the estimated cost of the contract or the ceiling price being breached. In this case, pursuant to the Limitation of Cost clause, 52.232-20, and T&M payments clause 52.232-7, the contractor would be entitled to stop work unless the government adds more funding to the contract. Therefore, the contractor may be entitled to a schedule adjustment for an excusable delay and a price adjustment under these two clauses.

Agree and good points! My comments are focused on FFP contracts.

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It looks like the essence of this all (stated by ji20874, Joel Hoffman, etc..) is that many contracting situations (and this is one of them) are complex, situation dependent, and chock full of grey areas. Whenever I get wind of blanket actions/directions pertaining to the deeply qualitative scenarios associated with my area of work (DoD Major Weapon Systems) my knee jerk reaction is to: (1) cringe; & (2) look for the litany of unintended complications that may/will arise. Often times, it turns out to be fairly manageable, but my point is: as a KO one cannot just auto-react. You really need to think about everything and if needed/available- talk to other KO's, supervisors, etc., especially when the stakes are high such as they have been as of late.

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Having spoken with leadership and legal, it has been determined there will need to be an assortment of actions required to re-engage (some contracted services more than others).

It appears the main theme (and obvious 'take-away') in your responses is simply: "...it depends..."

Thanks all...!!!

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  • 5 months later...

Is a stop work order after government shutdown the straw that breaks the camel's back? I have a FFP with incremental funding to provide a critical health and welfare service. Over the past 3 years, commitment of funds have been "just in time" on several occasions forcing contractor to either operate at risk or cause significant damage to operations. On all of these occasions, we operated at risk with funds being allocated just prior to our monthly invoice. The longest gap in payment of invoice was 6 months. Needless to say, this action/conflict has made us heros in the eyes of the customer and a pain in the ass of the Contracting Officer. The Government shutdown was the first stop work order received, Even though we had a stopwork order, the contractor team phoned into the government employees left on duty during shutdown to make certain systems did not fail and the most critical functions were being executed. The fact that the Government would regularly have trouble allocating funds was not apparent from the original solicitation. Since risk and reward are factors in any business proposal, it appears that the financial risk profile under this contract is drastically different from what anyone could interpret from the solicitation. In seeking equitable adjustment, however, only direct costs are allowed. Is there a mechanism for a contractor to cover their increased risk in executing any contract when it is unclear whether Congress can cooperate to get budget or the ability of a government agency to fund a critical function is perpetually in question?

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The difficulty of the Congress to get an appropriations bill passed in a timely manner is a well-known fact, apparent to all persons and all offerors and all bidders. If this fact produces risk, well, a prospective contractor can price for risk in its offer.

This may sound cold, but it's true. It's business. Even non-Government parties are sometimes late paying their bills.

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