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pricelesspearl

Is a Subcontractor bound by a Stop Work order issued to the Prime as a result of a Protest?

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Here is the background....We are the prospective Subcontractor on an award expected mid-June. Our prime anticipates a protest and subsequent stop work order, but has approached us about proceeding with work until the protest is decided.

Assuming we receive appropriate contractual assurances from our Prime that we will be paid, are there any consequences (for either us or the Prime) to what appears to be a violation of a stop work?

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The relationship between the Government and the prime contractor is governed by the contract clause at FAR 52.233-3, Protest After Award.

The relationship between the prime contractor and the subcontractor is governed by the subcontract agreement.

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I agree with ji20874 except that it may also depend upon what the subcontract is for and where the work will be performed. For instance, you might (probably) not be able to proceed with work on a government installation, work that involves government real or personal property, etc.

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You must be very careful.

You asked two questions -- the one in the title of this thread and the one in your post, which are not the same. You are not bound by a stop work order issued to the prime, but there might be consequences if you proceed, depending on the nature of your work. For instance, If you proceed, you might face liabilities that the prime might disclaim and for which your insurance might not provide coverage. There might be complications and consequences with respect to flowdown clauses from the prime contract. The government might reject any work you did during the stop work order when a government inspector was not at hand. Who knows?

I'd get legal advice about this if I were you. You might need more from the prime than a promise to pay you. You might need some sort of indemnification.

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Added thought.....

Preplanning per all the comments provided is a good thing. But I would ask the the prime to provide a copy of the Stop Work Order to me as the sub as well. It's wording could be critical to an opinion as well.

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I think you are definitely treading on dangerous waters here. As Vern pointed out, you have asked 2 separate questions. I would think that a well-written subcontract would include the suspension of work or stop work clauses as flow-down clauses from the Prime contract. Therefore, a Stop Work order written against the prime contract should flow-down and be applicable to you as a subcontractor.

As far as your "assurances that we will be paid", there are several levels to cover, most have already been mentioned:

1) payment for re-work if the work is not accepted by the government.

2) assured payment by the prime in the event the protest is sustained or (for any other reason) the prime contract is terminated by the government (i.e., will you get paid even if the prime doesn't get paid for your work).

3) indemnity/insurance coverage in the event something goes wrong during performance.

All that said, you haven't mentioned what type of contract it is. As Joel mentioned, if it involves work on "real property" or even performance on government property, you may be VERY restricted as to what you can do. In an extreme case, unless you were addressing a safety issue or somehow protecting government personnel or property, you could be deemed to be "trespassing" if you are on government property after issuance of a stop work.

Of course, everything depends on your specific circumstances, type of contract, what service/product are you offering, etc. But I would definitely say that you would be proceeding at much greater risk. Tread lightly, the waters are deep.

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Thanks for all the thoughtful responses. Some of the issues raised had occurred to me, but others had not. The latest intel we have is that a protest probably won't be filed, but better to be prepared than not.

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Maybe it's just me, but the replies so far seem to have missed the obvious. I would look to the written record of official correspondence between prime and sub. Is there an executed subcontract for the work? Has the prime issued the sub an NTP or otherwise turned the sub on in writing to begin performance? If so, the prime is responsible for paying the sub in accordance with the subcontract until such time as the prime tells the sub to stop work in accordance with the subcontract. If not, this is all moot.

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