Suspension of Work

[tjsmith57]

My CO provided me with a formal suspension of work notification (In accordance with FAR 52.242-14).  My CO is requesting a demobilization/suspension Plan as well as a suspension proposal. As this is not a TforC I am not quite sure what he is requesting and I am unable to find anything on how to submit a suspension proposal. Any thoughts/ideas/etc. will be greatly welcome

[ji20874]

Your entitlement to an adjustment in contract price because of the suspension is driven by the Suspension of Work clause at FAR 52.242-14.  So the first step is to carefully read the clause.

Normally, the contractor submits a proposal for an adjustment after the suspension has been lifted.  But if your suspension order is for a specific duration, I suppose you can submit a proposal now.  You are not entitled to any adjustment unless the suspension period is unreasonable -- but since the contracting officer asked for a proposal, I suppose the period is going to be unreasonable.

Your proposal will detail any increases in your cost of performance of the contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption.  Ask for anything and everything that might fit -- the contracting officer will either agree or negotiate.

If your contract is with the Defense Department or a component of the Defense Department and your proposal is over a certain amount, you might have to certify your request for equitable adjustment -- if this is the case, your contract will have a clause with the details.

[Guest Vern Edwards]

There is no governmentwide standard for such a proposal, but the agency you work with may have a policy.

The CO probably wants to know what you'll have to do to protect the site and the work, what shipments of materials you'll have to delay, what materials you'll have to store, what equipment you'll demobilize, what subcontractors you'll have to demobilize and reschedule, and what you'll do with the workers. He'll want an estimate of what you think it will cost you, both to demobilize and remobilize, and what the impact will be on the project schedule.

The best thing to do is talk to the CO about what, exactly, he or she wants from you.

Joel Hoffman may have some more info. He's the construction guy.

ji20874 mentioned an "equitable adjustment," which includes profit. You will not be entitled to any profit on any adjustment.

[tjsmith57]

thank you

 

[Don Mansfield]

1 hour ago, Vern Edwards said:

ji20874 mentioned an "equitable adjustment," which includes profit. You will not be entitled to any profit on any adjustment.

Vern,

Do you think the contractor would still be required to provide the REA certification that ji referred to if the adjustment exceeded the SAT?

[Retreadfed]

tj, one thing you should keep in mind is the possibility that you may be entitled to recover unabsorbed overhead as a result of the suspension.  I suggest that you read up on this topic.

[Guest Vern Edwards]

3 hours ago, Don Mansfield said:

Vern,

Do you think the contractor would still be required to provide the REA certification that ji referred to if the adjustment exceeded the SAT?

Would the law require it? Not if you read it literally. The DFARS says that a "request for equitable adjustment" must be certified. The statute says:

Quote

A request for equitable adjustment to contract terms or request for relief under Public Law 85–804 (50 U.S.C. 1431 et seq.) that exceeds the simplified acquisition threshold may not be paid unless a person authorized to certify the request on behalf of the contractor certifies...

The suspension of work clause does not provide for an "equitable adjustment," just an "adjustment." See Cibinic and Nash, "Delay Compensation Clauses: Inconsistencies and Inequities," The Nash & Cibinic Report (January 1987), pointing out that the Stop Work Order clause provides for an "equitable adjustment" while the Suspension of Work and Government Delay of Work clauses provide only for an "adjustment" and complaining that:

Quote

As can be seen... these clauses contain significant variations which can result in substantially different treatment for the same type of delay depending upon which clause is used. Since there is no reason for treating compensable delays differently for different types of work, the result is to reward the contractor whose contract contains the more favorable clause and penalize the contractor with the less favorable clause. This situation could be rectified through the adoption of a single modified compensable delay clause with uniform and fair features. 

However, the board and court decisions have not been clear about the distinction between an "adjustment" and an "equitable adjustment" and have not adhered to the language in the suspension of work clause. While agreeing that a contractor is not entitled to profit under the suspension of work clause, they have still referred to the adjustment as an "equitable adjustment" without profit. So it would not surprise me to learn that a CO had demanded the certification. If I were a contractor, I would not argue the point. I would certify if asked to do so. Why make an issue?

[joel hoffman]

Is the duration of the suspension of work for a definite period or is it for an indefinite/ unknown period?

Is the KO trying to pre-price the impact of the suspension?  If the suspension is for an indeterminate period, I don't think that you can pre-price "unabsorbed home office overhead" because you don't necessarily know before hand if you  can or can't divert your resources to other projects or contracts to  absorb such overhead. 

If the suspension is for a definite period, you would be lacking one of the prerequisites for recovery of unabsorbed home office overhead. The suspension generally must have been for an indeterminate period of time that precluded you from reassigning resources to other jobs, such as backlog of work or other new work. 

EDIT: as a minimum at this point, if the government has not stated a period of suspension (dumb) , you could put them on notice that you are reserving the right to claim unabsorbed home office overhead if you are unable to divert your resource to other work and if you are expected to remain ready to remobilize and resume work upon notice.

Recommend rEading up on the prerequisites to establish entitlement to UHOO. 

Im teaching class this week so don't have time to elaborate much.