Three Steps for Contractors Facing Stop Work and Termination Orders on Federal Grants and Contracts

By Dirk Haire

The Trump administration’s broad suspension and termination of federal grants and contracts have left many contractors wondering how to protect their rights and ensure they get paid.

If your federal contract or grant has been paused or terminated, follow these steps to safeguard your interests.

Determine the Status of Your Contract

First, confirm whether your contract has been paused (typically through a stop work order) or terminated for convenience by the government.

• If your contract is under a stop work order, it remains in effect. You are entitled to a time extension and compensation for any damages per FAR 52.242-15.
• If your contract has been terminated for convenience, it is no longer in effect. You are entitled to payment for all completed work and reasonable shutdown costs under FAR 52.249-2 and related clauses.

File a Claim if Payment Is Delayed

Even though these clauses entitle you to compensation, securing payment isn't always automatic. If the government does not promptly pay, you must file a Contract Disputes Act (CDA) claim with the Contracting Officer.

The Contracting Officer has 60 days to approve or deny the claim.

For claims over $100,000 the officer may take additional “reasonable” time to decide.

If your claim is denied or unresolved after the time limits stated above, you can file a complaint:

• Within 90 days at the relevant Board of Contract Appeals (BCA)
• Within one year at the Court of Federal Claims (COFC).

The choice of forum is up to you.

Expedite Your Path to Payment

Given the high-profile nature of these contract suspensions and the self-executing nature of payment clauses, many contractors may be able to fast-track their cases through expedited procedures at the BCAs and the COFC.

Acting quickly is key. The volume of cases is expected to create backlogs, and the number of judges handling these disputes is not increasing. Contractors who file early will likely move through the system faster—and get paid sooner.

Dirk D. Haire?has a national construction and government contracts practice focused on bid protests and claims litigation relating to federal construction. He and his team have filed hundreds of CDA claims.?If you are facing a contract suspension or termination,?contact Dirk at 202.461.3114 or?[email protected].

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the author(s) and not necessarily this law firm or its clients. Prior results do not guarantee a similar outcome.