Wednesday, October 4, 2023

SHUTDOWN TEMPORARILY AVERTED

SHUTDOWN AVERTED? WHAT HAS CHANGED?

Nothing. Only the delay in the event has changed. Everything we have said still applies. A shutdown is a constructive suspension redressable under the Changes clause (because of how the Suspension clause is worded). That means if a contractor keeps good records of the immediate impact and the impact on the unchanged or original work, the contractor should be able to recover on its claim notwithstanding the government's sovereign act defense.

Why is the shutdown a constructive suspension? Read the first sentence of the clause. It provides "suspend, delay or interrupt all or any part of the work." The only question is if and how that impacts the contractor. Constructive, like any other government act or omission, can be a constructive change.

Yes, try to get direction from your contracting officer. If the past is prologue, he will not respond. You are on your own. Seek expert advice, but above all, use your sound business judgment. Weigh the risks. If the government is foolhardy enough to terminate for default, the suspension as a sovereign act is an absolute defense to the termination.


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