Overview
FAR 42.1303 prescribes the policies and procedures for issuing stop-work orders in negotiated contracts when the Government needs to temporarily suspend performance pending a formal decision or program realignment. It serves as a tool to halt work while minimizing unnecessary costs when a supplemental agreement is not feasible.
Key Rules
- Applicability: May be used in negotiated fixed-price or cost-reimbursement contracts for supplies, R&D, or services, particularly when technical breakthroughs or program changes occur.
- Approval Authority: A stop-work order must be approved at a management level higher than the Contracting Officer (CO).
- Prohibitions: Stop-work orders cannot be used as a substitute for a termination notice if the Government has already decided to terminate the contract.
- Mandatory Content: The order must describe the work to be suspended and provide clear instructions regarding subcontracts, material orders, and cost-mitigation efforts.
- Resolution Requirements: Before the order expires, the CO must take one of three actions: cancel the order, terminate the contract, or extend the period via a supplemental agreement with the contractor's consent.
- Approval for Cancellation: Rescinding a stop-work order requires the same level of higher-level approval as the initial issuance.
Practical Implications
- Cost Management: Contractors are expected to immediately mitigate costs (e.g., halting subcontractor work) upon receipt, as failure to do so may jeopardize their ability to recover costs during a subsequent equitable adjustment.
- Administrative "Pause": It functions as a formal "pause button" that allows the Government to evaluate technical feasibility or budgetary shifts without the immediate finality of a termination for convenience.