A FAR stop-work order is a written directive from the Contracting Officer under FAR 52.242-15 telling you to halt all or part of your contract work for up to 90 days. Once you receive one, you have to stop performance immediately, set up separate accounting to capture every dollar the stoppage costs you, and assert your right to an equitable adjustment in writing within 30 days after the stoppage ends. How you handle the first hours and the 30 days after work resumes usually determines whether you recover your losses.
What the Order Is and What It Can Do
The authority sits in a clause written directly into your contract. FAR 52.242-15 lets the government order you, in writing, to stop all or any part of the work at any time, for up to 90 days after delivery of the order. Because the clause is a standard contract term, compliance is not optional once the order arrives.
Stop-work orders show up in negotiated fixed-price or cost-reimbursement contracts for supplies, services, or research and development. Typical triggers are shifts in program direction, technological developments that change requirements, or funding gaps that make continued performance impractical. The government is not supposed to use a stop-work order as a substitute for a termination notice when it has already decided to end the contract.
A properly written order should tell you which work is suspended, whether to stop placing orders for materials or services, what to do with your subcontracts, and how to keep costs down during the stoppage. If the order is vague, ask the Contracting Officer for clarification in writing right away. Don’t wait for a perfect order before complying. Stop the work first, then sort out the details. Your written request for clarification also becomes part of the record if the scope of the stoppage is later disputed.
What to Do the Day You Receive It
Your first obligation is straightforward: stop the work covered by the order and take all reasonable steps to keep costs from piling up. FAR 52.242-15 makes cost minimization an affirmative duty, not a suggestion.
Several things need to happen fast.
- Halt performance on the affected work, and direct subcontractors and suppliers to do the same. If the order covers only part of the contract, keep performing the unaffected work.
- Set up dedicated accounting codes on day one. Every dollar attributable to the stoppage has to be segregated from normal contract costs. This is the foundation of your recovery claim, and commingled costs are one of the fastest ways to weaken it.
- Secure any government-furnished equipment, materials, and partially completed work so nothing deteriorates while performance is paused.
- Start a contemporaneous log of actions taken, costs incurred, and communications with the Contracting Officer. Reconstructed records are never as persuasive as real-time ones.
The 90-Day Clock
A stop-work order has a built-in expiration. The Contracting Officer can hold work for up to 90 days from the date the order is delivered. If the government needs more time, you and the Contracting Officer have to agree to an extension in writing through a supplemental agreement. The government cannot unilaterally extend the stoppage past 90 days.
Before the 90 days (or any agreed extension) run out, the Contracting Officer must cancel the order, terminate the affected work, or negotiate a consensual extension. If none of that happens, the order expires by its own terms and you resume work as if it had been canceled.
How the Order Ends
Every stop-work order resolves one of two ways.
If the Contracting Officer cancels the order, you resume work immediately, and the contract is modified to incorporate whatever equitable adjustment you and the Contracting Officer agree on for increased costs and schedule impacts. This is usually the outcome contractors want because the contract continues.
If the order is not canceled, the affected work has to be terminated, either for the government’s convenience or for default. In a convenience termination, the stop-work costs get folded into your overall termination settlement. In a default termination, you can still recover reasonable costs caused by the stoppage itself through an equitable adjustment, although the default carries separate consequences for future contracting.
Getting Paid: The Equitable Adjustment
When the order is canceled or expires, you have the right to an equitable adjustment if the stoppage increased your cost of performance or extended the time you need. The adjustment is meant to put you back in the financial position you would have been in had the order never issued, and it can move the contract price, the delivery schedule, or both. For cost-reimbursement contracts, an alternate version of the clause adjusts the estimated cost, the fee, or both instead of a fixed price.
The 30-Day Assertion Deadline
You must assert your right to an equitable adjustment in writing within 30 days after the stoppage period ends. This is not a deadline to submit a fully documented claim with every receipt attached. It is a deadline to put the Contracting Officer on notice that you intend to seek an adjustment. Missing this window can forfeit your right to recovery, though the Contracting Officer has discretion to consider a late assertion submitted before final payment if the circumstances warrant it.
What You Can Recover
Recoverable costs generally fall into a few categories:
- Idle labor and equipment. Wages and lease costs for resources that sat unused because the order kept them from working.
- Demobilization and remobilization. Standing down operations and later ramping back up.
- Material storage and preservation. Warehousing, climate control, and other expenses needed to protect materials during the stoppage.
- Unabsorbed overhead. Home office overhead that your contract would normally have absorbed through ongoing billings but couldn’t because performance was suspended. This category often represents the largest portion of a stop-work claim.
- Subcontractor impacts. Increased costs flowing up from subcontractors who were affected by the stoppage.
Documentation the Contracting Officer Will Want
Your Request for Equitable Adjustment needs to link every dollar claimed to the stop-work order. Expect to provide itemized costs with supporting invoices or payroll records, an explanation of why each expense was necessary, a schedule analysis showing how the stoppage affected your delivery timeline, and calculations for any profit or fee adjustment. Vague summaries or round-number estimates invite pushback. The segregated cost codes you set up on day one are what make this documentation possible.
Calculating Unabsorbed Overhead
Unabsorbed overhead is the hardest category to quantify, and it is where most disputes arise. The standard method in federal contracting is the Eichleay formula, named after a Board of Contract Appeals decision that established the approach decades ago. It works in three steps.
- Divide your billings on the delayed contract by your total billings across all contracts during the same period, then multiply by your total home office overhead for that period. The result is the overhead allocable to the delayed contract.
- Divide that allocable overhead by your total days of contract performance to get a daily overhead rate.
- Multiply the daily rate by the number of days the stop-work order delayed your performance. That is your unabsorbed overhead claim.
To use Eichleay, you generally need to show that the government caused a suspension of uncertain duration and that you were on standby, meaning you had to keep your resources available to resume work on short notice rather than being free to redeploy them. A stop-work order usually satisfies both because it is a government-directed suspension and you are expected to resume immediately upon cancellation. If you picked up significant replacement work during the stoppage, the government will argue your overhead was being absorbed elsewhere, which weakens the claim.
When to Escalate to a Formal Claim
A Request for Equitable Adjustment is a negotiation tool. You submit it, the Contracting Officer reviews it, and ideally you reach an agreement that gets written into a contract modification. If negotiations stall or the request is denied, you can convert it into a formal claim under the Contract Disputes Act.
A CDA claim is a written demand seeking payment of a specific dollar amount as a matter of right, and the shift has real consequences. Once a claim is submitted, the Contracting Officer must issue a final decision. For claims of $100,000 or less, the decision has to come within 60 days of a written request for a decision. For claims over $100,000, the Contracting Officer has 60 days to either decide or tell you when a decision will come. If the Contracting Officer misses those timeframes, the silence is treated as a denial and you can appeal.
Any claim above $100,000 requires a formal certification stating that the claim is made in good faith, the supporting data are accurate and complete, the amount accurately reflects what you believe the government owes, and the certifier is authorized to act on your behalf. The aggregate of all increased and decreased costs determines whether you cross the $100,000 threshold.
There is also a cost consequence. The expense of preparing an REA is generally an allowable contract cost. The expense of pursuing a formal CDA claim through litigation is not. That difference is one reason most contractors try to settle at the REA stage before escalating.
Appeal Deadlines
If the Contracting Officer issues a final decision denying your claim, you have two paths. Appeal to your agency’s Board of Contract Appeals within 90 days of receiving the decision, or file suit in the U.S. Court of Federal Claims within 12 months. The Contracting Officer’s decision becomes final if you do neither.
Don’t Confuse This with Suspension of Work
The Stop-Work Order clause (FAR 52.242-15) is not the same as the Suspension of Work clause (FAR 52.242-14), and the differences matter.
Suspension of Work applies to fixed-price construction and architect-engineer contracts. It lets the Contracting Officer suspend, delay, or interrupt work for the government’s convenience, and it also covers unreasonable delays caused by the government’s own acts or failures to act. Cost adjustments under that clause exclude profit. The Stop-Work Order clause has no equivalent profit exclusion.
Notice works differently too. Under Suspension of Work, the contractor has to notify the Contracting Officer in writing of the act or failure causing the delay, and costs incurred more than 20 days before that written notice are not recoverable. There is also no fixed 90-day cap on the suspension itself. Which clause your contract contains dictates which rules govern your recovery, so check before you write anything to the Contracting Officer.