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COVID-19 Contract Claims and Delays

Government contractors may be facing unprecedented shutdowns, work stoppages, and delays related COVID-19 pandemic.  The virus' far reaching impact is likely creating situations where contractors are have difficulty performing and delivering on-time and according to contractual requirements.  Contractor's facing these difficulties should begin by reviewing their contracts for specific contract clauses related to delays and work stoppages.  Some of the applicable clauses are highlighted below.

Cost-plus contracts for good and services, including construction and R&D contracts, should have the FAR clause 52.249-14.  The Excusable Delay clause should provide relief for COVID-19 related delays and shutdowns.  The clause states that:

  • The Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor.

Fixed price contracts may include the FAR clause 52.242-17.  The Government Delay of Work clause states that:

  • If the performance of all or any part of the work of this contract is delayed or interrupted (1) by an act of the Contracting Officer in the administration of this contract that is not expressly or impliedly authorized by this contract…an adjustment (excluding profit) shall be made for any increase in the cost of performance of this contract caused by the delay or interruption and the contract shall be modified in writing accordingly. Adjustment shall also be made in the delivery or performance dates and any other contractual term or condition affected by the delay or interruption.

 Fixed price construction contracts may include the FAR clause 52.242-14.  The Suspension of Work clause states that:

  1. The Contracting Officer may order the Contractor, in writing, to suspend, delay, or interrupt all or any part of the work of this contract for the period of time that the Contracting Officer determines appropriate for the convenience of the Government.
  2. If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted by an act of the Contracting Officer in the administration of this contract…an adjustment shall be made for any increase in the cost of performance of this contract (excluding profit) necessarily caused by the unreasonable suspension, delay, or interruption, and the contract modified in writing accordingly.

Contractors should be prepared to document the facts and circumstances of any delay or shutdowns related to the virus or mandated quarantine restrictions upon request from a Contracting Officer.

Further, FAR 52.243 covers Contracting Officer and Contractor responsibilities related to changes in fixed price contracts (52.243-1), cost-reimbursement contracts (52.243-2), and time-and-materials or labor hour contracts (52.243-3).   In general, these clauses also outline the rights for submitting requests for equitable adjustments related to estimated contract costs, completion schedules, and other contract terms.

Contractors should closely monitor and track all costs incurred as a result of any COVID-19 related delays.  Additionally, to ensure successful claims for equitable adjustment, particular care should be given to mitigating costs incurred as a result of any delay or suspension of work.

We are continuing to monitor for specific guidance related to COVID-19 claims for equitable adjustments.  As this situation is fluid, and likely to change as a result of congressional legislation, please bookmark our COVID-19 Resource page for updates.  Additionally, WEC's Government Contracting Advisory Team is ready to assist with preparation of requests for equitable adjustment claims.