CONSTRUCTIVE SUSPENSION (SUSPENSION OUTSIDE OF AN EXPRESS ORDER)

In the federal procurement arena, there is a concept known as “constructive suspension.” Constructive suspension, while known in the federal arena, should reasonably apply to all projects when work is stopped outside of an express order to stop the work based on the law below.  An unreasonable suspension is an unreasonable suspension and an express order to stop the work does not negate the effects of what really amounts to a suspension.

Constructive suspension occurs when work is stopped absent an express order by the contracting officer and the government is found to be responsible for the work stoppage.”  P.R. Burke Corp. v. U.S., 277 F.3d 1346, 1359 (Fed. Cir. 2002).  The government delay must be unreasonable to support a constructive acceleration claim. Id.

To demonstrate such a constructive suspension of work, the contractor must show that the delay (1) was for an ‘unreasonable length of time,’ (2) was proximately caused by the government’s actions, and (3) resulted in some injury to the contractor.Fireman’s Fund Ins. Co. v. U.S., 2001 WL 36415627, *6 (Fed.Cl. 2001) (citation omitted). “Relative to proving that the delay was directly caused by the government, the contractor must concomitantly show that it was not delayed by any concurrent cause that would have independently generated the delay during the same time period even if it does not predominate over the government’s action as the cause of the delay.Beauchamp Const. Co. v. U.S., 14 Cl.Ct. 430, 437 (Cl.Ct. 1988).

A constructive suspension has the same effect and consequences as an actual suspension, and relief should be granted as if an actual suspension order had been issued.”  K-Con Bldg. Systems, Inc. v. U.S., 100 Fed.Cl. 8, 27 (Fed.Cl. 2011) (quotation omitted).

Beauchamp Construction illustrates a constructive suspension situation.  Here, a prime contractor was awarded a fixed price contract to construct several federal buildings in Miami within 365 days.  The contract included representations of soil conditions. The contractor received a notice to proceed.  Shortly after it proceeded, the contractor discovered muck which prevented the contractor’s from installing foundations (footings) in two of the buildings.  This muck was a differing site condition. The contractor notified the government, but the government did not expressly issue a stop work order. The contractor did some other work that it could do since there was no stop work order. Thereafter, the government gave the contractor new specifications and asked for a cost proposal for demucking. The contractor submitted its cost proposal which the government did not approve until about two months after the contractor submitted the cost proposal and three months after furnishing notification of the muck. About two months later, the contractor addressed the differing site condition (muck) and submitted a claim to the government for 137 days of delay along with its delay damages.  The government agreed to 54 days but disputed 83 days.  The court found that a constructive suspension did apply to justify the contractor’s entitlement to the disputed 83 days of delay:

In the case at bar, the parties agree that the original specifications did not include demucking and that the specifications had to be changed to include this additional work. The parties also agree that certain aspects of the construction of buildings 10c and 12 were postponed until the demucking was completed. This postponement of progress under the original contract would necessarily include the time prior to authorization of the demucking work since plaintiff could not proceed until it received the authorization to remove the differing site condition. The court finds, therefore, that on the record before it there is specific evidence of interference with the progress in a part of the contract performance caused by the admitted differing site condition and the resulting and subsequent 83–day delay on defendant’s [the government] part in issuing Modification No. 4. The court, on these facts, can and does reasonably infer the existence of compensable delay damages to [the contractor] as a result of the unjustified interruption of performance.

Beauchamp Construction, supra, at 439.

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

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