Holloway Consulting is often retained as the Construction Claims Expert in the identification and preparation of, and in defense of, construction claims under both public and private sector contracts. This page provides an overview of some of Holloway Consulting’s observations on Construction Claims involving the Owner’s Suspension of the Work.
CONSTRUCTION CLAIMS
SUSPENSION OF THE WORK
Suspension of the Work is an owner’s directive that work be stopped on part or the whole contract. The duration must be of reasonable length and the suspension must be of valid cause. Fifteen days for analysis of an unexpected and major change to the project satisfied the tests of length and cause; a 30-day family vacation fails both tests and breach of contract will be the likely result.
The structure of compensation in Construction Claims for Suspension of the Work is reasonably well-defined in the general provisions of federal government construction contracts: actual costs for labor and material (contractor must lower these costs during suspension to a minimum survival level), equipment ownership expense at 50 percent of national AGC rates, and no profit.
Non-federal contracts – governmental and private – frequently cite the owner’s right to suspend the work but often fail to establish compensation guidelines. In this circumstance, the quantum element of a Suspension of the work claim is generally calculated as a fair and reasonable value including profit.
Contractor’s Rights
The right of suspension is unilateral; the contractor cannot initiate a work suspension. However, the contractor can halt, stop, curtail or alter his operations in the face of massive change on the premise of damage mitigation.
It has been Holloway Consulting’s experience that a contractor’s stoppage of the work is often met with a default notice – notice to cure – and contract termination. Holloway was a member of the general contractor’s staff on the Ritz-Carlton Marina Del Rey, wherein the GC was terminated for stoppage of work due to massive change order volumes. The GC subsequently prevailed in arbitration.
Home Office Overhead Claims
The Government or Owner’s total Suspension of the Work is also one of the prerequisites to recovery under Home Office Overhead Claims.
The Holloway Consulting Group, LLC
Construction Claims Experts
12081 W. Alameda Pkwy., #450
Lakewood, CO 80228-2701
Denver Phone: (303) 984-1941
International Toll Free: (888) 545-0666
Fax: (303) 716-0432
Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
Web: hcgexperts.com
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