Stop work orders

A stop-work order is a written order from a contracting authority that requires a contractor to stop all or part of the work under a contract, normally for a specified period. It is a tool of defence and government contracting, used when the purchaser needs performance paused without ending the contract.

The NATO Communications and Information Agency (NCIA) includes a stop-work-order clause in its Basic Ordering Agreement and its general contract terms. The clause lets the Purchaser's contracting authority suspend all or part of the contracted work by written order, and it obliges the contractor to comply and to keep costs down while work is halted.

What the NCIA stop-work clause requires

Under the NCIA Basic Ordering Agreement terms, the Purchaser may order the contractor in writing to stop all or part of the work. The order can cover the whole contract or only a portion of it.

Once the order is delivered, the company must comply with its terms. It must also take reasonable steps to minimize the costs allocable to the stopped work. The order is not a request: compliance is a contract obligation from the moment it is received.

The NCIA general contract terms add a formal requirement. The Purchaser's Contracting Authority issues the order in writing, and it must be specifically identified as a stop-work order under the applicable clause.

The 90-day stop-work period

The standard NCIA stop-work period is 90 days after delivery of the order. The parties may agree to a further stop-work period beyond that, so an order can run longer when both sides consent.

Work resumes when the purchaser cancels the order or otherwise authorizes resumption, or as the contract provides.

What a stop-work order should say

NATO contracting guidance in the Bi-SC contracting guidance sets out the content of a well-formed order. It should:

• describe the work being stopped;
• address further orders for materials or services;
• provide guidance concerning subcontracts;
• suggest ways to minimize costs.

These points matter because a stoppage reaches beyond the prime contractor. Material on order and subcontracted work are directly affected, and the order is the place where the purchaser gives instructions on them.

Related concepts and the U.S. parallel

A stop-work order is distinct from several nearby ideas:

• Suspension of work: a temporary halt to performance, which is the effect of the order.
• Termination: ending the contract rather than temporarily stopping performance.
• Government delay of work: delay attributable to the government or purchaser.
• Cost minimization: the contractor's duty to avoid unnecessary costs during the stoppage.

The NATO clause is closely aligned with the United States Federal Acquisition Regulation. The FAR provisions on work stoppage permit stop-work orders in negotiated fixed-price and cost-reimbursement supply, research-and-development, and service contracts. They apply when a stoppage may be needed, for example because of program realignment or technical developments.

What it means for a supplier bidding on Canadian public contracts

Canadian suppliers pursuing NATO NCIA work through a Basic Ordering Agreement or the general contract terms should expect to find this clause and plan for it. Build the response steps into your contract management process:

• Stop the affected work when the written order is received.
• Follow the order's instructions.
• Take reasonable steps to minimize costs associated with the stoppage.
• Address affected material, service, and subcontract orders as directed.
• Resume work only when the purchaser cancels the order or authorizes resumption, or as the contract provides.

Flow these obligations down to your subcontractors so they can act as soon as an order arrives. On any solicitation, read the contract terms for the exact wording of a stop-work clause before you submit your bid.