The Tips and Procedures for Issuing a Stop Work Order

Stop Work
Stop Work. Photo J Rodriguez

Have you received a stop work order? Well, a stop work order is a method used in the construction industry to suspend work until a decision or an agreement has been reached. Stop-work orders are normally used in any lump sum contracts or any service contract and it involves certain risks and economic disputes.

Stop Work Order FAR Clause

Stop-work orders are ordinarily incorporated into every single federal contract.

The Stop Work Order Clause can be found under subpart 42.1303 provided that these situations can cause unexpected delays to the government that might not be covered in the contract. The clause indicates that:

  • Stop work orders shall be issues almost in any fixed-price or cost-reimbursement type of contract. It is important to highlight that it should be issued when the work is being asked to be stopped for several reasons including production, engineering or changes in scope.
  • This type of document shall be issued when it is recommended to suspend work, pending a decision from the government or changes in scope that might affect the project duration.
  • Stop work orders shall be issued by top management executives and must not constitute a termination notice.

Stop Work Order Notice

A stop work order notice must be a documented process on which the following items must be included:

  • Description of all activities being suspended
  • Clear instructions or directions shall be provided to the contractor regarding pending material orders, permits, services, and scope.
  • How to manage any subcontracts; and suggestions related to overhead and general condition items.
  • The order must be discussed between the contractor and the one issuing the notice
  • When the stop-work order, needs to be modified and before it expires, the issuing officer shall address the following items as well:
    • Steps on how to terminate the contract if needed
    • How to modify the stop-work order and how to cancel the process when needed.
    • Who will decide when and where the order shall be finished or extended
    • Things to consider when the order needs to be extended and agreements that shall take place before the contract continues execution

Stop Work Order Key Points 

Stop work orders might be complicated but here are some key points to make them simpler:

  • Stop work when inspectors or owner representative finds hazardous substances that might harm employees
  • Can be issued to protect other buildings, tenants or workers from unsafe conditions
  • Stop work orders can be issued covering only a portion of the project or some specific tasks
  • Sometimes remedial work will be allowed to make the site safe and even some partial work can be completed
  • Fines could be imposed when stop work orders are not followed 
  • To lift a stop work order, a re-inspection might be necessary and additional costs might be charged to the contractor.
  • Stop work orders not only are allowed between general contractor and owner, but they can also be used between subcontractor and their general contractor.
  • A written document might be issued that will explicitly list the reason of such stop work order and the affected areas.
  • Stop work orders when included in the contract, minimizes the risk of a breach.
  • It can be very useful to demonstrate that the general contractor is still in control of the construction project, but it might be the last path you would like to follow.
  • It is important to have a paper trail that evidences all right decisions taken and all necessary steps that were taken to avoid such situation.
  • A start order shall also be obtained once all faulty situations have been fixed.
  • Make sure that proper communication has been made to all subcontractors
  • Keep track of all costs during the stop-work order process so it can be captured and in the even those costs can be reimbursed, accounting process will be completed easier.