Generally, construction contracts include a suspension of work clause which provides that the government may suspend, interrupt, or delay work for the convenience of the government.
A government delay is compensable if:
- It is unreasonable;
- The Contracting Officer orders it;
- The contractor has not caused the suspension by its own or its subcontractors’ negligence or failure to perform; and
- The cost of performance increases.
The contractor may be entitled to recover delay costs even if it finishes work on time, so long as the contractor proves that it planned to finish the work early but was delayed by the government.
A contractor may also raise government delay as a defense to a liquidated damages assessment or a default termination.
If both the contractor and the government contribute to a delay, and the causes of delay are intertwined such that the periods and costs of delay cannot be apportioned clearly, then neither party can recover for delay.
Profit is not recoverable under the suspension of work clause; only costs are recoverable.