How should contractors respond to a government stop‑work order in 2026?

According to GSA guidelines, contractors must treat a stop‑work order as an immediate contractual directive and not an informal suggestion. That means halting affected work streams, securing Government‑furnished property, and maintaining project sites in a safe, preservable state while continuing unaffected work if directed otherwise. Contractors should record dates, times, personnel assignments, and costs tied to suspension actions. According to GSA guidelines, contractors must also begin contemporaneous documentation that segregates stoppage costs from normal performance and ongoing change work; contemporaneous logs and daily entries are crucial to establish causation and quantum for any future claim. The Wolverine Tube ASBCA lessons underscore that inconsistent conduct—continuing work without explicit contracting officer authorization—can waive claim rights. According to GSA guidelines, contractors must also immediately review the contract’s FAR 52.242-15 stop‑work clause, consult legal or contracts counsel, and notify key subcontractors and insurers to preserve subrogation and pass‑through claim opportunities. This approach preserves entitlement and minimizes risk of adverse determinations.

Per FAR 19.502, small businesses can experience disproportionate risk from stop‑work orders when cash flow is interrupted. Per FAR 19.502, the prime must manage subcontractor notifications and potential subcontract claims under flow‑down clauses to prevent cascading defaults. The SBA reports that 78% of small contractors surveyed in 2024 experienced contract disruptions that affected their liquidity—making timely notice, escalation, and claim documentation vital. Per FAR 19.502, small businesses should prioritize written direction from the contracting officer before resuming work and seek prompt equitable adjustments. Per FAR 19.502, primes must also confirm whether the stop‑work order contains a directed change or merely suspends performance pending Government action; the distinction affects entitlement to costs under the Contract Disputes Act (CDA) and FAR clauses.

The SBA reports that 78% of small contractors said late government action and stop‑work events increased their administrative burden and dispute frequency, which aligns with GAO findings on protest and dispute upticks. Under OMB M-25-21, agencies will continue to emphasize rigorous documentation and audit trails for procurements and contract changes, increasing scrutiny of stop‑work responses. DoD's CMMC framework requires controlled documentation of cyber‑related stoppages when classified or Controlled Unclassified Information is involved; DoD contractors must preserve electronic logs and access records. Under OMB M-25-21, agencies will expect contracting officers to coordinate with legal and acquisition policy offices before issuing prolonged stop‑work orders, and Under OMB M-25-21, contractors should expect more frequent internal reviews and requests for documentation when a stop‑work is related to program risk or alleged noncompliance.

According to GSA guidelines, contractors must ensure all contemporaneous records are complete and segregated to support entitlement and quantum. According to GSA guidelines, contemporaneous records include daily logs, timesheets, equipment idle reports, purchase orders, delivery receipts, photographs, and chain‑of‑custody documentation for Government‑furnished property. According to GSA guidelines, contractors should also issue immediate written notices to subcontractors under flow‑down clauses and obtain their certified claims and cost breakdowns. The ASBCA’s Wolverine Tube precedent reinforces that late assembly of backdated evidence is weaker than contemporaneous documentation, so contractors must not rely on after‑the‑fact reconstructions. According to GSA guidelines, contractors should also preserve digital records and metadata; DoD and FedRAMP environments require additional controls to demonstrate integrity of logs. According to GSA guidelines, contractors must begin cost accumulation in a manner consistent with FAR cost principles and disclose disputed items to the contracting officer to avoid allegations of bad faith.

Per FAR 52.242-15, contractors must provide prompt written notification to the contracting officer if the stop‑work order causes an increase in cost or delay. Per FAR 52.242-15, if the contracting officer fails to lift or modify the stop‑work order within 90 days, the contractor may be entitled to an equitable adjustment. Per FAR 52.242-15, contractors should not resume suspended work without written direction because unauthorized resumption may forfeit recovery. Per FAR 52.242-15, contractors must also track compensation to employees and subcontractors for time spent protecting materials or demobilizing so those amounts can be claimed. Per FAR 52.242-15, any REA should include detailed cost summaries tied to specific calendar days and personnel to withstand audit and GAO or ASBCA scrutiny.

Under OMB M-25-21, agencies will require clear audit trails and may push contracting officers to resolve stop‑work incidents more quickly, which makes early engagement important. Under OMB M-25-21, contractors should expect increased agency requests for records, and under OMB M-25-21, failure to produce contemporaneous evidence can lead to unfavorable findings in GAO, ASBCA, or federal courts. DoD contractors must also consider CMMC controls when the stop‑work involves CUI or cyber incidents: DoD's CMMC framework requires demonstrable preservation of access logs and incident response artifacts. The SBA and GSA both advise that small businesses coordinate cash‑flow mitigation—such as invoicing for undamaged deliverables and coordinating progress payments—while protecting claim positions. Under OMB and agency guidance, escalation to senior contracting officials within 30 days is often recommended when an order exceeds 60 days to seek negotiation rather than formal claim litigation, which can cost 20%–40% of recovery in legal fees if litigated.

DoD's CMMC framework requires stricter custody and integrity procedures for electronic records when stop‑work events involve national security programs; contractors should document chain of custody for electronic evidence and coordinate with their Facility Security Officer. The Government Accountability Office emphasizes that proper pre‑award records and contemporaneous post‑event documentation significantly improve claim success rates. According to GSA guidelines, contractors must also track indirect costs and home office allocations consistent with FAR cost principles to avoid GAO audit adjustments. The SBA recommends that small firms place a 90‑day cash reserve or secure a $50,000–$250,000 line of credit to bridge common stop‑work disruptions; this aligns with industry surveys showing typical shortfall amounts. Per FAR 42.1303, failure to follow stop‑work procedures can also trigger contract administration actions, so preservation and early legal review are non‑negotiable.