Contractor Was Not Damaged by Stop Work Order

A claim for basic ownership, operating and idle personnel costs arising from a stop work order was denied by the Civilian Board of Contract Appeals because the contractor failed to prove it would have earned more under the affected contract than it earned through replacement work, or that it incurred costs that were not offset by the income it earned through the replacement work. The stop work order was issued in response to a protest of a contract award for exclusive use of helicopters. After the government ordered the contractor to resume performance, the contractor requested an equitable adjustment for idle equipment and crew costs. According to the contractor, its cost of performing the contract was increased as a result of the stop work order, and government and non-government replacement work only covered a portion of the daily ownership/operating costs incurred during that period.

Flawed Methodology

However, the contractor's methodology was flawed. To resolve the claim, it was reasonable to focus on whether the contractor was damaged overall by the stop work order, as opposed to looking at potential damages on a day-by-day basis. This necessitated a review of the purported ownership/operating costs during the period of the work stoppage, the income earned during the same period, and whether the income earned was sufficient to offset the income the contractor would have earned but for the work stoppage. The exclusive contract did not guarantee any flight time, and with no flight time, the contractor would have received $5,726,700 in mandatory availability payments. The contractor did not present compelling evidence of the amount of flight pay it would have earned but for the work stoppage. Further, the contractor failed to provide satisfactory evidence that the $5,494,795 it incurred in ownership/operating costs was not adequately offset by the $12,373,202 it earned in alternative work during the work stoppage. By focusing primarily on the individual days the helicopters remained idle, without considering how much it actually earned via the replacement work, the contractor failed to prove it was damaged at all. ( Air-Crane, Inc. v. Dept. of Agriculture, CBCA, 93,395)




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