Stop-Work Order - Equitable Adjustment (Is supplier required to provide detailed breakdown of price)

The contract clause requires YOU the contractor to provide supporting details for YOUR equitable adjustment. A subcontract term and condition that is at odds with Your requirement doesnt override your requirement. If you want an equitable adjustment that is based upon or includes subcontractor costs, you must provide reasonably required supporting cost, markup and time impact details.

@realquiet, if a stop work clause was included in the prime contract, it should have been flowed to the supplier with proper alteration of the parties. The changes clause requirements in the prime contract can be considered applicable to the stop work clause order. The order should be flowed from the prime to the supplier. Prime contractors should always include a changes clause in supplier contracts. Such clause should indicate that the supplier agrees to submit a "fully supported" proposal to the prime, or similar language. If so, the supplier can be held in default of its contract with the prime if it does not agree to submit to the prime the detailed information you mentioned,

Neil Roberts said:

@realquiet, if a stop work clause was included in the prime contract, it should have been flowed to the supplier with proper alteration of the parties. The changes clause requirements in the prime contract can be considered applicable to the stop work clause order. The order should be flowed from the prime to the supplier. Prime contractors should always include a changes clause in supplier contracts. Such clause should indicate that the supplier agrees to submit a "fully supported" proposal to the prime, or similar language. If so, the supplier can be held in default of its contract with the prime if it does not agree to submit to the prime the detailed information you mentioned,

Regardless of the existing subcontractor language, if you, the contractor, want the government to reimburse you for subcontractor delay impact costs and your related costs, you will have to get the sub to provide the necessary detail to support its impacted time and costs.

Kind of a repeat.....but,

On 5/1/2025 at 2:07 PM, realquiet said:

Is our supplier required to provide that under 552.243-71(d) or do the terms and conditions set forth in their subcontract with us, the prime, take precedence?

Yep they do. There is not privy of contract between your sub and the Government. Or as stated absent some subcontract language to require the supplier to provide you are at the mercy of your sub.

What to do? Get a new sub? Provide the detail as the prime and hope it fits what your sub is telling you? Take your dilemma to your CO and ask them what they would like you to provide. If they say they want it from the sub and on the subs letterhead then you might be back to - get a new sub if the sub does not want to cooperate?

C Culham said:

Kind of a repeat.....but,

Yep they do. There is not privy of contract between your sub and the Government. Or as stated absent some subcontract language to require the supplier to provide you are at the mercy of your sub.

What to do? Get a new sub? Provide the detail as the prime and hope it fits what your sub is telling you? Take your dilemma to your CO and ask them what they would like you to provide. If they say they want it from the sub and on the subs letterhead then you might be back to - get a new sub if the sub does not want to cooperate?

@realquiet, If the subcontractor is in compliance with its subcontract terms and conditions, I don’t think you have any grounds legally to terminate the subcontractor for default.

You may have a little bit of leverage in negotiating with the subcontractor to provide the information above and beyond the current subcontract terms and conditions. If you have an ongoing relationship And/or if the sub wants more work in the future from you, you might twist their arm a bit or coax them and say something to the effect “Hey, please cooperate here if you want to continue doing business with us. The Government won’t pay us unless we provide the required details. “ Negotiate, using the carrot of future business.

Other than that, I don’t think you have legal grounds to stand on with the sub to make the government pay you what the sub is demanding that you pay them, without adequate breakdown of costs, markups and time adjustments.

Wow, @realquiet. I don’t know if you are a new government contractor. This should be a lesson learned not to accept or offer contract terms and conditions to subs that contradict your prime contract terms and conditions. Doing so can put your company at risk to owe a sub more than the government will pay you in a modification, REA or claim situation..

joel hoffman said:

If the subcontractor is in compliance with its subcontract terms and conditions,

@realquiet Big "IF". My experience would suggest that most contractors in any setting are not in 100% compliance with even their own terms and conditions. If you look hard I suspect you can find the leverage to strongly suggest they should cooperate or otherwise they are gone as to me the leverage does not have to be for the specific issue. Or as noted another element of negotiation.

On 5/6/2025 at 7:52 AM, C Culham said:

@realquiet Big "IF". My experience would suggest that most contractors in any setting are not in 100% compliance with even their own terms and conditions. If you look hard I suspect you can find the leverage to strongly suggest they should cooperate or otherwise they are gone as to me the leverage does not have to be for the specific issue. Or as noted another element of negotiation.

Well, if this prime ends up having to pay this sub more than the prime can justify to the government, the sub may have cooked its own goose for future work with this prime -thus why I suggest dangling the cooperation carrot to the sub.