Staying Away from Politics – The FAA Shutdown Situation

One thing I am attempting to stay away from in this continuing saga that is government contracting is POLITICS.  The unfortunate thing about this guiding principle is that politics runs the federal government.  The latest victim of politics instead of business is the FAA.

From: http://www.dot.gov/affairs/2011/dot9811.html
Last week, contractors across the country were told to stop work on critical airport modernization projects after Congress failed to pass legislation giving the FAA the authority necessary for work to continue.  Dozens of “stop work orders” were issued for major projects designed to build and modernize control towers and other aviation infrastructure from coast to coast.  Construction workers, engineers and planners were told not to come to worksites across the country after the FAA was forced to issue stop work orders on projects ranging from the construction of new air traffic control towers to the rehabilitation and modernization of air traffic facilities.  Nearly 4,000 FAA personnel, many needed to oversee various aspects of these projects, were furloughed beginning on July 23.  The Association of General Contractors estimates that as many as 70,000 construction workers are unable to work because of Congress’ inaction. Stopping work on these projects could significantly increase the ultimate costs of construction for taxpayers.

I think it is comical enough to think about a half-built air traffic control tower at an airport or to consider the clash of the “classic” 70s oranges and browns with the 2000s greys, chrome, and lights along an airport corridor.  But, in order to “stay away from politics” I will focus on the stop-work order.  This is a tough situation in an economy that really can’t handle a lot of tough situations. 

I have first-hand experience of a stop-work order when I was a consultant with the DOE.  It was a beautiful August afternoon.  It was a Friday.  My team and I had been working diligently to assemble the finishing touches of a tool, workflow, and pages of documentation we had been working on for the better part of a year.  We were approaching the 95% mark and were happy with where it was going.  Federal financial management at the DOE would never be the same and we had even more ideas for the upcoming option year on the contract – taking DOE to next-gen financial management as an agency.  Then, I got a call around 5:30 p.m… on a Friday… STOP WORK.  The team-lead had just gotten an e-mail from the new folks in charge that they were stopping work. [Rest of the story edited here because I really don’t want to get into politics].  In the end, 5 people were out of work at a small consulting firm and had to make a mad dash to find something new to work on and ultimately had to find new companies to work for.

Multiply this by THOUSANDS and you have the situation at the FAA.  The number of people that are affected is already in the thousands and there stand to be more cuts if nothing is done.  Again, this is not something that the economy needs, let alone the individuals affected, but I digress…  Let’s consider the regulation directly from FAR that talks about the amount of work it takes just to issue a stop work order (highlighting added).

FAR 42.1303, Stop-work orders. (a) Stop-work orders may be used, when appropriate, in any negotiated fixed-price or cost-reimbursement supply, research and development, or service contract if work stoppage may be required for reasons such as advancement in the state-of-the-art, production or engineering breakthroughs, or realignment of programs.
 (b) Generally, a stop-work order will be issued only if it is advisable to suspend work pending a decision by the Government and a supplemental agreement providing for the suspension is not feasible. Issuance of a stop-work order shall be approved at a level higher than the contracting officer. Stop-work orders shall not be used in place of a termination notice after a decision to terminate has been made.
(c) Stop-work orders should include— (1) A description of the work to be suspended; (2) Instructions concerning the contractor’s issuance of further orders for materials or services; (3) Guidance to the contractor on action to be taken on any subcontracts; and (4) Other suggestions to the contractor for minimizing costs.
(d) Promptly after issuing the stop-work order, the contracting officer should discuss the stop-work order with the contractor and modify the order, if necessary, in light of the discussion.
(e) As soon as feasible after a stop-work order is issued, but before its expiration, the contracting officer shall take appropriate action to— (1) Terminate the contract; (2) Cancel the stop-work order (any cancellation of a stop-work order shall be subject to the same approvals as were required for its issuance); or (3) Extend the period of the stop-work order if it is necessary and if the contractor agrees (any extension of the stop-work order shall be by a supplemental agreement).
So, consider the amount of time it takes to stop a contract (or in the case of FAA multiple contracts) and the number of people involved and the amount of paper used and the possibility of termination that the contractor then has to prepare for and the people working for the contractor have to consider their livelihood and… Well, you get the picture.  Stop-work orders are bad enough when a termination is looming, but in this case in particular where there is every bit of evidence that the projects will be picked back up, the additional cost is unnecessary (increasingly so when you consider the recent budget debates).

My gentle word of advice to any contractor and contracting official is to know what the stop-work order is leading to.  If it is just stopping the work until we figure it out (and there is every indication of the projects continuation) let it go.  A bit of risk assessment and planning can go a long way to understanding the overall scheme of the project and the outcome.  Considering all of this will lead to a less-expensive (read “wasteful”) pause/stop-work order.

About Marty Herbert

With 13 years of government contract administration, analysis, finance, and audit experience, I have established a firm baseline in ethics and a specialization in government contracts that has prepared me to become a subject matter expert in my field. I am currently working on enhancing government contracts management and compliance through workflow tools and product offerings - attempting to make the process proactive as opposed to reactive.
This entry was posted in General and tagged , , , , . Bookmark the permalink.

Leave a Reply

Your email address will not be published.