Welcome to The Bottom Line: Cost and Pricing Updates, a new series covering what contractors should know about recent cost and pricing disputes—without the long read!
For our inaugural post, we present:
Appeal of Gideon Contracting, LLC, ASBCA No. 63561 (May 12, 2025)
The Bottom Line: When the Government orders a suspension of work due to an “act of God,” it may still be on the hook for the resulting increased costs under the Suspension of Work clause if it proximately causes an unreasonable delay. Here, the Government proximately caused the delay at issue through its management of water drainage through a lake and dam, including through controlled releases of water, and the Armed Services Board of Contract Appeals (“ASBCA” or “the Board”) found a portion of the delay to be unreasonable.
Key points of interest:
- Generally, “acts of God” entitle contractors to additional time, but not additional compensation. However, the distinguishing feature entitling Gideon to additional compensation here was that the Government controlled the release of floodwaters via a drainage management system. Thus, the flooding was not caused solely by rainfall, as the Government argued, but rather, by the Government’s release of floodwater.
- Gideon was not entitled to damages for the entire suspension period, however, because the contract specified when and how water releases would occur. Therefore, Gideon was only entitled to compensation for portions of the suspension that were found to be “unreasonable” (or as described by the Board, inexplicable).
Contractors facing suspensions of work should carefully evaluate whether their contracts may entitle them to relief where at least a portion of such suspensions are “unreasonable.”
