(Editor’s Note.  The basis for an equitable adjustment - e.g. delay versus suspension of work - can affect the allowability of profit.)

The government agreed contractor was entitled to an equitable adjustment due to a stop-work order but asserted it was not entitled to profit because the contract itself was not profitable.  The Board disagreed, stating that profit is part of an equitable adjustment unless the contract provides otherwise whether or not the contract was profitable.  The Board made clear that while the appeals boards have ruled a contractor is not entitled to profit in an equitable adjustment when a compensable delay arises out of a contract clause, such as the Suspension of Work clause that expressly precludes profit, a Stop-Work Order clause is not such a clause. (Rex Systems Inc., ASBCA No. 54444).

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