1. Home
  2. |Insights
  3. |Snooze You Lose: ASBCA Denies Appeal Seeking Payment for Employee Paid "To Do Nothing" During Stop Work

Snooze You Lose: ASBCA Denies Appeal Seeking Payment for Employee Paid "To Do Nothing" During Stop Work

Client Alert | 1 min read | 10.01.19

In Advanced Global Resources, LLC, ASBCA No. 62070 (September 10, 2019), the Armed Services Board of Contract Appeals addressed whether a contractor may recover unmitigated direct labor costs incurred during a stop-work period. The costs at issue related to an employee hired to work on Advanced Global Resources, LLC’s (AGR) Army technology support services contract. The Army issued a stop-work order one week after award due to a protest. While the stop-work order did not direct AGR to be “on stand-by,” AGR paid the employee despite the fact that the employee did not perform any work on the contract. AGR submitted a request for equitable adjustment for the employee’s direct labor costs and unabsorbed overhead.  The contracting officer denied AGR’s Eichleay damages, and conditionally granted payment of the direct labor costs, if AGR did not appeal. AGR did appeal, and the Board denied the direct labor claim stating that AGR paid the new employee “to do nothing” and failed to minimize its costs. The Board denied AGR’s unabsorbed overhead claim because it did not satisfy the second prong of the Eichleay formula. This decision serves as a reminder to mitigate costs (when possible) during a stop-work period in order to minimize the risk of nonpayment.


Insights

Client Alert | 12 min read | 03.10.26

EU Sustainability Reporting Revamp: Key Updates to the CSRD and the CS3D from the Omnibus I Directive

On 26 February 2026, the EU published Directive (EU) 2026/470 (the Omnibus I Directive). Adopted as part of the European Commission's (Commission) simplification agenda and after a year of debates and negotiations between the Commission, the Council, and the European Parliament, this text effectuates far-reaching changes to both the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CS3D)....