What to Do When a Contracting Officer Issues a Show Cause — and They’re Wrong

By Sean & Doug Reitmeyer — GCExperts. Originally posted on Skool: .

I want to talk today about a situation that scares contractors more than almost anything else in federal construction: A show cause letter. This is one of those moments where panic causes contractors to make mistakes that actually make things worse. The situation I’m about to describe is very real, very common, and very fixable — if you understand how the rules actually work. The Situation A contractor completed most of the work on a federal job installing overhead doors. - All doors were installed - Six doors had new openers installed and functioning - Four doors were installed but still operating manually The reason the four openers weren’t installed yet was simple: the manufacturer had the openers on backorder. This wasn’t hidden. This wasn’t ignored. The contractor had already communicated timelines. Despite that, the contracting officer issued a show cause notice, stating that: - The period of performance had been exceeded - Supplier and manufacturer delays are “generally considered within the contractor’s control” - A price reduction might be appropriate That last part is where things went sideways. The First Thing to Understand: Backorders Are Not Automatically Your Fault The statement that supplier or manufacturer backorders are always within the contractor’s control is incorrect. Backordered materials that are: - Commercially unavailable - Industry-wide - Outside reasonable control can constitute an excusable delay, depending on the facts and the contract language. This isn’t opinion. This is how federal contracts are structured. What the contracting officer was doing here was trying to preempt a defense they knew the contractor was about to raise. That happens more often than people realize. The Second Thing to Understand: A Show Cause Does Not Stop Your Contract Another dangerous misunderstanding: A show cause notice does not suspend your contract. It does not: - Terminate the contract - Freeze performance - Automatically put you in default