When a construction contact is breached, it can mean the end of a project until the breach can be sorted out. As someone working with a construction team, you would, of course, want to get the problem sorted out legally before you continue, even if that means getting a new contract in order.
Like in your situation, this same thing has happened in the case of the new Veteran's Association hospital in Aurora, Colorado. According to a report from Dec. 10, the contractor who was building the project stopped because the U.S. Department of Veteran's Affairs allegedly breached its contract with the Denver VA Medical Replacement Project.
The contractor was awarded a ruling to stop the project thanks to the Civilian Board of Contract Appeals. The project, which is expected to cost $604 million, is over budget and behind schedule, the reports claim, which has strained it. Unfortunately, it's not the only VA project in the same boat; it's one of four that have been in breach of contract for going over budget and taking too long to finish.
According to the spokesperson for the contracting team, the contractor has gone to extraordinary lengths to keep the project going since 2011. This includes spending $100 million or more out of pocket just to keep people involved paid. Construction was stopped due to failing to have sufficient funds to continue for the entire project, and the company claims that the VA has not acted in good faith.
This halt in production has put somewhere around 1,400 people out of work, but the company has said it won't continue the project until it has a new contact to do so.
Source: News 9, "Work on VA hospital in Aurora comes to a halt" Robert Garrison, Dec. 10, 2014