OMB Memorandum Sets Important Guidelines for Government Contractors During the COVID-19 Pandemic
Last week the United States Office of Management and Budget (OMB) provided guidance to federal contractors regarding payment for contractors that have been impacted by coronavirus. Contractors that have received stop work orders or other delays may now be eligible for continued payment under OMB Memorandum M-20-18 and Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). Section 3610 of the CARES Act, which we covered in a previous blog, provides further clarification under the following section of the act entitled “Federal Contractor Authority.” This section of the act states that Contracting Officers have the granted authority to continue paying contractors in order to maintain employment for contractor personnel, even if the contract is subject to a stop work order or other delay.
OMB Memorandum M-20-18 is a nine-page document that provides very important information for federal contractors. Here are the four main areas covered:
- Mitigating the impact of COVID-19 on contractors
- Procurement flexibilities
- Tracking activities
OMB Memorandum M-20-18 provides much needed guidance on teleworking during these challenging times. It is stated in the memo that federal contractors are generally responsible for managing their own workforce, including how telework is used by their employees but OMB issued further guidance under FAR 7.108 that the contracting agency shall not discourage a contractor from allowing its employees to telecommute in the performance of Government contracts during the current pandemic. What does this mean for you? If you are currently impacted by COVID-19 and do not have the ability to telework, you should now be eligible to modify your contract to receive current contract obligation funding amounts while you are unable to work. Under OMB guidance, agencies should seek to maximize the use of telework but will provide funding for those who are impacted by the virus and not in a contract that lends itself to telework so they can ensure employees or subcontractors remain in a ready state.
2. Mitigating the Impact of COVID-19 on Contractors
Coronavirus is changing our daily lives and causing anxiety across the nation. During this pandemic if any contract personal are exposed to the virus, rest assured that you will be able have your contract extended or altered if any slip in the contract schedule occurs as a result of your contract personnel needing to be quarantined. If you seek equitable adjustment due to COVID-19, agencies make take your request into consideration on a case-by-case basis in accordance with existing agency practices. Under the guidance of OMB Memorandum M-20-18, agencies also should always take into consideration whether it is beneficial to keep skilled professionals or key personnel in a mobile ready state for activities the agency deems critical to national security or other high priorities (e.g. , national security professionals, skilled scientists). Agencies may also consider whether your contract possesses further capabilities that may be useful to address the pandemic response, such as security or logistics.
Constant communication between agencies and industry partners is critical to continue the government’s fight against the invisible enemy. All face-to-face meetings, industry days, contractor debriefings, and inspections should be reviewed on a case-by-case basis under Centers for Disease Control and Prevention (CDC) recommendation and state and local government regulation. The CDC is suggesting agencies should consider virtual activities, such as online industry conferences, video proposals, and other innovative steps in planning their acquisitions as a best practice to mitigate coronavirus risk. It is important to note that if your current System for Award Management (SAM) registration is expiring before May 17, 2020, you will be afforded a one-time extension of 60 day due to the ongoing pandemic.
3. Procurement Flexibilities
President Donald Trump declared a national emergency in response to the ongoing coronavirus outbreak across the nation under the Stafford Act. This means that special emergency procurement flexibilities are available through FAR 18.202 (defense or recovery from certain events) to support response efforts to COVID-19. These important procurement flexibilities include:
- Raising the micro-purchase threshold from $10,000 to $20,000 for domestic purchases and $30,000 for purchases outside of the United States
- Raising the simplified acquisition threshold from $250,000 to $750,000 for domestic purchases and $1.5 million for purchases outside of the United States
- Simplified acquisition procedures up to $13 million for purchases of commercial item buys
It is important to note that agencies are expected to use sound fiscal prudence to maximize value for each taxpayer dollar spent. The current availability of procurement flexibility does not mean money must be used, instead that it should be used in response to national emergency needs.
4. Tracking Activities
If you would like to track the relief contracts related to COVID-19, you can visit the General Services Administration’s (GSA) new National Interest Action (NIA) Code in the NIA field on Federal Procurement Data System (FPDS). The NIA started on 3/13/2020 and will be available until 07/01/2020. It is being strictly used to report related acquisition costs in response to the coronavirus and exercises the emergency authorities identified in FAR 18.2. The Contract Writing systems shall use the code 'P20C' when creating or updating documents through Business Services. Guidance has also been issued to ensure CO’s are using “COVID-19” or “Coronavirus” on all solicitation and related documentation to facilitate easy keyword tracking for contractors looking to support the governments ongoing efforts against COVID-19.
You Can Play a Vital Role in Supporting the Fight Against Coronavirus
Government contractors play a vital role in supporting agencies to ensure critical response efforts to COVID-19 are being met. As the impact of COVID-19 continues to evolve, contractors may be affected in a variety of ways. Whether or not you are able to access your federal work site may play a huge role on your ability to support government efforts. However, federal agencies now have granted authority to modify contracts or agreements to ensure contractors remain in a “ready state” and are paid if their job duties are unable to be performed remotely during this public health emergency. If you would like to learn more about emerging opportunities that exist as a result of COVID-19, contact our team.
About Bradley Wyatt
Bradley Wyatt is an Account Manager for Winvale’s Public Sector Technology department where he manages partner accounts as part of Winvale’s Schedule 70 Information Technology. Bradley is a native of Fredericksburg, Virginia and a graduate from James Madison University with his Bachelor’s of Science in Public Policy and Administration.