Using Unsolicited Federal Contract Proposals for Sole Source COVID-19 Related Contract Awards

Albert B. Krachman

Although firms that offer coronavirus COVID-19 solutions can use many routes to access the federal marketplace, very few of these routes can lead to a sole source contract. One such vehicle is the unsolicited proposal. An unsolicited proposal can result in a sole source contract if the firm’s proposed solution is unique enough to support a Contracting Officer’s sole source Justification and Approval. Recent case law has established that the government has a legal obligation to fairly evaluate unsolicited proposals, so in effect, submission of an unsolicited proposal creates an implied contract with the government that obligates the government to evaluate the firm’s proposal fairly (but not necessarily to award a contract to the firm). Scott v. U.S., No. 17-471C, 2017 WL 4785353 (Fed. Cl. Oct. 24, 2017).

Companies with innovative solutions that have not been the subject of procurement contracts or grants can use this vehicle to offer their goods or services to the federal government on this exclusive basis. Continue reading “Using Unsolicited Federal Contract Proposals for Sole Source COVID-19 Related Contract Awards”

VA Federal Supply Schedule Contracts and the Coronavirus

Merle M. DeLancey Jr.

In response to the coronavirus COVID-19 pandemic, the Department of Veterans Affairs (“VA”) has relaxed procurement rules and regulations to facilitate purchases from VA federal supply schedules (“FSS”). On March 20, 2020, the VA National Acquisition Center (“NAC”) informed all VA FSS holders that, based upon the President’s invocation of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121-5207 (the “Stafford Act”), state and local governments, territories, and tribes have full access to VA FSS contracts. See Presidential Declaration of National Emergency COVID-19 – State and Local Government Ordering Procedures.

Thus, even if a contractor did not elect to participate in Disaster Recovery Purchasing at the time of contract award, contractors are now permitted to accept any orders by state and local governments. However, whether to accept any state or local government order is voluntary not mandatory. Continue reading “VA Federal Supply Schedule Contracts and the Coronavirus”

COVID-19 Disruptions and Work Stoppages: A Q&A for Federal Contractors

Justin A. Chiarodo and Stephanie M. Harden

Coronavirus COVID-19 is rapidly disrupting the performance of federal government contracts across all sectors, leaving contractors and subcontractors with more questions than answers on how to structure their operations. In the following Q&A, we address some of the top issues contractors are currently facing.

      1. The Government has closed my work site, precluding my employees from performing their work. If I continue to pay the employees, can I recover those costs?

If your employees cannot perform their work because the work site is closed (and telework is not an option due to the nature of the work), this may be construed as an actual or constructive stop work order. As with a government shutdown, contractors facing this scenario may be entitled to an equitable adjustment to account for idle employee time because they are expected to be ready to perform as soon as the Government reopens facilities.

A March 20 Memorandum from Office of Management and Budget Deputy Director for Management Margaret Weichert (“Weichert Memorandum”) confirms that equitable adjustments may be appropriate if the requested costs are reasonable. Specifically, the Weichert Memorandum advises that such requests “should be considered on a case-by-case basis” and that agencies may consider such factors as “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).” Continue reading “COVID-19 Disruptions and Work Stoppages: A Q&A for Federal Contractors”

GSA Federal Supply Schedules Contracts and the Coronavirus: Risks and Rewards

Merle M. DeLancey Jr.

On March 19, 2020, the General Services Administration (“GSA”) issued guidance regarding its process for issuing Defense Priorities and Allocation System (“DPAS”) Rated Orders. Significantly, however, GSA reminded its contracting officers that “[e]xisting Government sources of supply and contract vehicles should be considered first. Check to see if the required supplies are available.” See gsa.gov/buying-selling/purchasing-programs/gsa-schedules/gsa-schedule-offerings/consolidated-schedule/industrial-products-services-category and gsaadvantage.gov/advantage/search/specialCategory.do?cat=ADV.DR. GSA federal supply schedules (“FSS”) can be a contracting officer’s one-stop shop for protective equipment, disinfectants, hand sanitizers, and other products and supplies to combat the coronavirus COVID-19. The GSA FSS also offers a variety of solutions for agencies looking for teleworking options. See gsa.gov/buying-selling/purchasing-programs/gsa-schedules/gsa-schedule-offerings/consolidated-schedule/professional-services-category.

The largest active buyer in the market right now remains the federal government. FSS is an important tool for the government to get supplies and services, but do not be fooled. With these potential opportunities, there also are potential risks for FSS contractors that fail to follow the terms and conditions of their FSS contracts and/or seek to cut corners.

As is often the case, FSS vendors go above and beyond to provide services or deliver supplies to federal agencies to respond to emergency situations like the COVID-19 pandemic. As is also the case, months later, after the dust settles, agency offices of inspector general arrive to audit contracts. Inevitably, in the effort to expeditiously fill government orders, things get overlooked or ignored, and “but I was helping the agency fulfill its mission in response to a pandemic” is not a defense that will resonate with government auditors.

Based upon our experience, here are some tips for FSS vendors to follow and/or traps to avoid: Continue reading “GSA Federal Supply Schedules Contracts and the Coronavirus: Risks and Rewards”

Defense Production Act: Government Contractor Cheat Sheet

Merle M. DeLancey Jr.

On March 18, 2020, by Executive Order (“E.O.”), President Trump invoked the Defense Production Act of 1950 (“DPA”). The E.O. delegates DPA authority to the Secretary of the Department of Health and Human Services with respect to “all health and medical resources needed to respond to the spread of COVID-19 within the United States.” This means that the performance of rated contracts and orders (i.e., certain contracts and orders in support of programs covered by the DPA, as explained below) must be prioritized over competing commercial or non-rated governmental obligations—even if doing so could result in a breach of other obligations.

Set forth below is a checklist for contractors that have received (or believe they may receive) a rated order from a federal government agency:

1. Memorialize Standard Operating Procedures (“SOP”)

Effectively managing rated orders requires careful attention, particularly given the operational disruptions from coronavirus COVID-19. A company should consider establishing (or updating) SOPs for rated orders covering the following:

      • Designating a Point of Contact (“POC”) Responsible for Rated Orders. Publicize the POC within the company so that management and employees (e.g., C-Suite, Sales, and Marketing) who do not normally handle government contracting matters know who to contact.
      • Establish a Process to Communicate with Subcontractors. A prime contractor in receipt of a rated order stands in the shoes of the federal government and is required to notify applicable subcontractors of compliance with the rated order. Consider notifying subcontractors of the possibility of receiving a rated order and provide background on the DPA so they are not caught by surprise.
      • Establish a Commercial Customer Communications Plan. Because a rated order can delay or interfere with performance of commercial contracts, consider keeping commercial customers aware of potential impacts in the event that the government issues a rated order.
      • Frequent Communication with Contracting Officers. If the company believes it might receive a rated order, establish clear lines of communication with your Contracting Officers. Provide or re-confirm contact information for the company’s POC for rated orders.

Continue reading “Defense Production Act: Government Contractor Cheat Sheet”

DoD Urges Contracting Officer Transparency in COVID-19 Impacts

Albert B. Krachman and Dominique L. Casimir

The Department of Defense’s (“DoD”) Office of Under Secretary of Defense for Acquisition and Sustainment issued Guidance on March 10, 2020, addressing internal and external communications in response to the coronavirus COVID-19 pandemic. See Planning for Potential Novel Coronavirus Contract Impacts.

The Guidance states that the Contracting Officers (as distinguished from Program personnel) hold the contractual authority to address contract performance impacts related to COVID-19. Moreover, the Guidance encourages close communication between Contracting Officers and contractors, and stresses Contracting Officer transparency, a term not normally seen in contract administration guidance. In pertinent part the Guidance states as follows:

Communication between the Government and contractors is key to total workforce safety and mission continuity. Therefore, contracting officers should be as transparent as possible as they make decisions potentially impacting contract performance or contractor personnel. Contracting officers should also encourage their contractor site leads/leadership to engage with their employees as soon as possible to share information and discuss any COVID-19 concerns they have, and ask their contractors to identify potential impacts to the welfare and safety of their workforce or contract performance, which impacts our total force. Continue reading “DoD Urges Contracting Officer Transparency in COVID-19 Impacts”

New DoD Cybersecurity Regulations Are Coming—Is Your Company Ready?

Michael Joseph Montalbano

In January, the Department of Defense (“DoD”) released more information on its much-anticipated Cybersecurity Maturity Model Certification (“CMMC”) framework. While a final rule is not expected until the fall, contractors need to begin preparing now so they do not miss out on DoD contract opportunities.

What Is the CMMC?

The CMMC is a certification system that all DoD prime and subcontractors must comply with to be eligible to compete for and perform future DoD contracts. Under the new CMMC requirements, an accreditation body tapped by DoD will begin training third-party assessors in the spring of 2020, who will in turn certify defense contractors under the CMMC. There will be five CMMC certification levels, of ascending sophistication:

    • Level 1 – Basic Cyber Hygiene
    • Level 2 – Intermediate Cyber Hygiene
    • Level 3 – Good Cyber Hygiene
    • Level 4 – Proactive
    • Level 5 – Advanced / Progressive

The contractor must comply with a combination of the following cybersecurity safeguards, depending on the certification level a contractor wants to achieve: (1) FAR 52.204 (Basic Safeguarding of Covered Contractor Information Systems); (2) NIST Special Publication 800-171 Revision 1 (“NIST Requirements”); (3) select subsets of a supplement to the NIST Requirements called NIST SP 800-171B; and (4) up to 171 “practices” identified in the CMMC. Though this may sound like a lot for contractors to process, DoD has released helpful appendices that put many of the requirements in easy-to-understand terms. Continue reading “New DoD Cybersecurity Regulations Are Coming—Is Your Company Ready?”