We’ve heard a lot about COVID-19 (Coronavirus) lately, and the mountain of misinformation that has followed in its wake. We’re struggling to figure out what is fact and what is fiction. But we probably can lend a hand in understanding the impact of the current health emergency on federal contracts.
Accordingly, we offer the following guidelines to help you prepare for any potential COVID-19 impact on your federal business (and to give you all something to read while you wait in line for your hand sanitizer, surgical masks, and latex gloves).
Communicate early. If you hold contracts that could be impacted by coronavirus, in terms of performance, schedule, or cost, reach out to your CO sooner rather than later. Among other things, explore mutually acceptable ways to handle issues relating to the virus, e.g., employees at Government facilities unable to report to work, shortages of staff delaying performance, inability to access Government facilities, among other potential issues that may derive from the impact of the virus.
Provide timely notice. Be sure to notify your CO promptly, and memorialize it in writing, if you believe your performance will be impacted by the virus. Make sure your personnel know to bring such situations to your attention as soon as they know.
Document everything. You should document any increased costs or delays attributable to the virus, and more generally, document how the virus impacts your performance.
Consider trying to recover or offset your increased costs. If you experience increased costs on your ongoing contracts, consider requesting a contract modification to cover those costs. If you are a commercial items contractor selling at fixed prices or rates, consider requesting an Economic Price Adjustment under your contract’s EPA clause. The standard EPA clause gives a contracting officer discretion to approve unscheduled increases due to surprising national/international events.
Review your sick-leave policy. Many contractors, like many companies, give their employees only limited sick leave. At the same time, having employees attend work because they are out of sick-leave creates significant risk – whether those workers work at a Government site or a company site. Contractors should consider how they plan to handle sick employees who are unwilling to stay home, or employees who need to stay home to care for a loved one.
Equip your employees to work remotely. Contractors should consider providing technology that allows employees to work from home, a laptop with VPN access to your systems, if remote work is permitted under the applicable contract. If the contract does not permit remote work – and some federal contracts do not – then consider reaching out to the CO to discuss modifying the contract. In either case, communicate with your employees now. Give them an action plan. A simple reminder to bring their laptop home with them every day (if allowed) could go a long way.
Consider your cybersecurity obligations if you have personnel working from home. Remember, your federal contracts bring with them a number of cybersecurity rules. For example, your federal contracts may incorporate data security provisions requiring that sensitive information be maintained on secure systems with specific protections.
Be prepared for novel customer requests. Like contractors, federal agencies are struggling to adapt to the realities of a Corona-fueled purchasing and performance landscape. As federal agencies contemplate sending their own employees to work at home, they are going to face a host of questions not contemplated by their current contracts.
Understand GSA’s Cooperative Purchasing Program. If you are a GSA Schedule contractor, keep in mind that state, local, territorial, and tribal government are authorized to purchase through the MAS program when the Government declares a Public Health Emergency. The Government declared a PHE at the end of January. Accordingly, state, local, territorial, and tribal governments that previously were not permitted to make Schedule purchases now may be permitted to make such purchases through GSA’s Cooperative Purchasing Program.
Look around. Companies are being proactive. United Airlines just sent an email to its customers outlining the steps the company is taking to keep them safe and keep them flying. Among other things, United now is wiping armrests and tray-tables with sanitizing wipes between flights. As these things become the norm, equivalent steps, tailored to the given industry, will be expected of other companies as well. No one wants to be implicated in an outbreak caused by a failure to adhere to industry “best practices.”
In addition to the foregoing, federal contractors, like all companies, will be well served by developing a detailed plan of action. Think through the various ways coronavirus could impact performance, schedule, and/or cost, and develop a concrete mitigation plan. The earlier you get started on that, the better off you’ll be down the road.
Obviously, we’re dealing here with a “live event,” and the facts continue to change. The steps outlined above, however, should keep you ahead of the curve at least contractually. Of course, these are not bible steps a company has to follow. Every contract, every company is dealing with the pandemic situation differently and considering their plan of actions.
Author: Prasanna Haresh Patil