My Contract Due Dates Are Extended – Right?

Contract Due Dates Don’t Automatically Extend When Your Business Is Forced to Close

On top of trying to keep your business running during the COVID-19 pandemic, it’s important to remember that delivery dates in your government contracts are not altered because of external events – including business closures forced by State governments trying to stem the spread of COVID-19.

You must seek delivery extensions on all your contracts.

During the COVID-19 crisis, closures and restrictions on businesses are becoming the norm to “flatten the curve” and shield our health care system from an impossibly high surge in critical cases.  During these times it is important for government contractors to be sure we are in sync with government expectations.

On March 20th, Undersecretary of Defense for Acquisition and Sustainment Ellen Lord issued a memo that read in part, “If you work in a critical infrastructure industry you have a special responsibility to maintain your normal work schedule. That applies to prime contractors and subcontractors that support essential production and services required to meet national security commitments to the federal government and the U.S. military.”

While government contractors are expected to perform during this crisis, state and local government restrictions on business operations may not consider DoD requirements.  And since government contract deadlines can only be changed by the Procuring or Administering Contracting Officer, you cannot safely assume that missing a delivery date is permitted if restrictions in your area have impacted your ability to perform.

If that happens – either because your state or local government requires your business to close, or because your suppliers work in states where those restrictions have occurred, you MUST take immediate steps to communicate your situation.  It is critical that you:

  • Immediately send notifications to your KO informing that you are unable to perform, and why (include copies of shutdown declarations)
  • Request immediate extensions to all due dates affected by the shutdowns – on a day-for-day basis plus a minimum 2-week buffer

The earlier this communication occurs, the higher the possibility of a resolution that is beneficial to both your business and to the customer.

Given the uncertainty facing everyone in this situation, you may not even hear back as many government installations are equally affected by COVID-19 response. But, by having submitted a request for extension and citing the extenuating circumstances, you have at least put the government on notice and sought relief. This will help you in later exchanges and negotiations.

But the worst thing you can do is just assume that the government will offer an extension simply because of what’s going on. They may – but you cannot assume that; especially if the government deems your product / service as essential.

Our last two blogs offered actions you can take at both the federal and state / local level to receive an exemption from closures.

URGENT COVID-19 ACTION for GOVERNMENT CONTRACTORS

Is My Business Essential under COVID-19 Shutdowns?

Is My Business Essential under COVID-19 Shutdowns?

Navigating the “Essential Business” Designation under COVID-19 Work Shutdowns

As the country battles the spread of COVID-19, many State and Local Officials are taking measures to stop the spread of COVID-19, often including shutting down all “non-essential” businesses. This poses a severe challenge to federal contractors in the defense, aero-space, intelligence and other firms, as well as their supply chains.

As government contractors, you are probably asking: How do I know if my business is essential?

Ellen Lord, the Undersecretary of Defense for Acquisition and Sustainment, issued guidance on Friday March 20th, 2020 trying to clarify that point, explaining which businesses the Federal Government considers ‘essential’ and asking them to continue working. They use Department of Homeland Security (DHS) guidelines for ‘critical infrastructure’ which include aerospace mechanical and software engineers; manufacturing/production workers; IT support; security; intelligence support; aircraft and weapon systems mechanics and maintainers; suppliers of medical supplies and pharmaceuticals; and critical transportation – among others.

The challenge is that the States have sovereignty in this area, so your best course of action is to contact your Governor and other local authorities and request to be exempted from any shutdown affecting your operations because of your commitment to supporting / supplying our nations’ security.

ACTION(s): If you need to keep your government contracts moving ahead during the COVID-19 pandemic, then:

  1. Appeal to your State Governor and local officials using Undersecretary Lord’s memo as a catalyst, and explain (that you):
    • Are seeking to be designated as an ‘essential business’
    • Have federal government contract commitments that need to be met
    • Believe your business meets the definitions outlined in the memo
    • Are providing a copy of the memo and show where your business meets the DHS definitions
    • The precautions you are taking to curb the spread of COVID-19 during the showdown (e.g. compliance with CDC guidelines, etc. – be specific about your plan)
    • Appreciate the difficulty your state/local leaders are undertaking but feel you must remain open, even under the circumstances
  1. Send courtesy copies of your letters to your elected federal officials at the same time you make your appeal
  2. Send your letter, and Undersecretary Lord’s letter, to your suppliers and ask them to do the same in their state and community

Ellen Lord’s Memo to the Defense Workforce is available on the DoD’s website.

Read about Ellen Lord’s statement.