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.