With COVID-19 spreading to more people daily and with the emergency declarations that have been enacted, it’s likely that your business will be impacted as well. As a government contractor, your business has contractual obligations that could become difficult to fulfill in this environment. As such, you should be aware of contract clauses that may provide you relief in the form of excusable delays and compensable delays in performance.
Excusable delays protect contractors from termination for default and bad contractor performance reports; both of which can effectively put a contractor out of business.
The first thing to do is to determine which of the federal acquisition regulation clauses are in your contract and whether the agency’s policies during the Coronavirus pandemic are impacting your ability to deliver. If so, read the clauses closely and take action to preempt possible delays or default on your contract by identifying delays and assessing any additional costs associated with the delays. Then, notify the contracting officer immediately of your requests for equitable adjustments (REAs) or extensions to performance periods. Below are a FAR clauses that are related to unexpected delays.
“the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are
- acts of God or of the public enemy,
- acts of the Government in either its sovereign or contractual capacity,
- quarantine restrictions,
- freight embargoes, and
- unusually severe weather.
In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor. Default includes failure to make progress in the work so as to endanger
Compensable delays allow contractors to be compensated for lost or excess costs of delays.
(a) The Contracting Officer may order the Contractor, in writing, to suspend, delay, or interrupt all or any part of the work of this contract for the period of time that the Contracting Officer determines appropriate for the convenience of the Government.
(b) If the performance of all or any part of the work is, for an unreasonable period of time, suspended, delayed, or interrupted
(1) by an act of the Contracting Officer in the administration of this contract, or
(a) The Contracting Officer may, at any time, by written order to the Contractor, require the Contractor to stop all, or any part, of the work called for by this contract for a period of 90 days after the order is delivered to the Contractor, and for any further period to which the parties may agree. The order shall be specifically identified as a stop-work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage. Within a period of 90 days after a stop-work order is delivered to the Contractor, or within any extension of that period to which the parties shall have agreed, the Contracting Officer shall either—
(1) Cancel the stop-work order; or
(2) Terminate the work covered by the order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.
Protect your company and survive through the quarantine. Speak with your COR early and work with them to ensure your success.