covid 19 part deux - amazon web services...revise provisional billing rates (pbrs) and/or forward...
TRANSCRIPT
PCI · 1725 I Street NW, Suite 100 · Washington, DC 20006 · (202) 775-7240 1
COVID‐19PartDeuxNavigating the Plethora of Guidance and
Information
InstructorsBrent Calhoon, Jennifer Flickinger, and Phillip Seckman
Agenda
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• Recap• Latest Guidance
• Impact• Details
• Small Business Administration• Q&As, Advice, and Actions We’ve Seen
Previously on…COVID-19 and Government Contracting
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Communicate early and often.
Present options and solutions
Establish frequent recurring meetings.
Stay alert for changes unrelated to direction
from government customers.
Establish new project/timekeeping
codes
Evaluate impacts of on different segments of
your company’s workforce.
Take reasonable steps to mitigate costs.
Revisit (or create!) policies and procedures
Evaluate your company’s IT
infrastructure.
Evaluate impacts to your suppliers and subcontractors.
Revise provisional billing rates (PBRs)
and/or forward pricing rates (FPRs)
Keep your cognizant ACO and auditor in the
loop, too!
Document, Document, Document!
Balancing Safety and Performance
Preliminary Guidance and Memoranda
Triage Plan
Latest Guidance Firehose err, Timeline
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March 17•US Air Force Memo
March 19•Dept. of Homeland Security: CISA Memo
March 20•OMB Memo•USD DCMA Class Deviation•Under Secretary of Defense Memo•Dept. Of Navy Memo
March 24•US Army Memo
March 26•Dept. of Navy memo•US Air Force Memo
March 27•CARES Act•Under Secretary of Defense Memo•DCMA CID
March 30•Defense Pricing and Contracting Memo
https://www.acq.osd.mil/dpap/pacc/cc/COVID‐19.html
Let’s Digest by Matter of Impact
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High Impact: • Far reaching industry wide impacts • Specific regulatory impacts• Effects cash flows
Moderate Impact:• Isolated Industry impacts • Emphasizes existing regulatory aspects or
• Can impact cash flows
Lower impact: • Broad policy statements• Reemphasizes other guidance• No immediate impacts to industries / cash flows
March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting MemoFrom Last Week
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OMB :
“Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19)”• Agencies to be
communicating, flexible, using Stafford Act Authorities and “good business judgement.”
OMB :
“Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19)”• Agencies to be
communicating, flexible, using Stafford Act Authorities and “good business judgement.”
DHS:
“Identification of Essential Critical Infrastructure Workers During COVID-19 Response”• Identifies recommended
categories of Essential Critical Infrastructure
DHS:
“Identification of Essential Critical Infrastructure Workers During COVID-19 Response”• Identifies recommended
categories of Essential Critical Infrastructure
Under Secretary of Defense: “Defense Industrial Base Essential Critical Infrastructure Workforce”• Critical Infrastructure:
See DHS memo• “Dedicated to working
closely” with the industrial base to ensure workforce safety and the national security mission.
Under Secretary of Defense: “Defense Industrial Base Essential Critical Infrastructure Workforce”• Critical Infrastructure:
See DHS memo• “Dedicated to working
closely” with the industrial base to ensure workforce safety and the national security mission.
Under Secretary of Defense: “Class Deviation –Progress Payment Rates”• Increases to Progress
Payment Rates• 90% for large business
concerns• 95% for small business
concerns
Under Secretary of Defense: “Class Deviation –Progress Payment Rates”• Increases to Progress
Payment Rates• 90% for large business
concerns• 95% for small business
concerns
USAF:
“Department of the Airforce Mission Essential Activities during COVID-19”• See DHS Memo
USAF:
“Department of the Airforce Mission Essential Activities during COVID-19”• See DHS Memo
All of the memoranda above identify/reference mission essential activities and provide guidance to State and local authorities for consideration, however none are directive with the exception of the Class Deviation on Progress Payments. Government broadly adopting an equitable posture and encouraging solidarity.
Stay current: https://www.acquisition.gov/coronavirus
USD: DCMA Class Deviation• 2020‐O0010• Authorizes progress payments up to 90% for large business and 95% for small businesses
• Intent is to ensure contractors have adequate cash flow • DCMA also has stated that they have worked with DFAS to ensure that payments continue
• 2020‐O0011• Submission of interim vouchers under classified contracts• Contracting officers shall direct contractors to submit interim vouchers under classified contracts, using an appropriate method, directly to the disbursing office listed in the contract
• Interim vouchers under classified contracts are considered provisionally approved by the Defense Contract Audit Agency (DCAA)
• Contracting officers shall require contractors to follow all program security protocols and to continue to safeguard program information when submitting interim vouchers
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
Department of the Navy Memo
• States the importance of the defense industrial base and that goal is for them to emerge from this crisis
• Immediately reduce retentions to an absolute minimum• Pay all settled Requests for Equitable Adjustments (REAs) immediately• Settle all other REAs immediately and prepare provisional payments where appropriate
• Declares government personnel responsible for receiving, inspection, invoicing and payment to be mission essential
• Accelerate awards for future work
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
US Army Memo
• Less specific than Navy or Air Force memo• Stresses coordination with DCMA• Generally mirrors OSD Memo regarding flexibility
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
US Air Force Memo• Consider raising progress payments up to 95 percent for small businesses, and 90 percent for large businesses, and request permission to exceed these thresholds when needed.
• Consider reducing withholds down to 5 percent and request permission for below 5 percent on mandatory withholds when needed.
• Applies to UCAs as well
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
Considerations
US Navy Memo
• No special COVID clauses• Standard FAR clauses will be sufficient for processing any changes
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
Undersecretary of Defense
• Doing Business with the Government – Supporting the COVID response
• Provides potential new government contractors with the information they will need to do business with the government
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
CARES Act
• Permits Contracting officers to modify contracts of certain contractors to pay for an average of 40 hours a week of PTO to keep contract workforce available
• Applies to contractors who cannot perform work at a facility “approved” by the government due to closures or other restrictions and cannot telework because those duties cannot be performed remotely
• An average of 40 hours a week at minimum billing rates
• Must offset any tax credits from the Families First Corona Virus Response Act
• Through September 30, 2020• Authorizes Contracting Officers to Modify but does not require them to
• If you have workforce affected, immediately begin discussions
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
Defense Pricing and Contracting Memo• Recognizes that contractors working side‐by‐side with DoD may be unable to access worksites
• Recognizes and highlights FAR clauses where a contractor will not be in default if failures arise beyond the control of the contractor (baring any fault or negligence)• Contractors may be entitled to equitable adjustments of the contract schedule
• Recognizes a contractor’s potential entitlement to equitable adjustments where COs directs changes (may include specific COVID‐19 impacts)
• Directs review of REAs on a case‐by‐case basis taking into account impacts of COVID‐19, laws, regulations, and inclusive of any relief authorized by laws
• Directs COs to consider the allowability, allocability, and reasonableness of costs to protect the health and safety of employees as part of contract performance
• DPC to provide implementing guidance for Section 3610 of the CARES Act with regard to paid leave where contractor employees could not access work sites or telework but employees were needed to be kept in a ready state
• Signals (as expected) the possibility that the government will provide for schedule relief but may refuse to provide other cost relief, depending on contract type 14
March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
DCMA CIG Determination
• The Commercial Item Group issued a Determination that COVID response supplies or services are "commercial”
• In combination with FAR18 (national emergency declaration) and the OMB letter from last week, awards under $13M for associated COVID‐19 supplies and services can use simplified acquisition procedures
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March 17• US Air Force
Memo
March 19• Dept. of
Homeland Security: CISA Memo
March 20• OMB Memo• USD DCMA Class
Deviation• Under Secretary
of Defense Memo• Dept. Of Navy
Memo
March 24• US Army Memo
March 26• Dept. of Navy
memo• US Air Force
Memo
March 27• CARES Act• Under Secretary
of Defense Memo• DCMA CID
March 30• Defense Pricing
and Contracting Memo
Small Business Administration
• While much of what has been publicized focuses on SB loan programs, SBA’s website includes information on its focus on assisting with the continuity of operations for small business contracting programs and small businesses with federal contracts.
• 8(a) program participants should stay in touch with their Business Opportunity Specialist (BOS).
• If a situation occurs that will prevent small businesses with government contracts from successfully performing their contract, they should reach out to their contracting officer and seek to obtain extensions before they receive cure notices or threats of termination.
• The SBA’s Procurement Center Representatives can assist affected small businesses to engage with their contracting officer. Use the Procurement Center Representative Directory to connect with the representative nearest you:
https://www.sba.gov/federal‐contracting/counseling‐help/procurement‐center‐representative‐directory
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Date Source Impact
March 17 US Air Force Memo
March 19 Dept. of Homeland Security: CISA
March 20 OMB Memo
Undersecretary of Defense Class Deviation
Under Secretary of Defense Memo
Dept. of Navy Memo
March 24 US Army Memo
March 26 Dept. of Navy Memo
US Air Force Memo
March 27 CARES Act
Undersecretary of Defense
DCMA CID
March 30 Defense Pricing and Contracting
Guidance Wrap UP
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Q&As, Advice, and Actions
Tracking Costs
• Should we separately capture costs related to transitioning employees from onsite to teleworking?
• Can direct labor costs and indirect management costs related to these activities be recovered?
• What about ODCs like laptops and monitors?• How do contractors deal with ongoing work impacts?
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Rate impacts
• How should companies deal with impacts to PBRs/FPRPs?• Can T&M rates be renegotiated?
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Proposals and New Contracts
• What advice do you have for contractors who have pending proposals?
• What about proposals to be submitted?• How should contractors deal with pending or upcoming proposals in light of the pandemic?
• Will demanding such a provision render you non‐responsive?
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Supply Chain
• What supply chain impacts should the contractor consider?• If the government issues a "Stop Work Order" does the Prime have any contractual obligation to pay its subcontractors or Vendors during this Coronavirus work stoppage?
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Legal Issues in Recovery• What are the difference between force majeure clauses and REAs (excusable delay v. avenues for cost adjustments)?
• Based on contract type, how can the government provide relief of deny it?
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Terminations
• What recourses exist for a government contractor whose contract is canceled by a federal agency?
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Customer Communications
• Any best practices surrounding how to draft letters to customers when the full extent of the impact is unknown?
• How do you craft your letter to the CO in a way to prompt the CO to issue written direction?
• What should we include in the communication to allow the letter to support the argument that the change occurred at government direction?
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Clauses
• Are there any special terms and conditions that COs will include in new prime contracts (or Mods to existing contracts) for COVID‐19 requirements (Testing Kits, for example)?
• Do Contracting Officers have the right to add COVID‐19 requirements to an existing prime contract under authority of the Stafford Act?
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