UPDATE: As of January 29, 2025, the Trump Administration appears to have rescinded OMB Memo M-25-13 ordering a temporary pause on federal financial assistance activities and disbursements.
OMB Memorandum (M-25-13) advises federal agencies that they must temporarily pause all activities and disbursements of federal financial assistance that may be implicated by any of President Trump’s recent Executive Orders at 5:00 p.m. Eastern Time today, January 28, 2025.
Once again, the threat of a government shutdown looms over federal contractors and grantees. If Congress does not pass a continuing resolution or other funding legislation before midnight on Saturday, agencies will lack authorized appropriations to fund their operations. Although regrettable, the risk of a shutdown (or debt ceiling crisis) has been a fairly common occurrence over the last few years.
The ongoing debt ceiling negotiations are approaching the “X Date” with little certainty of a resolution. The X Date, the date on which the U.S. Government runs out of money to pay all of its bills, is estimated to be June 1. Failing to raise the debt ceiling by that date would be unprecedented and, by most accounts, would have dire consequences for the economy.
Punctual people often live by the maxim: “If you’re early, you’re on time. If you’re on time, you’re late.” When submitting electronic proposals under FAR 52.212-1, those are words to live by. Even if you submit your electronic proposal on time, and even if it reaches government servers before the proposal deadline, it might still be considered late if it gets caught in the agency’s spam folder or email quarantine.
Bias is a frequent bid protest argument, but it is often unsuccessful because government officials are presumed to act in good faith. To overcome that presumption, a protester must provide “convincing proof” of the alleged bias. A protester cannot rely on inference or supposition alone as evidence of a government official’s unfair or prejudicial motives.
In today’s world, there is a tendency to believe that everything must be preserved forever. The common belief is that documents, emails, text messages, etc. cannot be deleted because doing so may be viewed as spoliation (i.e., intentionally destroying relevant evidence). A party guilty of spoliation can be sanctioned, which can include an adverse inference that the lost information would have helped the other side. But that does not mean that contractors have to preserve every conceivable piece of information or data under all circumstances. There are key differences between routine document destruction (when done before receiving notice of potential claims or litigation) and spoliation.
The automatic stay of award is one of the key elements of a bid protest under the Competition in Contracting Act. The CICA stay is only available when a protest is filed no later than ten days after contract award or no later than five days after a debriefing. In the 2018 NDAA (Section 818), Congress introduced the enhanced debriefing process for DoD procurements. It allows disappointed offerors to submit follow-up questions within two business days after a debriefing. It also extends the protest deadline until those questions are answered. But what if the contractor does not have any additional questions? Does the two-day period to submit questions extend the protest deadline for purposes of the CICA stay?
The Federal Circuit answered this question in NIKA Technologies, Inc. v. United States, Case No. 2020-1924 (Feb. 4, 2021). If a contractor does not submit follow-up questions after a debriefing, it does not get the benefit of the two-day question period for purposes of the CICA stay.
Have you received a Section 889 letter yet? If not, you may soon. The letters ask whether you provide or use “covered telecommunications equipment or services.” They are part of the implementation of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (the 2019 NDAA), which has two phases. The first phase started in August 2019 but has a limited scope. The second phase—which started in August 2020—is much broader and raises a lot more questions. This article answers some of those questions and provides some tips on how to comply.
Keep in mind that Section 889 is still being implemented. Much of this analysis is based on interim rulemakings at 85 F.R. 42665 and 85 F.R. 53126. Final rules may change based on public comments.
We previously looked at whether the COVID-19 pandemic is an excusable delay that would give contractors relief from delivery deadlines and schedule commitments. But many contractors impacted by Coronavirus may see their costs of performance increase due to agency instructions intended to control the spread of the virus. Today we review potential avenues for recovering those costs.
The first potential avenue for recovering Coronavirus impact costs is the recently passed CARES Act (Pub. L. 116-136). Section 3610 of the CARES Act allows agencies to reimburse contractors for paid or sick leave costs that they incur to pay their employees when a site is impacted by Coronavirus. This reimbursement authority applies where (i) employees or subcontractors are unable to perform work on a federally approved site “due to facility closure or other restrictions;” and (ii) those employees or subcontractors cannot telework because their duties cannot be performed remotely.
But this reimbursement authority is subject to some very specific limitations. First, the CARES Act does not require that agencies reimburse these costs. It just gives agencies discretion to do so and allows them to use any available appropriations. Contractors seeking reimbursement under this avenue will need to affirmatively request reimbursement and provide the agency with compelling reasons to exercise its discretion.
Second, the agency’s reimbursement authority is limited to “the minimum applicable contract billing rates not to exceed an average of 40 hours per week,” and is only for leave that is paid by the contractor to “keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contract personnel.”
Third, any reimbursements received pursuant to § 3610 of the CARES Act must be reduced by the amount of payroll tax credits the contractor is allowed under Division G of the Families First Coronavirus Response Act (Pub. L. 116-127).
On April 9, 2020, the Office of the Under Secretary of Defense for Acquisition and Sustainment issued Implementation Guidance for § 3610 of the CARES Act. The guidance emphasizes the need for documentation to show how leave costs are “identified, segregated, recorded, invoiced, and reimbursed.” It also notes that implementation will vary based on the contract type and suggests creation of a separate line item (or series of line items) to track CARES
§ 3610 costs.
The spread of COVID-19 (Coronavirus) remains unclear, but its impacts are already being felt. Supply chains are being disrupted and companies are implementing preventative measures to protect their employees. Many businesses have already suspended non-essential travel, encouraged remote working arrangements, and advised employees to follow the Centers for Disease Control risk-reduction strategies. Given these delays and disruptions, it’s logical to wonder: Are delays or impacts related to the Coronavirus an excusable delay?
The answer is yes, if you can prove it. Below we outline the standard contract clauses dealing with delays from epidemics and discuss how courts have interpreted those clauses in the past when contractors claimed their delays should be excused due to an epidemic.