{"id":19647,"date":"2020-03-24T20:48:04","date_gmt":"2020-03-24T20:48:04","guid":{"rendered":"https:\/\/one.sightlinemg.com\/federaltimes\/uncategorized\/2020\/03\/24\/federal-contractors-face-great-uncertainty-as-coronavirus-spreads\/"},"modified":"2026-08-08T04:49:53","modified_gmt":"2026-08-08T04:49:53","slug":"federal-contractors-face-great-uncertainty-as-coronavirus-spreads","status":"publish","type":"post","link":"https:\/\/one.sightlinemg.com\/federaltimes\/govcon\/contracting\/2020\/03\/24\/federal-contractors-face-great-uncertainty-as-coronavirus-spreads\/","title":{"rendered":"Federal contractors face great uncertainty as coronavirus spreads"},"content":{"rendered":"\n

To stop the spread of the new coronavirus, federal agencies could shutter facilities. States and localities are already issuing shelter-in-place orders. And with obscure rules surrounding telework for federal contractors as well as the potential for supply chain disruptions and employee infections, there could be a new level of unpredictability for the contractor community.<\/p>\n\n\n\n

\u201cThere\u2019s both a little bit of stability and a fair amount of uncertainty,\u201d said Alan Chvotkin, executive vice president and counsel at the Professional Services Council, an interest group representing more than 400 government contractors.<\/p>\n\n\n\n

\u201cThings that were normal yesterday are not normal today. Behaviors that were planned for over the last couple days have been changed as government missions are changing,\u201d he added.<\/p>\n\n\n\n

In the near term, schedules laid out in contracts will likely experience delays and costs may increase due to disruptions caused by COVID-19, said Jonathan Aronie, head of law firm Sheppard Mullin\u2019s government contracts practice group. These disruptions could be caused by employees not coming into work, or their suppliers\u2019 employees not working.<\/p>\n\n\n\n

President Donald Trump said March 18 that he\u2019s willing to use the Defense Production Act to force companies to manufacture goods the government needs to fight the virus, like ventilators or masks. These orders become \u201crated,\u201d essentially allowing the government to skip to the front of the line.<\/p>\n\n\n\n

That poses other challenges.<\/p>\n\n\n\n

\u201cWhile some companies are going to have problems that are slowing them down, other companies are going to have the problems associated with an influx of new orders,\u201d Aronie said.<\/p>\n\n\n\n

\"\"
(eclipse_images\/Getty Images)<\/figcaption><\/figure>\n\n\n\n

Aronie warned of a complex web of orders that companies could have to fulfill, pulling businesses in different directions. For example, he said, companies could get an order from a hospital, an order from a state government with a preexisting contract, and then a rated order from the federal government as well as agencies without rated authorities \u2014 potentially overwhelming and confusing manufacturers.<\/p>\n\n\n\n

\u201cSomehow you\u2019re going to have to make sense of this all,\u201d Aronie said.<\/p>\n\n\n\n

Effects of telework <\/b><\/p>\n\n\n\n

Across the government, federal employees eligible for telework have generally been allowed to do so. But contractors haven\u2019t always followed the same rules. Not allowing contractors to telework could have significant ramifications, experts warned. Many contractors are required by their contracts to work in government facilities. But to stop the spread of COVID-19, access to these facilities could be limited or completely shut off.<\/p>\n\n\n\n

This conundrum leaves contractors with questions for the government.<\/p>\n\n\n\n

\u201cAre there going to be access issues? Are contractors going to be asked in some cases to work from home where previously they were going into a government facility? What does that mean from a performance perspective? What does that mean from a cost perspective? How do you work that out with the government?\u201d said Roger Waldron, president of the Coalition for Government Procurement. \u201cThese are some of the thing people are thinking about.\u201d<\/p>\n\n\n\n

On March 20, the Office of Management and Budget\u2019s deputy director for management, Margaret Weichert, released a memo urging agencies to \u201cmaximize telework for contractor employees.\u201d But, as reported by Federal News Network<\/a>, Weichert\u2019s memo did not mandate telework for federal contractors, leaving industry frustrated.<\/p>\n\n\n\n

Several interest groups that represent government contractors called on congressional leaders and the White House to allow contractors to work from home. PSC wrote a letter to OMB on March 18<\/a> warning that not issuing guidance regarding extending telework flexibility to contractors could lead to layoffs.<\/p>\n\n\n\n

\"\"
Office of Management and Budget Deputy Director for Management Margaret Weichert speaks at a Sept. 30 ceremony retiring the National Background Investigation Bureau and celebrating the transfer of its functions to the Department of Defense. (Petty Officer 2nd Class James K. Lee\/U.S. Defense Department)<\/figcaption><\/figure>\n\n\n\n

\u201cThe duration of this is a huge uncertainty, if it does get worse before it gets better, if folks are really unable to perform the kind of work that need to be done at some government locations, that\u2019ll have some impact on people,\u201d Chvotkin told Federal Times.<\/p>\n\n\n\n

Over the last few days, several states such as California and New York have begun following shutdown orders that could leave contractors in tenuous positions. A Justice Department memo from March 20 also directed U.S. attorneys general to tell state and local officials that federal employees must be allowed to travel and commute, \u201ceven when travel restrictions are in place.\u201d This action didn\u2019t mention contractors either.<\/p>\n\n\n\n

State governments are going to have to \u201crecognize that exceptions are going to be essential and some federal missions are just going to be so important to continue on that they\u2019ll have to accommodate them,\u201d Chvotkin said.<\/p>\n\n\n\n

How does this compare to the government shutdown? <\/b><\/p>\n\n\n\n

This is the second consecutive year that contractors have faced challenges due to a crisis; last year\u2019s was the record 35-day government shutdown.<\/p>\n\n\n\n

Some aspects of the 2019 shutdown and the coronavirus crisis are the same. For example, Aronie said, both increase delays and incur higher costs on contractors. The big difference is that some companies will receive more work, instead of less.<\/p>\n\n\n\n

Another significant difference is that employees, both from the federal government and contractors, are still working \u2014 many federal employees from home.<\/p>\n\n\n\n

This increase in telework has increased agencies\u2019 demands for IT infrastructure as they work to accommodate the rise in telework. Last week, the White House requested several billion dollars for agencies to improve their IT infrastructure.<\/p>\n\n\n\n

Under the COVID-19 pandemic, the uncertainty is greater than during a government shutdown, experts said, because the ending was solely in the hands of the government.<\/p>\n\n\n\n

\u201cEven in the shutdown \u2026 everybody recognized that it was going to end sooner or later. It was under both the congressional and presidential control to bring an end to it \u2014 not so here,\u201d Chvotkin said. \u201cThere\u2019s nobody who can just decree that the coronavirus has been cured.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

The pandemic spread and response is evolving fast, leaving federal contractors unsure of what could happen 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