Defense Department leaders and agencies have been granted much-needed flexibility to respond to the coronavirus pandemic.  Last week, Under Secretary of Defense for Acquisition & Sustainment Ellen Lord delegated approval authority for Other Transaction Agreements (“OTs”) related to the coronavirus response, consistent with Section 13006 of the CARES Act.
Continue Reading Other Transaction Authorities Given Greater Flexibility to Foster Innovation in Coronavirus Response

The Fourth Circuit recently rejected a trial court’s ruling that a contractor’s mandatory disclosure submission waived its attorney-client privilege over the underlying internal investigation. In re Fluor Intercontinental, Inc., No. 20-1241 (Mar. 25, 2020) (per curiam). The court granted Fluor’s mandamus petition and directed the district court to vacate its orders requiring Fluor to produce privileged information from its internal investigation relating to the subject matter of four statements in its mandatory disclosure submission. Id. at 1. In doing so, the Fourth Circuit confirmed that “Government contractors should not fear waiving attorney-client privilege” when making mandatory disclosures. It also curtailed an outlier ruling and provided reassurances to other corporations and individuals who routinely make similar disclosures and fact proffers to the government.
Continue Reading Have No Fear: Fourth Circuit Confirms Contractors Shouldn’t Fear Privilege Waivers When Making Mandatory Disclosures

Contractors sidelined by facility closures and stay-at-home orders in the wake of the COVID-19 pandemic may now have a new pathway to recovering idle labor costs.  The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act includes a provision, Section 3610, that provides a new form of relief for contractors facing delays and additional costs as a result of employees being unable to work due to quarantine restrictions.
Continue Reading CARES Act Includes New Route to Recovery for Contractors Affected By COVID-19

The Department of Health and Human Services published a notice on March 30, 2020 — effective March 25, 2020 — designating certain COVID-19-related personal protective equipment (“PPE”) and materials as “scarce” or “threatened” materials subject to the Defense Production Act’s (“DPA”) anti-hoarding provisions.  As a result of this notice, the DPA now prohibits the accumulation of these materials in excess of reasonable demands of business, personal, or home consumption.  The notice also results in a prohibition of the accumulation of these materials for the purpose of resale at prices in excess of the prevailing market rate.
Continue Reading Defense Production Act Anti-Hoarding Provisions Invoked for Coronavirus

Following up on our post earlier this week giving a general overview of the Defense Production Act of 1950 (“DPA”), 50 U.S.C. §§4501 et seq., this post comments on President Trump’s March 18, 2020 Executive Order on Prioritizing and Allocating Health and Medical Resources to Respond to the Spread of COVID-19 (the “COVID-19 E.O.”) and provides some key considerations that companies should keep in mind if they are concerned about receiving prioritized or rated contracts or allocation orders or directives under the DPA.
Continue Reading The Defense Production Act and the Coronavirus Executive Order: Key Considerations

As a result of novel Coronavirus (SARS-CoV-2) and COVID-19, federal and state governments have a sudden and unanticipated need for more goods and services.  Some of those goods and services are highly specialized and specific to Coronavirus and COVID-19.  But governments also have an increased and urgent need to buy otherwise-routine goods and services that have become newly critical in the wake of COVID-19.

All of this means that there are and will be procurements where speed is the priority, and where there is no time for the normal pace and cadence of the procurement process and contract formation.  It also means that resources necessarily will get taken away from routine procurement tasks and reallocated to urgent matters.

Here are a few things to watch for:Continue Reading The Likely Effects of COVID-19 on Contract Awards and Contract Formation

On March 13, the President declared a national emergency in response to the COVID-19 pandemic.  Doing so activated the authorities available to the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121-5207 (the “Stafford Act”) to provide federal assistance to state and local governments responding to the emergency, including financial assistance.

The federal assistance is coordinated and provided through the Federal Emergency Management Agency (“FEMA”) under the National Response Framework.  Although the Stafford Act generally does not make funding directly available to private businesses, a large portion of the nearly $50 billion that the President said will be available to FEMA may be used to procure goods and services from contractors assisting the relief effort.Continue Reading State of Emergency: COVID-19, the Stafford Act, and What It All Means for Contractors

As federal agencies adjust their worksites to the realities of the COVID-19 pandemic, these changes will likely have a direct impact on government contractors and their employees who work at those sites.  If the government closes or reduces operations at a site, a contractor may be forced to furlough or reduce the hours of employees.  Some reduction actions could result in an employee who was exempt from overtime payments under the Fair Labor Standards Act (“FLSA”) being reclassified as non-exempt, which would require the employer to pay the employee overtime wages, with negative long-term repercussions.

An employee may volunteer to reduce her salary for any period of time without any FLSA consequences so long as her decision is completely voluntary.  To the extent the employer must impose involuntary reductions on an exempt employee, the following options are available that should not result in the employee being reclassified as non-exempt under FLSA:Continue Reading FLSA Considerations In Response to Government COVID-19-Related Directions

As the fallout from COVID-19 continues, federal contractors in every industry are seeing significant impacts on their ability to perform, ranging from scheduling delays to supply chain interruptions and increased costs of performance.  We previously addressed the rules and regulations governing excusable delays, which permit a contractor to avoid default if a failure to perform arises from causes beyond its control.  This next post addresses key FAR provisions that may entitle a contractor to a price adjustment or other recovery due to changes in contract requirements as a result of the pandemic.
Continue Reading Can I Recover the Added Costs of Work Caused by COVID-19?

As a followup to our recent post on the implications of the PREP Act for government contractors working to respond to the COVID-19 outbreak, this post will provide an overview of the Defense Production Act—including its key powers that the federal Government might invoke to counter the pandemic.
Continue Reading A Coronavirus Contractor’s Guide to the Defense Production Act