covid 19 part deux - amazon web services...revise provisional billing rates (pbrs) and/or forward...

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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

More on this one

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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Memo






Memo




Memo




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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Memo






Memo




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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Memo






Memo




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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Memo






Memo




Memo





Considerations

US Navy Memo

• No special COVID clauses• Standard FAR clauses will be sufficient for processing any changes

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Memo






Memo




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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Memo






Memo




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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Memo






Memo




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


Memo






Memo




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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Memo






Memo




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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Questions?

• Contact us:• [email protected]

• [email protected]• [email protected]

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covid 19 part deux - amazon web services...revise provisional billing rates (pbrs) and/or forward...

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