Federal Times: Federal contractors face great uncertainty as coronavirus spreads

“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…”

“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’s government contracts practice group. These disruptions could be caused by employees not coming into work, or their suppliers’ employees not working.”

“President Donald Trump said March 18 that he’s 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 ‘rated,’ essentially allowing the government to skip to the front of the line.”

“That poses other challenges…”

Effects of telework

“Across the government, federal employees eligible for telework have generally been allowed to do so. But contractors haven’t 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…”

“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 warning that not issuing guidance regarding extending telework flexibility to contractors could lead to layoffs…”

How does this compare to the government shutdown?

“This is the second consecutive year that contractors have faced challenges due to a crisis; last year’s was the record 35-day government shutdown.”

“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.”

“Another significant difference is that employees, both from the federal government and contractors, are still working — many federal employees from home.”

“This increase in telework has increased agencies’ 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.”

“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…” Read the full article here.

Source: Federal contractors face great uncertainty as coronavirus spreads – By Andrew Eversden, March 24, 2020. Federal Times.

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