pearsonBy Tracy Pearson

Pearson is a Senior Associate at Dunlap Bennett & Ludwig’s Wilmington, DE Office

The Office of the Undersecretary of Defense has released guidance to Department of Defense (“DoD”) contractors acknowledging that the Coronavirus (COVID-19) pandemic has impacted the performance of many DoD contracts.

There are provisions in most DoD Contracts, in some form or another, that address when a party is unable to perform due to an “excusable delay.” This type of provision is designed to protect the contractor who is unable to perform their contractual obligations. A contractor will not be in default of their obligations if the circumstances are such that are beyond the control of the contractor and not as the result of fault, cause or negligence of the contractor. Under these circumstances, a Contractor may request an equitable adjustment of the contract schedule. Changes to contract performance may be requested due to a COVID-19 related impact, including but not limited to contractors who cannot access worksites, or have employees who are unable to work due to quarantine and state and local restrictions on travel.

Requests for an equitable adjustment will be considered by the DoD on a case-by-case basis. Some factors that will be considered include a) particulars of each contract; b) laws, regulations and guidelines passed in response to COVID-19 impact; and c) whether the requested costs are allowable and reasonable to protect the health and safety of contract employees.

Requests for equitable adjustments should not negatively prejudice the performance ratings of the contractor. To address the Coronavirus pandemic, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed into law on March 27, 2020. Notable in this Act is Section 3610, which pertains to Federal Contract Authority and provides discretion of the agency to modify terms and conditions of the contract, specifically for federal contractors and their employees who are unable to access worksites or able to telework, but must have employees maintain readiness. While this Section does not provide specific guidelines, the Office of Management and Budget and many Military Departments and Agencies are in the process of drafting guidelines for implementation.

At DBL, our experienced attorneys have extensive knowledge of Federal Government Contracting. If COVID-19 has impacted the performance of your federal contact and you need immediate relief, we are here to help you navigate your rights under the CARES Act and PPP loan process. Contact us today at clientservices@dbllawyers.com or call us at 800-747-9354.

Posted in: Government Contracts