As our nation confronts the COVID-19 virus unleashed on the planet, we all must remember and recommit to the values and spirit that enabled us to overcome existential threats in the past. To this end, we, as citizens, have been asked to do our part by limiting our social interaction and maximizing the use of telework in order to blunt the spread of the virus. The government, too, has stepped up, with the declaration of a National Emergency and the mobilization of the federal government. A key feature of this mobilization will be the federal coordinated emergency assistance and launching of the National Coronavirus Task Force to coordinate federal activities and work with leadership in the states.
As we all pull together to serve our government and citizens, it is important to highlight some of the key contracting authorities and tools that can be leveraged at this critical time.
FAR Part 18 for an Index of Emergency Acquisition flexibilities
Following Hurricane Katrina, the Government found that many officials were unfamiliar with the emergency flexibilities provided throughout the FAR. As a result, FAR Part 18 Emergency Acquisitions was published in 2006 which provides an index of the emergency flexibilities available to agencies in one place. See https://www.acquisition.gov/content/part-18-emergency-acquisitions. We encourage everyone to take a look at this FAR part, as it serves as an index to the acquisition flexibilities available to the government to meet mission needs. In addition, below is a list of some of the most critical flexibilities available to the government.
The Competition in Contracting Act
The Competition in Contracting Act (CICA) provides a number of exceptions to the normal full and open competition requirements associated with fulfilling the government’s needs via contract. Referred to as “(c)(7) exceptions,” they permit agencies to use other than competitive procedures, such as sole or limited source contract awards.
Particularly important in the context of this national emergency is the “urgent and compelling” exception to full and open competition. Departments and agencies are, and will be using, this authority to streamline the process to meet urgent needs. This authority provides that, when the Government’s need for supplies and services is of an “unusual and compelling urgency,” full and open competition is not required under FAR Part 6.302-2. Written justification and approval of such an action may also take place after contract award if it would unreasonably delay the acquisition. Contracts using these procedures may not exceed one year unless approved by the agency head.
Defense Production Act
Recently invoked by President Trump, the Defense Production Act (DPA), among other things, permits the President to allocate facilities, services, and materials in furtherance of national defense. Orders for such items (so-called rated orders) can be issued to entities under government contracts or to entities that do not hold a government contract. Companies receiving such orders must give them priority and cannot engage in price gouging or other discriminatory practices against agencies. Under this process, companies may be called upon to reserve items in anticipation of orders; change production (increase or decrease) to free-up materials for use elsewhere; or allocate a fixed amount of materials as directed by the government.
The Defense Priorities and Allocations System (DPAS) is administered by the Department of Commerce. FAR Subpart 11.6 outlines the basics of the use of rated orders under the system. In addition, 15 CFR 700 implements the DPAS providing the management framework for the system. The Coalition encourages members to review these regulations as well as the Department of Commerce DPAS webpage, which contains links to DoD, DoE, and GSA regarding their operations and use of rated orders.
The Coalition will be hosting a webinar with Holland & Knight’s David Black and Eric Crusius focusing on the what contractors need to know about the Defense Production Act and rated orders. You can register here for this complimentary webinar.
Stafford Disaster Relief and Emergency Assistance Act
The Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) provides for federal assistance to state and local governments aiding citizens during national disaster/emergencies. Under the act, the President is authorized to assist via relevant agencies (e.g., FEMA) in disaster preparedness with technical, communications, and other assistance. Where the nature of a disaster/emergency exceeds states’ capabilities to respond, or where circumstances are such that the disaster involves matters of federal responsibility, the President may declare a National Emergency and utilize disaster relief funds to assist affected states.
Increased Acquisition Thresholds
Using the authority in FAR 18.202, the heads of agencies can make determinations to raise acquisition thresholds in order to support response to a national emergency. Using this authority, agencies can increase the Micro-Purchase Threshold (MPT) from $10,000 to $20,000 (if the contract is awarded and performed inside the United States) and $30,000 (if the contract is awarded and performed outside the United States); the Simplified Acquisition Threshold (SAT) from $250,000 to $750,000 (U.S.) and $1.5 million (outside the U.S.); and the threshold for the use of simplified acquisition procedures for certain commercial items from $7 million to $13 million.
Currently, the Department of Veterans Affairs and the General Services Administration have issued determinations for these revised thresholds. The Coalition will continue to monitor which agencies have implemented these thresholds and provide that information to members.
|Threshold||Current Level||Increased Threshold for National Emergency|
|$30,000 (outside the U.S.)|
|Simplified Acquisition Threshold||$250,000||$750,000|
|$1.5 million (outside the U.S.)|
|Simplified Acquisition Procedures for Certain Commercial Items||$7 million||$13 million|
It is important to note that the increases in the MPT and the SAT also serve to further streamline the GSA and VA Federal Supply Schedule ordering procedures. Now, ordering activities can order directly from one Federal Supply Schedule contractor for any order up to $20,000 while the streamlining ordering procedures for orders above the MPT and below the SAT apply up to $750,000.
Federal Supply Schedules
Emergency flexibilities also apply to Government orders under the Federal Supply Schedules program in response to the COVID-19 national emergency.
- State and Local Governments eligible to order from the Schedules under GSA Disaster Purchasing Program
Because the President has issued a Stafford Act national emergency, state and local governments are eligible to order supplies and services from the Federal Supply Schedules program to support responses to the public health emergency. This authority applies to both GSA and VA Schedules. 40 U.S.C § 502 (c) offers the following definition of state or local government:
“The term, ‘State or local government’ includes any State, local, regional, or tribal government, or any instrumentality thereof (including any local educational agency or institution of higher education).” Educational Institutions include;
– Local elementary, middle and high schools operated by public school boards,
– Charter school programs that are chartered and operated by local school authorities and provide free public education,
– Public or non-profit nationally accredited or recognized colleges, and
– Universities that provide at least a 2-year program that offers a degree or offers credit toward such a degree.
For more information about GSA’s Disaster Purchasing Program, click here.
- Cooperative Purchasing Program for IT, Security, and Law Enforcement
As a reminder, state, local, and tribal governments (as defined above) are allowed to purchase IT, security, and law enforcement products and services at any time through the Cooperative Purchasing Program. State and local governments may order under Cooperative Purchasing from IT Schedule 70 and Schedule 84 Total Solutions for Law Enforcement. For more details about Schedule offerings available under the program, click here.
- GSA Advantage!
GSA is promoting the availability of its Disaster Relief and Pandemic Products aisle on GSA Advantage! for quick access to a full range of disaster and emergency related supplies, equipment and services. Schedule contractors with associated products will want to be sure to have their offerings available to agency customers through this resource.
- Streamlined Ordering Procedures
The following contracting flexibilities are also in place to meet the urgent needs of Federal agencies in response to COVOD-19:
- Increase in ordering Procedure Thresholds
As noted above, the increases in the MPT to $20,000 and the SAT to $750,000 further streamline ordering for customer agencies using the GSA and VA Federal Supply Schedules.
- Urgent and Compelling Need
Consistent with FAR Part 6.302-2, FAR 8.406-6(a)(1)(i)(A), provides that Federal agencies may limit/restrict consideration sources for the placement of order where an urgent and compelling circumstance exists, and following the ordering procedures would result in unacceptable delays. This authority can be used to place orders and establish BPA exceeding the MPT.
It is vitally important for contractors to be prepared, i.e., have current information on product/service availability. You will likely be getting calls for urgently needed items. In addition, one of the strengths of the Federal Supply Schedules is the ability for customer agencies to rapidly acquire products and services at fair and reasonable prices.
The Coalition is committed to continuing to provide members with critical information about the Federal Government’s operations, its contracting programs, and future requirements as agencies respond to the COVID-19 pandemic. A list of Resources for Contractors on COVID-19 has been posted on the Coalition website and will be updated on an ongoing basis in the coming months. In addition, this week we hosted a “Federal Contractors’ COVID-19 Survival Guide Webinar” with Sheppard Mullin. In case you missed it, a recording of the presentation is available to members here.
Finally, again, given the President’s announcement to invoke the Defense Production Act, we will be hosting a “DPAS Rated Orders – What Businesses Need to Know” webinar with Holland & Knight that will cover information about contractors’ obligations, rights, and remedies upon receipt of a DPAS-rated order next Tuesday afternoon. For more details on the March 24th webinar, click here.
We are all in this together, and at the Coalition, we will continue to work to meet the needs of the contracting community and support the Government’s response in these challenging times.