The COVID-19 pandemic has had wide-ranging health, social and economic impacts. What started in December 2019 as a crisis constrained to Wuhan, China, has spread to every continent except Antarctica. All 50 U.S. states and the District of Columbia have confirmed cases of COVID-19 and, as of the time of publication, more than 44,000 cases of COVID-19 have been reported in the U.S. While governments and public health organizations attempt to contain the virus and develop a vaccine or treatment, millions of people across the world are being quarantined to avoid further spreading the virus. Non-essential international travel has been severely restricted, and many U.S. states and cities have imposed lockdowns and implemented other public health and safety measures, including prohibiting public gatherings. See Proclamation on the Suspension of Entry as Immigrants and Nonimmigrants of Certain Additional Persons Who Pose a Risk of Transmitting Coronavirus, www.whitehouse. gov/presidential-actions/proclamation-suspensionentry-immigrants-nonimmigrants-certain-additional-persons-pose-risk-transmitting-coronavirus-2/. Conferences and other large public events have been cancelled, schools have closed, and many companies have encouraged or required employees to work from home. The Office of Management and Budget has directed federal agencies to "adjust operations and services to minimize face-to-face interactions," including the reduction of non-essential services and, in some cases, mandatory telework for federal employees. See Federal Agency Operational Alignment to Slow the Spread of Coronavirus COVID-19, www.whitehouse. gov/wp-content/uploads/2020/03/M-20-16.pdf. International shipping has declined as manufacturing in many countries—particularly China—has slowed.
In the modern global economy, these developments will have serious short-term (and likely long-term) impacts on all businesses, including Government contractors. Contractors must prepare for and mitigate the impacts of performance delays and business disruptions due to workforce illness, facility closures, travel restrictions, and domestic and international supply chain issues, among other threats. Prudent steps include assessments of continuity plans, workforce telecommuting policies, current insurance coverage, alternative suppliers, and the threats to performance and how to mitigate them.
Some business disruption mitigation considerations are unique to U.S. Government contractors. For example, contractors should:
- Review the contingency plans and directives of their customer agencies. See, e.g., Department of Homeland Security (DHS) Memo from the Chief Procurement Officer to the DHS Contractor Community, March 5, 2020, beta.sam. gov/;
- Update any applicable Mission Essential Contractor Services Plans required by Defense Federal Acquisition Regulation Supplement (DFARS) 252.237-7023 as necessary;
- Identify any other contract clauses requiring close coordination with Government customers in connection with any business disruptions (e.g., whether contracting officer approval is required to substitute a supplier or material) and implement plans for compliance;
- Identify any rated order requirements (and reaffirm those to suppliers); and
- Document all disruptions and mitigation efforts and segregate related costs.
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Originally published by The Government Contractor®
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