What Federal Contractors Need to Know About Coronavirus and Preparing for a Government Shutdown

Whether its television, radio, print, or social media, I know you are aware of how quickly the Coronavirus (COVID-19) is spreading throughout the USA and across the globe. The Center for Disease Control (“CDC”) is warning of an imminent outbreak in the United States, and now is the time to take measures to put in place a contingency plan for a federal shutdown. There are no easy answers, due to the unpredictability of disease dynamics, a lack of relevant prior experience, and the absence of plug-and-play instructions from federal or local government.

Planning for this disruption involves crisis planning and response, recovery strategy, post-recovery strategy, and finally, reflection and learning. This process must be fast — and CEO-led — to avoid getting stuck in chaos and disorganized internal coordination processes and being slow to react to changing circumstances.  Unlike any other disease, the coronavirus has created a few significant challenges for federal contractors and private employers. Here are a few considerations to anticipate and be ready with a contingency plan:

Work Stoppage

Coronavirus is likely to create performance issues for contractors.  The disease has created significant interruptions in global supply chains, and may soon decrease the availability of employees in the U.S.  In addition to the risk to financial performance, the inability to perform on contractual obligations may cause reputational harm to federal contractors, making it difficult for companies to do business with the government in the future.

Implementing a Contingency Plan

Here are some steps to consider for your contingency plan:

  • Develop a communications strategy to share vital information.
  • Review or implement a plan to help employees work remotely and succeed in this type of work environment.
  • Help your leaders to lead and manage employees who are assigned to work remotely.
  • Set clear metrics-based performance expectations for remote employees.
  • Set up coaching and support to help remote employees to adapt to work disruptions and changes.
  • Identify job-candidate attributes needed to successfully work remotely.
  • Help remote staff feel “connected” to the company and other co-workers.

The Federal Acquisition Regulation (“FAR”), contain their own provisions for excusable delay.  The following information is provided from the FAR for guidance:

FAR 52.249-14 Excusable Delays (APR 1984)

(a) Except for defaults of subcontractors at any tier, the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or of the public enemy, (2) acts of the government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor. Default includes failure to make progress in the work so as to endanger performance.

(b) If the failure to perform is caused by the failure of a subcontractor at any tier to perform or make progress, and if the cause of the failure was beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be deemed to be in default, unless –

(1) The subcontracted supplies or services were obtainable from other sources;

(2) The Contracting Officer ordered the Contractor in writing to purchase these supplies or services from the other source; and

(3) The Contractor failed to comply reasonably with this order.

(c) Upon request of the Contractor, the Contracting Officer shall ascertain the facts and extent of the failure. If the Contracting Officer determines that any failure to perform results from one or more of the causes above, the delivery schedule shall be revised, subject to the rights of the government under the termination clause of this contract.


Renzie Richardson is the CEO of BHFL Group. She is a business coach and specializes in helping federal contractors navigate H.R. matters that impact their business.

For more information about BHFL Group, go to https://bhflgroup.com or call (800) 798-6186.

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