OMB Issues COVID-19 Guidance for Government Contracts

March 24, 2020

On March 20, 2020, The Office of Management and Budget (OMB) provided executive agencies with guidance on how to address contracting issues related to COVID-19. The guidance was issued in the form of a memorandum entitled “Managing Federal Contract Performance Issues Associated with the Novel Coronavirus (COVID-19) and addresses the following subjects.

Teleworking: Agencies are encouraged to work with contractors to maximize the opportunity to telework and to consider modifying any contracts that prohibit telework.

Quarantines: If contract performance is adversely affected by quarantines, Agencies are advised to be as flexible as possible with the contractor to include adjusting schedules, implementing telework, or finding substitute personnel. In the event there are no acceptable options, Agencies should consider performance delays caused by quarantines to be excusable absences that would not negatively affect a contractor’s performance rating.

REAs: Agencies should consider Requests for Equitable Adjustments (REA) for COVID-19 safety measures on a case-by-case basis. Factors to be considered include whether the costs are allowable, reasonable and consistent with The Centers for Disease Contract and Prevention (CDC) guidance and did the contractor discuss the actions with the contracting officer.

In-Person Meetings: Agencies should evaluate the need for in-person activities such as industry days, debriefings, and inspections on a case-by-case basis. Social distancing should be practiced when in-persons meetings are required.

Emergency Procurements: The micro-purchase and simplified acquisition thresholds have increased due to the fact that President Trump declared a national emergency. Until the declaration is rescinded;

  • The micro-purchase threshold has increased from $10,000 to $20,000 for domestic purchases and to $30,000 for purchases outside of the U.S.
  • The simplified acquisition threshold has been increased form $250,000 to $750,000 for domestic purchases and to $1.5 million for purchases outside of the U.S.

As this is a national emergency, Agencies are not required to create preferences for local firms.

In addition, OMB also noted that contractors whose registration in the System for Award Management (SAM) expires before May 17, 2020 will be granted one-time 60 day extension to re-register.

If you have additional questions or concerns regarding contracting issues due to COVID-19, please contact Tom Marcinko at 301.231.6237. For help guiding your business through the coronavirus outbreak, visit our COVID-19 resource hub.