Press Releases

Wexton Calls For Moratorium On Federal Contract Terminations

Calls on administration to provide guidance to protect small businesses and federal contractors

Washington, D.C. -- Today, Congresswoman Jennifer Wexton (D-VA) wrote to the Trump administration to urge a moratorium on all terminations of government contracts and to express her concern over the lack of clear guidance for the oversight of federal contracts during the coronavirus disease 2019 (COVID-19) national emergency.

“Small businesses across my district and around the country are in jeopardy of losing federal contracts as a result of the COVID-19 outbreak through no fault of their own, threatening the livelihoods of millions. OMB and GSA must issue clear guidance to contracting officers to prevent this from happening,” said Congresswoman Jennifer Wexton. “Terminating contracts will only further contribute to economic hardships and place a burden on the federal government at a critical juncture when Americans are relying on essential government services more than ever. Clear guidance would also help ensure that contractors prioritize their health and the health of their families first and foremost, and that their work on behalf of the federal government can continue to the greatest extent possible.” 

While the Federal Acquisition Regulation currently includes emergency provisions for acquisitions during a national emergency, no such guidance exists related to overseeing contracts where work performance may be affected. It is also unclear whether the Default and Excusable Delay clauses included in most federal contracts would include delays related to the COVID-19 response.

Wexton’s letter requests guidance from the Office of Management and Budget and General Services Administration to allow contracting officers to implement the full flexibilities of the contracts they oversee to ensure the contracting workforce can continue working to fulfill their missions. The letter specifically requests that the guidance should include the implementation of full telework flexibilities, a moratorium on contract terminations as they relate to work impacted due to adhering to CDC guidance on COVID-19, and a determination that contractors may still receive payment if facing an excusable delay.

The text of the letter may be found here and below.

March 18, 2020

Russell Vought                                                          Emily W. Murphy                                  
Acting Director                                                          Administrator
Office of Management and Budget                            U.S. General Services Administration
Washington, D.C.                                                      Washington, D.C.

Dear Acting Director Vought and Administrator Murphy:

I write requesting guidance to be issued from the Office of Management and Budget (OMB) and the General Services Administration (GSA) to all contracting officers with regard to the oversight of federal contracts during the national emergency relating to Coronavirus Disease 2019 (COVID-19).

Under the Federal Acquisition Regulation (FAR), contracting officers have the authority to enter into, administer, or terminate contracts on behalf of the federal government. [1] Although FAR includes several emergency guidelines with respect to acquisitions under a national emergency, it does not include provisions for contracting officers as it relates to overseeing contracts during a national emergency where work performance might be affected.

In a Memorandum issued March 10th, 2020 from the Office of the Under Secretary of Defense, Acquisition and Sustainment, contracting officers were strongly encouraged to engage with their Government program managers to determine what, if any, measures should be taken to ensure the welfare and safety of the total force, while ensuring mission continuity. Additionally, while most federal contracts include Default and Excusable Delay clauses, which would provide protections such as additional time to deliver services and goods due to causes outside of their control, it is unclear whether delays due to the COVID-19 response would be applicable.[2]

Given the need for a swift response as well as the wide variance across the federal government with how agencies are responding to COVID-19, guidance is needed from OMB to ensure contracting officers are able to implement full flexibilities of the contracts they oversee as well as ensure the contracting workforce can continue with its goal of mission fulfillment. This guidance should include, but not be limited to:

  • Implementing maximum telework flexibilities;
  •  The extent possible for imposition of a moratorium on invoking contract termination as a direct relation to the contractor’s ability to provide service while following federal and/or CDC guidance in regard to COVID-19; and
  • The extent possible to make determinations that federal contractors shall continue to receive payment if under excusable delay.

I am extremely concerned that terminating ongoing federal contracts will only contribute to the current economic decline and guidance from OMB regarding the above will help ensure the millions of federal contractors who execute the functions of the federal government on a daily basis can continue to do so without undue delays and inconsistencies due to lack of overarching guidance under this unprecedented national emergency.

Please contact Courtney Callejas in my office at 202-225-5136 or if you have any questions and I look forward to your response.