EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF MANAGEMENT AND BUDGET
WASHINGTON, D.C.

20503

DEPUTY DIRECTOR
FOR MANAGEMENT

March 20, 2020

M-20-18
MEMORANDUM TO THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES
FROM:

Margaret M. Weichert
Deputy Director for Manageme

SUBJECT:

Managing Federal Contract Performance Issues Associated with the Novel
Coronavirus (COVID-19)

Federal contractors play a vital role in helping agencies meet the needs of our citizens,
including the critical response efforts to COVID-19. The health and safety of all Americans,
including our Federal contractors, remains the top priority. This memorandum identifies steps to
help ensure this safety while maintaining continued contract performance in support of agency
missions, wherever possible and consistent with the precautions issued by the Centers for
Disease Control and Prevention (CDC). Achieving these important goals - and maintaining the
resilience of our Federal contracting base - requires continued communication by agencies with
their contractors, both small and large, and effective leveraging of flexibilities and authorities to
help minimize work disruption.
As the impact of COVID-19 continues to evolve, many Federal government contractors
that ordinarily work side-by-side with the Federal workforce may currently be unable to access
their Federal work sites as a result of building closures, quarantines or implementation of social
distancing practices. Agencies are urged to work with their contractors, if they haven't already,
to evaluate and maximize telework for contractor employees, wherever possible. Telework is an
important tool for enabling continued contract performance in a manner that can meet health and
safety guidelines from the CDC and State and local public health authorities.
Equally important, agencies should be flexible in providing extensions to performance
dates if telework or other flexible work solutions, such as virtual work environments, are not
possible, or if a contractor is unable to perform in a timely manner due to quarantining, social
distancing, or other COVID-19 related interruptions. Agencies should take into consideration
whether it is beneficial to keep skilled professionals or key personnel in a mobile ready state for
activities the agency deems critical to national security or other high priorities. Additionally,
agencies should also consider whether contracts that possess capabilities for addressing
impending requirements such as security, logistics, or other function, may be retooled for
pandemic response consistent with the scope of the contract.

 Finally, agencies are encouraged to leverage the special emergency procurement
authorities authorized in connection with the President's emergency declaration under section
501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§
5121-5207 (the "Stafford Act"). These flexibilities include increases to the micro-purchase
threshold, the simplified acquisition threshold, and the threshold for using simplified procedures
for certain commercial items, all of which are designed to reduce friction for contractors,
especially small businesses, and the government and enable more rapid response to the many
pressing demands agencies face . The availability of these flexibilities does not mean they will
always be suitable, and agencies should exercise sound fiscal prudence to maximize value for
each taxpayer dollar spent. At the same time, the acquisition workforce should feel fully
empowered to use the acquisition flexibilities, as needed, consistent with good business
judgment in response to this national emergency.
The attached set of "frequently asked questions" is intended to provide additional
guidance and further assist the acquisition workforce as it addresses impacts due to COVID-19.
Additional acquisition-related questions should be directed to the Office of Federal Procurement
Policy at MBX.OMB.OFPPv2@0MB.eop.gov. 0MB will continue to provide updates and
additional information as needed to support the resiliency of the acquisition community.

Attachment

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 Attachment

Managing Contract Performance Issues Due to COVID-19
Frequently Asked Questions
Teleworking
1. Should agencies be directing their Federal contractors to follow the lead of the
Federal Government in their use of telework for their contract employees as
described in 0MB Memoranda M-20-13 and M-20-15, which discuss the use of
telework in connection with COVID-19?
The Federal Government' s telework law and recent announcements cover only Federal
managers and employees, not contractors or their employees. Federal contractors are
responsible for managing their workforces, including how telework is used by their
employees, consistent with their own telework policies and the contract terms they have
negotiated with Federal agencies. However, in the spirit of OMB's guidance, which
seeks to maximize the use of telework, and FAR § 7 .108, which instructs agencies not to
discourage contractor use of telework when consistent with contractual requirements,
agencies are strongly encouraged to work with their contractors to evaluate and maximize
telework for their contractor employees, wherever possible, as a way to enable continued
contract performance consistent with the health and safety of their contractor and
government personnel. This includes modifying contracts that do not currently allow for
telework. If a contract does not lend itself to telework, for example, because it must be
performed at a government facility, agencies should consider being flexible on delivery
schedule contract completion dates.

Mitigating the impact of COVID-19 on contractors
2. If contractor personnel must be quarantined due to exposure to the virus, whether
· or not related to performance of the contract, and this action results in a slip in the
contract schedule, may contracts be extended or otherwise altered?
Yes. Government contracts provide for excusable delays, which may extend to
quarantine restrictions due to exposure to COVID-19. For example, see FAR clauses
52.249-14, 52.212-4(±), and 52.211-13. In determining the best course of action, the
contracting officer should discuss the situation with the contractor to determine if other
options are available (e.g., ability of employee to telework or to find a substitute
employee). If other options with the existing contractor aren't feasible, it may be
appropriate to re-procure elsewhere if possible. Such actions should be taken for the
convenience ~fthe government (e.g., through use of the relevant convenience termination
clause or a no-cost settlement) and without negatively impacting the contractor's
performance rating. Excusable delays that result in adjustments to the contractor's
delivery schedule should not negatively impact a contractor's performance ratings.
Agencies are encouraged to be as flexible as possible in finding solutions.
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 3. How should agencies address requests for equitable adjustment associated with
costs related to safety measures taken by contractors to protect their employees
from COVID-19, including costs associated with performance disruptions caused by
the government (e.g., closure of an office building) when performance doesn't allow
for telework (e.g., work requires access to secure location, or involves building
maintenance)?
Requests for equitable adjustment should be considered on a case-by-case basis in
accordance with existing agency practices, taking into account, among other factors,
whether the requested costs would be allowable and reasonable to protect the health and
safety of contract employees as part of the performance of the contract. The standard for
what is "reasonable," according to FAR § 31.201-3, is what a prudent person would do
under the circumstances prevailing at the time the decision was made to incur the cost
(e.g., did the contractor take actions consistent with CDC guidance; did the contractor
reach out to the contracting officer or the contracting officer representative to discuss
appropriate actions).
Agencies may take into consideration whether it is beneficial to keep skilled
professionals or key personnel in a mobile ready state for activities the agency deems
critical to national security or other high priorities (e.g. , national security professionals,
skilled scientists). Agencies should also consider whether contracts that possess
capabilities for addressing impending requirements such as security, logistics, or other
function may be retooled for pandemic response consistent with the scope of the contract.
A number of contract clauses may be helpful in managing COVID-19 issues as they
arise. The government may make changes to the contract using the appropriate changes
clause that applies to the contract (see FAR clauses 52.243-1 through 52.243-3 or clause
52.212-4(c)). If necessary, generally after considering other alternatives, they may
suspend or stop performance through clause 52.242-14, Suspension of Work, and clause
52.242-15, Stop Work Order.
4. If a Federal building, such as a museum, is closed to the general public in order fo
further the practice of social distancing, should repair work to the building be
halted until the building is reopened?
Whether work is continued or stopped should be addressed on a case-by-case basis,
taking into consideration the health and safety of government and contractor employees.
These discussions should include consideration of guidance from CDC and local public
health officials to determine if there is a risk-based reason to stop work and, if work
continues, steps that might need to be taken to address the health and safety of workers.

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 5. Should agencies postpone or virtually conduct acquisition-related activities that are
typically performed face-to-face, such as industry days, contractor debriefings, or
inspections?
Agencies should evaluate, on a case-by-case basis, whether to proceed with in-person
activities, taking into account guidance from the CDC and advice or direction from state
and local public health authorities. Consistent with CDC recommendations, agencies
should consider steps such as practicing appropriate social distancing and following other
guidance if in-person or face-to-face interaction is essential. The CDC has provided
additional interim guidance for businesses, and agencies should consider virtual
activities, such as online industry conferences, video proposals, and other innovative
steps in planning their acquisitions. Sample use cases and examples can be reviewed at
https://www.fai.gov/periodic-table/, and brief how-to applications of these proven
flexible business practices can be accessed at https://www.fai.gov/media­
library/item/procurement-innovation-lab-pil-primer.
6. How can agencies enhance communications with their industry partners?
Clear and timely communication between agencies and their industry partners is critical
to supporting the government's response to COVID-19 and to meeting other mission
needs during this highly dynamic situation. In addition to promoting this engagement
between contracting officers and contractors, agencies can augment their communications
efforts by coordinating timely outreach activities with their industry liaisons (for contact
information, go to https://hallways.cap.gsa.gov/app/#/gateway/acquisitioninnovation/42767/agency-industry-liaisons-directory), offices of small and disadvantaged
business utilization, acquisition innovation advocates (for contact information, go to
https://hallways.cap.gsa.gov/app/#/gateway/ acquisition-innovation/7822/acquisition­
innovation-advocates-aia-directory), and other agency resources.
7. In light of the pandemic, will any relief be offered regarding re-registration in the
System for Award Management?
Yes. Current registrants in SAM with active registrations expiring before May 17, 2020
will be afforded a one-time extension of 60 days.
Procurement flexibilities
8. Are the special emergency procurement flexibilities of FAR§ 18.202 available for
use in addressing requirements connected to COVID-19?
Yes. The President has declared a national emergency concerning the novel coronavirus
disease under the Stafford Act. As a result of this emergency declaration, the flexibilities
identified in FAR§ 18.202, "Defense or recovery from certain events," are available for
use in supporting response efforts to COVID-19. These flexibilities include increases to

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 the micro-purchase threshold, the simplified acquisition threshold, and the threshold for
using simplified procedures for certain commercial items. Specifically(!) The micro-purchase threshold is raised from $10,000 1 to $20,000 for domestic
purchases and to $30,000 for purchases outside the U.S.;
(2) The simplified acquisition threshold is raised from $250,000 2 to $750,000 for
domestic purchases and $1. 5 million for purchases outside the U.S.; and
(3) Agencies may use simplified acquisition procedures up to $13 million for purchases
of commercial item buys.

In conducting acquisitions to support response efforts, agencies are expected to use sound
fiscal prudence to maximize value for each taxpayer dollar spent. The availability of the
flexibility does not mean it must be used, but agencies should feel fully empowered to
use the acquisition flexibilities, as needed, consistent with good business judgment in
response to the national emergency.
9. How can agencies leverage existing category management solutions and expertise
across government?
A number of category management resources and tools are available to help agencies
quickly determine where existing contract solutions for common goods and services may
meet the many pressing requirements in connection with the COVID-19 response. They
include the following:
•

•
•

Category Manager Points of Contact:
https://hallways.cap.gsa.gov/app/#/gateway/category-management/45771 /cms-and­
pms-contact-list
Tools and dashboards:
https :// d2d. gsa. gov/report/ government-wide-category-management-category-reports
How to use category management tools to find existing solutions (searchable by
PSC/NAICS, vendors, solutions, etc.):
https ://hall ways.cap. gsa. gov/ app/#/ gateway/category-management/21999/acquisition­
playbooks

10. How should agencies address preferences and set-asides for local firms set forth
under the Stafford Act?
When an emergency declaration is made under the Stafford Act, contracting officers are
typically expected, to the extent feasible and practicable, to give preference to local firms
in the area designated in the declaration. However, in this case, the declaration makes
clear that the emergency created by the pandemic exists nationwide. As a result, there is
1 Sections 805 and 806 of the National Defense Authorization Act for Fiscal Year 2018, Pub. L. No. 115-91,
increased the micro-purchase threshold to $10,000 (formerly $3,500) and the simplified acquisition threshold (SAT)
to $250,000 (formerly $150,000). The FAR Council is in the process of finalizing changes to the FAR to update
these thresholds.
2 See previous footnote.

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 no specific locally affected area, and therefore no current action required from the
acquisition workforce to create preferences for local firms. This issue will continue to be
reviewed in light of ongoing response efforts, and agencies are encouraged to confer with
0MB regarding potential circumstances where application of local set asides may make
sense, especially for small business contractors.

Tracking activities

11. What steps should the acquisition workforce be taking to facilitate tracking of
contract spend related to COVID-19 using emergency procurement authorities?
The General Services Administration (GSA) has added a new National Interest Action
(NIA) Code to the NIA field in the Federal Procurement Data System (FPDS) as a means
of tracking acquisition costs of the multiple Federal agencies involved in the response to
COVID-19, an incident of great national interest.
The NIA Code will be used strictly for reporting purposes related to COVID-19 and
involves the exercise of the emergency authorities identified in FAR § 18.2. (See
question 12 above.) FPDS system details for this NIA Code are as follows:






NIA Value Name: COVID-19 2020
• Web Portal/Graphical User Interface (GUI) service users may select the value
"COVID-19 2020" in the NIA drop-down field.
• Contract Writing Systems (CWS) shall use the code of "P20C" when creating or
updating documents associated with the COVID-19 response through Business
Services.
NIA Start Date: 03/13/2020
NIA End Date:

07/01/2020

Agencies should consult their internal policy offices regarding compliance with this
and related FPDS requirements.
12. What, if any, steps should agencies take to facilitate tracking of contract spending
related to COVID-19 that are not conducted using emergency procurement
authorities?
Contracting officials are encouraged to use "COVID-19" or "Coronavirus" in their
solicitation and related documentation to support easy key word searching for sharing
buys when possible and recording contracts once awarded.

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