Highlights of CARES Act Contract-Related Provisions

Key Takeaways:

• Congress passed the CARES Act on March 27, 2020 to help alleviate the impacts and burdens placed on agencies, businesses and individuals due to the coronavirus pandemic.
• The legislation also includes provisions to help manage federal response efforts related to the outbreak, including contracting provisions to accelerate the procurement of contracted goods and services.
• Contractors must remain abreast of the changing acquisition landscape noted within the CARES Act, in an effort to aid federal, state and local governments in managing the response to current events.

Last week, Congress passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, allocating $2.2T in additional funding to federal, state and local governments. The CARES Act addresses several facets impacted by the coronavirus outbreak to help the nation cope and respond to the pandemic. Provisions include economic stabilization efforts for businesses and individuals, facilitation of added federal functions and bolstering medical supplies and services related to the outbreak.

A closer look at the CARES Act reveals a handful of contract-related provisions to help the federal government quickly manage and respond to COVID-19 events:

• Other Transaction Authorities. The legislation removes the $100M cap on HHS Other Transation Authority (OTA) during public health emergiences and allows for the continuation and completion of OTA agreements, particularly beyond expiration of the emergency. The CARES Act also relaxes DOD OTA authority typically restircted to high-level officials to help strengthen defense industrial base liquidity.
• Reporting Noncompetitive Procedures. Revises the timeline to report noncompetitive procedures used in the interest of the public from 30 days to 3 days before award of the contract.
• Undefinitized Contract Actions. Removes restrictions on DOD use of undefinitized contractual actions (a term for when contractual language, specifications, or price is not agreed upon before performance begins) related to the COVID-19 response. The CARES Act also removes cost limits on process payments made under undefinitized contract actions related to COVID-19 to bolster cash-flow to companies.
• Contractor Reimbursement. Grants agencies the ability to modify contract requirements to reimburse contractors for paid leave granted to employees unable to work at federally-approved sites that have closed, and who are unable to telework.

Contractors must remain vigilant to the ever-evolving federal procurement environment, as unprecedented times are proving unprecedented actions by the federal government. The Federal Market Analysis team has put together a report on the latest stimulus package, which further details the provisions and funding outlined in the CARES Act as well as its potential implications for contractors.