House Committees Push for Accelerated Use of Emergency Procurement Powers

Key Takeaways

• The president can authorize agencies to procure emergency supplies under FAR Part 18.
• FAR Part 18 allows contracting officers to bypass ordinary competitive procedures.
• Contracting officers may award contracts to companies not registered in the System for Award Management (SAM).
• Agencies have the authority under FAR Part 18 to make advance payments for emergency supplies at the time of award.

The Defense Production Act of 1950 and Executive Order 13606 provide extensive emergency powers to the president for meeting national crises, but several members of the House of Representatives are wondering why the executive office has failed to make greater use of them. President Trump has invoked DPA authority to ramp up the procurement of personal protective equipment and other essential medical supplies by the Department of Health and Human Services, but that one directive is the only public exercise of DPA powers he has made so far. Now Rep. Adam Smith, Chair of the House Committee on Armed Services, Rep. Frank Pallone, Jr., Chair of the House Committee on Energy and Commerce, and Bennie G. Thompson, Chair of the House Committee on Homeland Security, are urging  the White House to use DPA authority and other emergency contracting procedures more extensively.

In an open letter published on Thursday, April 8, the three House chairmen wrote of their “deep concern about the lack of clear coordination to procure and prioritize necessary personal protective equipment (PPE), ventilators, testing kits, and other critical medical resources to meet the United States’ needs amidst the global COVID-19 pandemic.” Notwithstanding the numerous committees and task forces established to handle emergency response nationwide, the committee chairs argue “that now is the time to use every authority available to the federal government, including emergency contracting procedures, to shorten the delivery timeline to American communities in urgent need.”

Federal Market Analysis has written on DPA procedures at length so I won’t go into them here. The emergency contracting procedures to which the Representatives refer, meanwhile, are listed under Federal Acquisition Regulation Part 18 governing emergency acquisitions. Procurements conducted under FAR Part 18 streamline the standard acquisition process by waving the normal requirement that contractors must be registered in the System for Award Management (SAM) in order to bid for and receive awards. Contracts may also be awarded without following competitive procedures due to “unusual and compelling urgency.” In short, awards can be made to any company deemed appropriate by a contracting officer to meet a compelling emergency need.

Additional FAR changes allowed under Part 18 include the following:

• Contracting officers do not need to submit a synopsis notice if the stated time periods would hinder the government’s emergency response.
• Agencies may use Blanket Purchase Agreements or multiple award indefinite delivery contracts to issue orders.
• Agencies may bypass AbilityOne requirements.
• Agencies may decide not to enforce contractor qualification requirements.
• Contracting officers may award sole source contracts to 8(a) small businesses, HUBZone small businesses, service-disabled veteran-owned small businesses, and woman-owned small businesses.
• Contracting officers may amend existing contracts without consideration to meet emergency requirements.
• Agencies may proceed with procurements when compelling circumstances exist despite protests lodged with the Government Accountability Office (GAO).
• Agencies may make advance payments to contractors either at the time sealed-bid contracts are awarded or afterward.

According to the House chairs, “the response to this crisis requires a whole of government effort, which means FEMA and HHS must use every tool at their disposal, including utilizing the contracting expertise and manpower available at the Department of Defense and other federal agencies through necessary assisted acquisitions, interagency agreements, and logistical support.” Emergency contracting procedures give agencies the authority they need to address identified shortfalls in emergency supplies. All the White House needs to do is direct agencies to make acquisitions under FAR Part 18.