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Path: Consulting Services arrow Report & Digest arrow GCA Report Articles arrow GCA Report 2001 arrow Government Renews Contract Vehicles for Emergency Circumstances

Government Renews Contract Vehicles for Emergency Circumstances

In several unrelated acts prior to the September 11 catastrophe, the government coincidentally renewed or issued rules that provide contracting vehicles to deal with acquiring goods and services under emergency circumstances. On September 9 the House passed by voice vote legislation to extend the Defense Production Act for three years.  The DPA was originally enacted in 1950 to allow the government to order contractors and other private sector organizations to supply goods and services in periods of war and national emergencies.  It has been frequently invoked, most recently for critical supplies during Operations Desert Shield and Desert Storm and earlier this year, to ensure supply of natural gas to military bases and defense facilities in California.  The Act gives the president sweeping authority to (1) establish, expand or maintain essential domestic industrial capacity (2) direct priority performance of contracts and orders to meet national security requirements over, for example, earlier awarded government or commercial contracts that may be more lucrative and (3) suspend or prohibit a foreign acquisition of a US firm when that acquisition threatens US national security.

On July 13, the Environmental Protection Agency issued a final rule providing for use of a Notice to Proceed (NTP) contract in certain emergency response situations.  An NTP is a contract that authorizes the contractor to immediately manufacture supplies or perform services pursuant to FAR 16.603 (Letter Contracts).  It provides the EPA contracting officers or authorized EPA on-site coordinators authority to begin contracting actions to respond to emergency environmental events that includes the release or threat of release of a pollutant, contaminant or hazardous substance that may result in imminent and substantial danger to the public health or welfare of the US.

Since, September 11 the government has alluded to the likely use of these two rules and others including:

1.  The Feed and Forage Act.  Defense Secretary Rumsfeld September 21 invoked an obscure federal law to help pay for emergency costs called the Feed and Forage Act that allows military departments to spend money in excess of appropriated funds for clothing, subsistence, fuel, quarters, transportation and medical supplies in times of emergency as well as pay to additional members of the Armed Forces such as reservists.

2.  Exception to the Competition in Contracting Act.  Contracting officers will likely find themselves under pressure to substitute faster sole source awards in place of more time consuming competitive awards to quickly get supplies into the field.  CICA provides for seven exceptions to use noncompetitive awards (FAR Part 6.3) under unusual and compelling national security circumstances.  However, protests are still allowed.
 
3.  Extraordinary Contractual Relief.  Contractors whose businesses are adversely affected by performing work for DOD (e.g. abandoning more profitable work when the government invokes the PDA) may be able to recover a percentage of contract price if the government cancels the order.  Though losses on development work are not recoverable the contractor could seek extraordinary relief under Public Law 85-804 – claims could be brought before certain established boards created to hear them.

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To discuss your needs, contact Bill Lennett, Principal, at 1-925-362-0712 or email him at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it .

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