In the midst of the current COVID19 pandemic, we have compiled some helpful information and resources for prevailing wage contractors working under the Davis Bacon and Service Contract Acts. All companies working on federally funded contracts should take the following steps.
Review your current contracts
During this crisis, the GSA is using the following framework for categorizing its contracts:
– Contracts which are not affected
– Contracts which are affected but may be performed remotely via telework
– Contracts which must be performed on-site but are mission critical
– Contracts which must be performed on-site but are not mission critical
Assess your contracts and identify problem areas where you might not be able to fulfill your obligations under the Davis Bacon and Service Contract Acts. Be aware of which of the above categories your active contracts fall under.
Know your contractual rights
The Coronavirus pandemic creates significant issues with supply chain management, government imposed employee restrictions and more. These issues are putting many federal contractors and their prevailing wage employees in a situation where they are unable to fulfill existing contracts. Most contracts include a “Force Majeure” clause, which frees contractors from contractual obligations in the event of unforeseen circumstances. Check your contracts to see if this clause can provide relief and protection for your company.
Additionally, Federal Acquisition Regulations (FAR) also mandate their own provisions for excusable delay. FAR clause FAR 52.249-14 is mandated in all federal contracts and it states:
Except for defaults of subcontractors at any tier, the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions
Get ahead of it and communicate early
You need to connect now, not just with your supply chain and employees but also with your administrative, prevailing wage payroll, banking and fringe benefits providers to prepare for any disruptions or changes in service. If the potential for disruptions exist you need to bring them up to your customer/contracting officer early on. “position the excusable delay issue early so you aren’t raising it for the first time in the face of a default determination” – Bob Tompkins, partner with Holland & White.
Be aware of shifting demand under the Defense Production Act
With this act in-effect the federal government holds the right to jump to the head of the line forcing contractors to prioritize sales to the government over sales to private or public companies. The act empowers five agencies specifically: departments of Defense, Energy, Health and Human Services, Homeland Security, including FEMA, and Transportation. The Government’s current top priorities in spending are telework solutions, protective equipment such as N95 masks, pharmaceuticals and medical equipment (primarily ventilators)
Care for your prevailing wage employees
It is not uncommon for employees to push-back, preferring fringe cash in-lieu of fringe benefits. This pandemic highlights the value and critical role fringe benefits play in protecting your business and your employees. At Archer Jordan we specialize in providing fringe benefits such as teladoc, retirement, term life, limited medical and minimum eligible coverage that are vital to employees during this type of crisis. Our Benefit Plans are fully compliant with all federal regulations and getting started is a swift and easy process.