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With the Paycheck Protection Program (PPP) and funding for the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EDIL) unlocking a combined total of over $360 billion for loans to cover urgent business costs, including payroll costs, employee benefits and leave, mortgage interest payments, debt refinancing, rent and utilities, the CARES Act has extended an essential lifeline targeted at eligible small businesses. Now companies are scrambling to determine whether they qualify, what they are entitled to, and how to access this loan financing to sustain their businesses and their workforce during the COVID-19 pandemic. With many companies unfamiliar with the SBA’s complex rules for determining small business status, the expansion of eligibility under the PPP, and differing threshold requirements under the PPP and EIDL, companies first need answers to an immediate question: Am I an eligible business under the PPP, EIDL, or both?

To help guide companies through this threshold question, we have initially prepared a step-by-step PPP eligibility questionnaire that includes the relevant inquiries and initial documents and information necessary for this analysis as well as discusses overviews on PPP loan terms and application process.

The Trump Administration has indicated that the small business loan programs of the CARES Act could be up and running as early as April 3, 2020. We will update this guidance once the SBA issues its regulations and gives greater insight into how the Paycheck Protection Program will be implemented in practice.

We’ll be discussing this topic further today, March 31, at 4 pm. Click here to register.

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The Defense Department (DoD) recently released Department of Defense Instruction (DoDI) 5200.48, “Controlled Unclassified Information (CUI),” which provides the DoD’s long-anticipated guidance on how to mark and handle CUI in accordance with the Federal Government’s broader CUI Program and DFARS 252.204-7012.  In doing so, it cancels legacy CUI guidance under DoD Manual 5200.01, Volume 4, “DoD Information Security Program: Controlled Unclassified Information.”

Notably, DoDI 5200.48 unveils the official DoD CUI Registry.  Although public access is currently restricted, the DoD CUI Registry is intended to provide an official list of Indexes and Categories that the DoD will immediately begin using to affirmatively identify CUI provided to its contractors, potentially clarifying what has been a common source of confusion for the contracting community.

DoDI 5200.48 is part of the DoD’s “phased” approach to fully implementing its CUI Program, and it notes throughout that additional guidance will be forthcoming.

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The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), passed by Congress today, offers relief specifically targeted to federal contractors whose employees (1) cannot perform work on a “site that has been approved by the Federal Government ” during the COVID-19 public health emergency due to facility closures or other restrictions and (2) cannot telework because their job duties cannot be performed remotely. Section 3610 of the CARES Act authorizes agencies to use any available funds to modify affected contracts – without consideration – to reimburse paid leave, including sick leave, that a contractor provides to keep its employees or subcontractors in a ready state. The authorized reimbursements may cover an average of 40 hours per week, “at the minimum applicable contract billing rates.” The maximum reimbursement must be reduced, however, by the amount of any credit the contractor is allowed pursuant to Division G (“Tax Credits for Paid Sick and Paid Family and Medical Leave”) of the recently enacted Families First Coronavirus Response Act, and by any other applicable credits that the contractor is allowed under the CARES Act.

The authorization of this relief is congressional acknowledgement of the critical role that contractors play in supporting the federal government and the need to ensure the availability of that support going forward. However, the CARES Act grants authority rather than mandating relief, which could lead to inconsistent application among various agencies. Affected contractors should watch for any forthcoming agency guidance and be prepared to educate government customers about this Congressional authorization.

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On March 23, 2020, the President signed an “Executive Order on Preventing Hoarding of Health and Medical Resources to Respond to the Spread of COVID-19” delegating additional authorities under the Defense Production Act of 1950 (“DPA”), which builds on Executive Order (EO) No. 13909, issued March 18, 2020, which we discussed here. The new EO delegated to the Secretary of Health and Human Services (“HHS”) the authority to prevent hoarding of health and medical resources necessary to respond to the spread of COVID-19 by: (1) prescribing conditions for accumulation of such resources; and (2) designating any material as scarce or threatened by excessive accumulation as to reasonable business, personal, or home consumption, or for purpose of resale at excessive prices (i.e., price gouging). These designations, in turn, trigger the prohibitions against hoarding. The EO also delegated the authority to gather information, such as information about how supplies of such resources are distributed throughout the nation, through use of investigations, records, reports, and subpoenas. The DPA and its implementing regulations and orders carry criminal penalties for noncompliance, as well as the possibility of injunctive relief in certain circumstances.

Subsequently, HHS issued a notice, effective March 25, designating fifteen materials as “scarce materials or threatened materials,” including items such as N-95 and other filtering facepiece respirators, ventilators, disinfecting devices, and a variety of health-related personal protective equipment (“PPE”). Under the notice, the term “materials” includes raw materials (including critical components), products, and items of supply; and any technical information or services ancillary to the use of any such materials, commodities, articles, components, products, or items. The term “scarce materials or threatened materials” means health or medical resources, or any of their essential components, determined by the Secretary to be needed to respond to the spread of COVID-19 and which are, or are likely to be, in short supply or the supply of which would be threatened by hoarding. Designated scarce materials or threatened materials are subject to periodic review by the Secretary. The designation self-terminates in 120 days unless superseded by a subsequent notice.

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In a per curiam, unpublished decision in In re Fluor Intercontinental, Inc., issued on March 25, 2020, the Fourth Circuit has provided some valuable guidance concerning how companies may avoid waivers of the attorney-client privilege when making disclosures to the government after privileged internal investigations. While the decision is non-precedential even within the Fourth Circuit, it reinforces the legal and policy reasons for allowing such disclosures to occur without mandating waiver of underlying privileged communications.

Fluor Intercontinental, Inc. sought a writ of mandamus from the Fourth Circuit to reverse a district court’s ruling that Fluor had waived the attorney-client privilege when it made disclosures to the government pursuant to the Mandatory Disclosure Rule (48 C.F.R. § 52.203-13) that applies to federal government contractors. The district court’s determination turned on its finding that certain statements in Fluor’s written disclosure constituted “conclusions which only a lawyer is qualified to make.” In granting the writ and vacating the district court’s ruling, the Fourth Circuit held that “the district court’s conclusion was clearly and indisputably incorrect.”

The Fourth Circuit explained that a waiver cannot be inferred “merely because a party’s disclosure covers ‘the same topic’ as that on which it had sought legal advice.” The correct test, rather, is whether “there has been disclosure of protected communications.”

In expounding upon these principles, the court drew a critical distinction between disclosures that “quote[] privileged communications or summarize[] them in substance and format,” and disclosures that “do no more than describe . . . general conclusions about the propriety” of the conduct at issue. Fluor’s disclosures fell into the latter category, and the fact that “Fluor’s statements were based on the advice of counsel” was “clearly and indisputably insufficient to show waiver.”

The court buttressed its ruling on public policy grounds, citing its concern that “the district court’s decision has potentially far-reaching consequences for companies subject to [the Mandatory Disclosure Rule] and other similar disclosure requirements.” The court explained: “We struggle to envision how any company could disclose credible evidence of unlawful activity without also disclosing its conclusions, often based on the advice of its counsel, that such activity has occurred. More likely, companies would err on the side of making vague or incomplete disclosures, a result patently at odds with the policy objectives of the regulatory disclosure regime at issue in this case.”

While the Fourth Circuit’s decision in Fluor arose in the context of the Mandatory Disclosure Rule, its reasoning extends to voluntary corporate disclosures pursuant to the U.S. Department of Justice’s Corporate Enforcement Policies—including, among others, those that relate to the Foreign Corrupt Practices Act and the False Claims Act—which encourage and reward such disclosures, for two reasons. First, the court’s articulation of the correct standard for waiver determinations in the corporate disclosure context was in no way limited to mandatory disclosures. Second, its public-policy rationale referred not only to the Mandatory Disclosure Rule but to “other similar disclosure requirements.” DOJ’s policies strongly encouraging corporate self-reporting are “similar” to the mandatory-disclosure regime that applies to government contractors.

Thus, in either setting, companies disclosing employee wrongdoing to the government based on the results of privileged internal investigations would be well advised to couch those disclosures in terms of “general conclusions” and avoid “quot[ing] privileged communications or summariz[ing] them in substance and format,” There is, of course, a wide gulf between those two extremes, and thus corporate counsel must continue to tread carefully in walking the line between adequate disclosure and waiver of privilege.

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The General Services Administration (GSA) recently launched a website dedicated to Coronavirus Acquisition-Related Information and Resources. It’s our understanding that the website will be updated regularly and will create a helpful catalogue of public facing guidance, policies, frequently asked questions, and other information generated by federal government agencies on COVID-19-related procurement matters. In addition, the website allows the public to ask general coronavirus acquisition related question. As of March 24, 2020, the website provides links to OMB Guidance and Memorandums and materials from the Department of Defense, the Department of Justice, and the National Aeronautics and Space Administration.

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Virginia law enforcement agencies have created a new task force to address the increased threats of fraud associated with the COVID-19 outbreak. Specifically, the Virginia Coronavirus Fraud Task Force is a joint federal and state initiative that will be led by Assistant U.S. Attorney Kaitlin G. Cooke in the Eastern District of Virginia, Assistant U.S. Attorney Michael Baudinet in the Western District, and fraud investigators from the FBI and Virginia State Police. The mission of the task force is to identify, investigate, and prosecute fraud related to the ongoing coronavirus pandemic in Virginia.

According to the U.S. Department of Justice, the task force will review and investigate all credible leads of fraud, regardless of amount of loss from those activities. The task force will focus on schemes that are designed to exploit vulnerable populations, including the elderly. Federal prosecutors from the Eastern and Western Districts of Virginia will meet and confer with their agency counterparts from the FBI and the Virginia State Police on a regular basis to prioritize cases and surge resources where needed. In addition, the task force will pay close attention to reports of cybercrime, according to FBI Richmond Office Special Agent in Charge, David W. Archery.

Task force officials have identified potential scenarios in which coronavirus and COVID-19 fraud attempts could occur, including:

  • Treatment scams with people offering to sell fake cures, vaccines and advice on unproven treatments.
  • Supply scams with fake shops, websites and accounts claiming to sell medical supplies that are in high demand.
  • Provider scams with people reaching out who claim to be doctors or hospital representatives that say a friend of relative of the victim has been treated for COVID-19 and now payment must be made.
  • Charity scams soliciting donations for people, groups or areas impacted by the virus.
  • Phishing scams posing as national or global health authorities (including the WHO and the CDC) that are trying to get people to download malware or collect financial information.
  • App scams with people creating apps that are reportedly designed to track the spread of the virus but instead puts malware on the person’s device.
  • Investment scams with people claiming that products or companies can cure the virus and their stock will increase in value with specific “target prices” or low-priced stocks.
  • Price gouging scams where people and businesses try to sell essential goods for significantly higher prices than in a non-emergency setting.

This is the first of what will likely be many task forces addressing COVID-related crimes in the coming years. As audits and investigations are common after national disasters, it will be important for contractors to maintain detailed contract files and records during this national disaster to enable them to defend against any future inquiries.

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On March 19, 2020 the Office of Management and Budget (“OMB”) issued Memorandum M-20-17, “Administrative Relief for Recipients and Applicants of Federal Financial Assistance Directly Impacted by the Novel Coronavirus (COVID-19) due to Loss of Operations.”  The memorandum details the administrative relief available to an expanded scope of grant recipients and applicants, both by reminding federal agencies of existing authority to issue exceptions to grant requirements and authorizing agencies to take additional action as appropriate and to the extent permitted by law.

Pursuant to M-20-17, on March 20, the United States Agency for International Development (“USAID”) issued a USAID-specific memorandum adopting the following actions with respect to administrative provisions that apply to USAID grant recipients and applicants that are affected by the loss of operational capacity due to COVID-19:

  1. Flexibility with SAM registration: Grant applicants impacted by COVID-19 will not be required to have an active System for Award Management (“SAM”), and current SAM registrations set to expire within 60 days are extended for an additional 60 days.
  2. Flexibility with application deadlines: USAID may provide deadline flexibility with regard to applications in response to both specific announcements and unsolicited applications.
  3. Waiver for Notice of Funding Opportunities (“NOFOs”) Publication: USAID may publish notices of available funding for periods of less than 30 days.
  4. No-cost extensions on expiring awards: Awards set to expire between March 31, 2020 and December 31, 2020 will be extended automatically at no cost for up to 12 months.
  5. Abbreviated non-competitive continuation requests: For continuation requests due between April 1, 2020 to December 31, 2020, recipients need only submit a brief statement that they are in position to (i) resume or restore their project activities; and (ii) accept a planned continuation award.
  6. Allowability of salaries and other project activities: Recipients may continue to charge salaries and benefits to active Federal awards consistent with the recipients’ policy of paying salaries, and may charge other costs as necessary to resume activities, consistent with Federal cost principles.
  7. Allowability of Costs not Normally Chargeable to Awards: Recipients may charge costs related to the cancellation of events, travel, or other activities necessary and reasonable for the performance of the award, or the pausing and restarting of grant funded activities due to the public health emergency.
  8. Prior approval requirement waivers: In order to allow recipients to effectively address the response, prior USAID approval requirements are waived.
  9. Exemption of certain procurement requirements: Requirements regarding geographical preferences and contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms are waived.
  10. Extension of financial, performance, and other reporting: Recipients may continue to draw down Federal funds without submitting reports, and may delay submission of reports for 3 months beyond normal due dates.
  11. Extension of currently approved indirect cost rates: Recipients may continue to use currently approved indirect cost rates for one additional year.
  12. Extension of closeout: Recipients may delay submission of financial, performance and other reports for up to one year after the award expires.
  13. Extension of Single Audit submission: Recipients and subrecipients with fiscal year-ends through June 30, 2020, may delay submission of their Single Audit reporting package to six months beyond the normal due date.

In addition to providing the guidance detailed above, on March 20, 2020, USAID also updated its [Frequently Asked Questions (“FAQ”) concerning COVID-19 Implementing Partner Guidance (3.20.2020 COVID-19 FAQs)].  This document provides answers to dozens of recipient concerns related to COVID-19 in the following areas:

  1. General Questions
  2. Funding Opportunities
  3. Award Administration
  4. Allowable Costs
  5. Authorized Departures/Evacuations
    1. Guidance for Contractor Staff
    2. Guidance for Grant and Cooperative Agreement Staff
  6. Telework
  7. Audits
  8. OMB Memos M-20-11 and M-20-17
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As signaled as a possibility in its March 9, 2020 guidance in Memorandum M-20-11, the Office of Management and Budget (OMB) issued Memorandum M-20-17 on March 19 to provide short term administrative, financial management and audit relief from the 2 CFR Part 200 Uniform Guidance requirements to a broader scope of recipients of grants and Federal financial assistance that are affected by the COVID-19 crisis.  Importantly, this OMB guidance authorizes awarding agencies to grant the administrative relief exceptions enumerated to the extent the awarding agency deems appropriate to recipients affected by the loss of operational capacity due to COVID-19.  Except as noted below, and until awarding agencies publish additional guidance on their implementation of Memorandum M-20-17, recipients must ask for relief, and the awarding agency then has the discretion to issue an exception to the requirements.

Any exceptions issued pursuant to this guidance are time limited and will be reassessed by June 17, 2010.  Though OMB acknowledges that, at present, many of the operational impacts and cost are unknowable, it is uncertain what OMB guidance will be following reassessment in June 2020.  Therefore, impacted grant recipients should act within the next 90 days to attempt to secure relief.

 

The Differences Between OMB Guidance in M-20-11 and M-20-17

In its most recent guidance in M-20-17, OMB expands the scope of M-20-11 – which was limited to grant recipients performing essential research and services necessary to carry out the COVID-19 emergency response – to provide similar “short term relief” for administrative, financial management and audit requirements under 2 C.F.R. Part 200 to “recipients affected by the loss of operational capacity and increased costs due to the COVID-19 crisis.”  In addition to applying to a broader group of grant recipients, M-20-17 also provides certain additional flexibilities that were not previously included in M-20-11; these include: flexibility with application deadlines, allowability of costs not normally chargeable to awards, extension of currently approved indirect cost rates, extension of closeout, and the ability for awarding agencies to waive certain notification requirements pertaining to COVID-19 related problems on a grant-by-grant basis.

It appears that the allowability of pre-award costs from January 20, 2020 through the Public Health Emergency Period and the twelve-month extension (as opposed to six-month extensions) to complete the Single Audit report, provided in Memorandum M-20-11, continues to be limited to those grantees performing essential research and services necessary to carry out the COVID-19 emergency response.

Notably, as agencies consider this relief, OMB counsels that program managers should consider potential offsets, including a reduction in training and travel.

 

Administrative Relief Exceptions for COVID-19 Crisis

In addition to the existing flexibility that awarding agencies have to grant exceptions on a case-by-case basis pursuant to 2 C.F.R. § 200.102, OMB is providing Federal agencies with the authority to issue broader exceptions to the Uniform Guidance requirements as detailed below.  However, this relief is not automatic, except where noted herein.  Accordingly, recipients and awardees must take affirmative steps to contact funding agencies to request relief absent further guidance from the various Federal awarding agencies.  Awarding agencies are obligated to maintain records on the level of particular exceptions provided to recipients, though recipients are well-advised to maintain records as well even if not specifically required.

As outlined this guidance from OMB, the following exceptions are available.

  1. Flexibility with SAM registration. (2 C.F.R. § 200.205)
  • To expedite the issuance of funding, awarding agencies do not have to require an active System for Award Management (SAM) registration at the time of application.
  • Current registrants in SAM with active registrations expiring before May 16, 2020 will receive a one-time extension of sixty (60) days.
  1. Flexibility with application deadlines. (2 C.F.R. § 200.202)
  • Awarding agencies may ease the deadlines for applications for certain grant announcements, whether solicited or unsolicited. Agencies that choose to relax the deadlines should provide guidance on their websites or provide a point of contract for questions.
  1. Waiver for Notice of Funding Opportunities (NOFOs) Publication. (2 C.F.R. § 200.203)
  • Awarding agencies may publish Notice of Funding Opportunities (NOFOs) with less than thirty (30) days notice without any justification for the shortened timeframe required. Agencies are only required to document and track any NOFOs that are published for less than thirty (30) days.
  1. No-cost extensions on expiring awards. (2 C.F.R. § 200.308)
  • Awarding agencies may automatically extend awards, active as of March 31, 2020 and scheduled to expire before or up to December 31, 2020, at no cost for a period of up to twelve (12) months.
  • Recipients are required to submit project-specific financial and performance reports within ninety (90) days following the end date of the extension. Likewise, awarding agencies are required to examine the need to extend other project reporting as necessary.
  1. Abbreviated non-competitive continuation requests. (2 C.F.R. § 200.308)
  • For projects with planned future support with continuation requests schedule to come in between April 1, 2020 and December 31, 2020, recipients may submit a brief statement to awarding agencies that demonstrates recipients are in a position to: (1) resume or restore project activities, and (2) accept a planned continuation award.
  • Awarding agencies are required to examine the need to extend this approach on subsequent continuation award start dates when recipients have an opportunity to assess their projects.
  • Look for awarding agencies to post specific instructions in this regard on their websites.
  1. Allowability of salaries and other project activities. (2 C.F.R. § 200.403, 2 C.F.R. § 200.404, 2 C.F.R. § 200.405)
  • As it relates to the charging of salaries, benefits, and other necessary costs to Federal ward to resume activities supported by the award, recipients may charge these costs, consistent with recipients’ policy of pay salaries (under unexpected or extraordinary circumstances) from all funding sources and with applicable Federal cost principles and the benefit to the project.
  • Recipients are required to maintain appropriate records and cost documentation as required by 2 C.F.R. § 200.302 to substantial any salaries or costs related to interruption of project operations or services.
  1. Allowability of Costs not Normally Chargeable to Awards. (2 C.F.R. § 200.403, 2 C.F.R. § 200.404, 2 C.F.R. § 200.405)
  • Without regard to the Uniform Guidance “Factors affecting allowability of costs,” “Reasonable costs,” and “Allocable Costs” at 2 C.F.R. § 200.403-405, recipients may charge to the award the full costs related to the cancellation of events, travel, or other activities necessary and reasonable for the performance of the award, or the pausing and restarting of grant funded activities due to COVID-19.
  • Recipients are required to maintain appropriate records and cost documentation as required by 2 C.F.R. § 200.302 to substantial any salaries or costs related to interruption of project operations or services.
  • Awarding agencies are required to advise recipients that recipients should not assume additional funds will be available should the charging of these costs result in a shortage of funds to eventually carry out the event or travel.
  • If appropriate, awarding agencies may provide additional guidance on costs on their websites and/or provide a point of contract for questions.
  1. Prior approval requirement waivers. (2 C.F.R. § 200.407)
  • Awarding agencies may waive any prior approval requirements. Any costs charged to Federal awards must be consistent with Federal cost policy guidelines and the terms of the award, except where specified in M-20-17.
  1. Exemption of certain procurement requirements. (2 C.F.R. § 200.319(b), 2 C.F.R. § 200.321)
  • Awarding agencies may waive procurement requirements with regard to geographical preferences and contracting with small and minority businesses, women’s business enterprises, and labor surplus area firms.
  1. Extension of financial, performance, and other reporting. (2 C.F.R. § 200.327, 2 C.F.R. § 200.328)
  • Recipients may receive extensions for up to three (3) months beyond the normal due date for financial, performance, or other reports. If awarding agencies allow such extensions, recipients may continue to draw on Federal funds.  However, recipients must submit these reports at the end of the extension timeframe.
  • Awarding agencies may waive the requirement for recipients to notify the agency of problems, delays or adverse conditions related to COVID-19.
  1. Extension of currently approved indirect cost rates. (2 C.F.R. § 200.414 (c))
  • Recipients may continue to use their currently approved indirect cost rates (i.e., predetermined, fixed, or provisions rates) to recover their indirect costs on Federal awards.
  • Awarding agencies may approve recipients’ extension requests to use these current rates for one (1) additional year without requiring the submission of an indirect cost proposal. Similarly, awarding agencies may grant extensions for the submission of an indirect cost proposal to finalize the current rates and establish future ones.
  1. Extension of closeout. (2 C.F.R. § 200.343)
  • For the closeout of expired projects, awarding agencies may allow recipients to delay the required submission of any pending financial, performance, or other reports by one (1) year, so long as recipients provide proper notice about the delay.
  1. Extension of Single Audit submission. (2 C.F.R. § 200.512)
  • For recipients and subrecipients who have not filed their single audits as of March 19, 2020 that have fiscal year-ends through June 20, 2020, awarding agencies should allow recipients and subrecipients to delay the completion and submission of the Single Audit reporting package, per Subpart F of 2 C.F.R. § 200.501, to six (6) months beyond the normal due date.
  • Unlike the aforementioned exceptions, no further action by the awarding action is required to enact this extension. Likewise, this extension does not require recipients and subrecipients to seek approval for the extension by the cognizant or oversight agency for audit.
  • Recipients and subrecipients should maintain documentation of the reason for the delayed filing, and would still qualify as a “low-risk auditee” under 2 C.F.R. § 200.520(a).

Crowell & Moring is standing by to assist with any COVID-related questions.  Please contact with any additional questions or concerns related to the OMB guidance or specific agency action.

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On March 20, 2020, the Office of Management and Budget (“OMB”) released guidance to agencies heads on managing federal contract performance issues impacted by COVID-19 [Linked here: M-20-18]. The memo and attached Frequently Asked Questions (“FAQs”) focus on the following main issues:

Telework: agencies are encouraged to maximize telework for contractor employees, wherever possible, to enable continued contract performance consistent with the health and safety of contractor and government personnel.  This includes modifying contracts that do not currently allow for telework.

Mitigating Impact on Contractors: agencies are encouraged to be as “flexible as possible” in responding to the impacts of COVID-19 on contractors.  The OMB specifically suggests that agencies extend performance dates if telework is not available.  Agencies are also encouraged to consider whether it would be beneficial to keep skilled professionals or key personnel “in a mobile ready state” for activities deemed critical to national security or other high priorities, and whether contracts that possess capabilities for impending requirements (e.g., security, logistics) can be “retooled” for pandemic response within the scope of the contract.  Of note, the FAQs note that requests for equitable adjustments (“REAs”) for costs associated with safety measures taken by contractors to protect their employees should be considered on a case-by-case basis.  Agencies are to handle REAs in accordance with existing agency practices, taking into account whether the requested costs would be allowable or reasonable (e.g., did the contractor take actions consistent with CDC guidance; did the contractor reach out to the contracting officer or contracting officer representative to discuss appropriate actions).

Emergency Procurement: agencies are encouraged to leverage special emergency procurement flexibilities authorized in connection with the President’s declaration of a national emergency under the Stafford Act, including the flexibilities identified in FAR 18.202, Defense or recovery from certain events.  The flexibilities include increases in certain thresholds for emergency procurements in support of COVID-19 response efforts:

  • Micro-purchase threshold raised from $10,000 to $20,000 for domestic purchases and to $30,000 for purchases outside the United States;
  • Simplified acquisition threshold raised from $250,000 to $750,000 for domestic purchases and $1.5 million for purchases outside the United States; and
  • Agencies may use simplified acquisition procedures up to $13 million for purchases of commercial item buys.

In addition, because the pandemic is nationwide, acquisitions under the Stafford Act need not create preferences for local firms in areas impacted by the disaster.

SAM Re-registration Extension:  Finally, while the guidance in the memo and FAQs are directed at agencies, the FAQs provide one concrete note of relief for contractors — those with active System of Award Management (“SAM”) registrations that are expiring before May 17, 2020 will be afforded a one-time extension of 60 days.  It is not yet clear how this will be rolled out (e.g., automatically applied or by request), but contractors should be aware this extension as the impact of COVID-19 upends normal administrative functions.

Crowell & Moring is standing by to assist with COVID-related questions.