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Contractors might be asked to do extra work during the coronavirus and as agency’s scramble to keep operating. Or contractors might have trouble pulling together the people they need, and that could cause delays. Barbara Kinosky said those and other situations have specific procedures and remedies, and as contractors you’ve got specific rights. The managing partner of Center Law & Consulting joined Federal Drive with Tom Temin to talk more.

Interview transcript:

Tom Temin: Barbara, good to have you back.

Barbara Kinosky: Thank you for having me back.

Tom Temin: Let’s talk about contractors that might have to do something extra. Have you heard about this kind of thing? And what sorts of extras might they need to do? And what are the implications, payment-wise and contractual terms and conditions-wise?

Barbara Kinosky: Well, we are in uncharted territory here. Let me start first with some of the base ops contractors that I’m hearing from, and those that are performing things like janitorial services and working in [the Transportation Security Administration], where they’ve been required to take extraordinary precautions. In fact, some of them as you’ve seen in the news have been coming down and testing positive with the coronavirus, and a lot of employees are saying, “Wait a minute. This is not what I signed up for.” So we’re getting this dynamic of contractors being required to perform different services than they contracted for, or more services using different types, in particular in the janitorial area, extra cleaning that they did not anticipate, along with employees who are saying, “I don’t care how much you pay me. I am not going to do this.” So we’re getting questions on both of those issues. This is also gonna be tied into an availability of funds clause, because we’re going to be spending a lot of money on the coronavirus, which I think is gonna test the federal budget.

Tom Temin: Sure. So therefore, what should contractors, what’s their best course of action when they’re facing a situation like that?

Barbara Kinosky: Well, document, document, document. We’re seeing [sic] equitable adjustments that are in their infancy stages now, as contractors are figuring out what extra work we may have to do. We’re also seeing a huge disruption in those that are providing products in supply chain. As you know, unfortunately, we don’t manufacture a whole heck of a lot in this country. So those that are delivering products are having delays. So in addition to those that are doing extra work, and we’ll need to document a request for an equitable adjustment, those that cannot deliver are gonna have to put everything in writing and notify the government and request extensions.

Tom Temin: And then there’s the situation of people experiencing delays because they can’t get the staff together. And then that could cause some lack of contract performance. You know, under normal circumstances. So what are you saying to fly into this point?

Barbara Kinosky:  Well, I wanted to say it is similar to “Who Moved My Cheese,” except I’m afraid we’re gonna have to pay them a royalty. So we’ll say “Who moved my meatballs?” Because employees are gonna have to deal with change. And employees are now saying, “Wait a minute. Um, this is not what I signed up for.” And employers who don’t have the IT remote workforce tool set up are gonna find out that they have to modernize their IT infrastructure. I think we’re gonna need more wireless hot spots. And we’re also gonna find out that a lot of employees are gonna have to adapt with, um, changes in how they work at home, which they didn’t anticipate, particularly those that are in micro spaces. I’ve seen on the Internet people that are using ironing boards for desktops and things like that and also not having the internet that they anticipated. So we’re finding a whole lot of things can be done actually, in the office much more efficiently. When we all thought work from home was the mantra last year. Now that everything is actually work from home, I’m finding it takes a lot more work to work from home.

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Tom Temin: Well, what about nonperformance or excusable delays? I mean, if you’re a contractor, that’s a specific situation vis-a-vis your terms and conditions. What do you do then?

Barbara Kinosky:  I just read an email from somebody who said “They just shut down a whole section of the government because somebody tested positive. And what do I do with the employees?” And I said, wow, that’s a difficult one because the government is causing the delays, so it’s definitely excusable, and they have some deliverables to meet, too. So you definitely have an excusable delay if your employees can work remote and sometimes they can’t. Then you’ve got to issue there that you need to discuss with your government customer of can you build them for this time? You certainly will be able to recover the delay time because the building’s shut down. What’s interesting is I’m also hearing from R&D contractors who were performing research and development that typically has to be done on site. And there’s not remote working on those that there’s serious delays and some of those projects. So I’m saying again, you need to notify the government. This is an excusable delay just like as in the clause says, “an act of God.” And I think there are also things like, you know, hurricanes, tornadoes, things that are unforeseen. And this is definitely one of those unforseen areas where none of us really have a road map on how to proceed.

Tom Temin: We’re speaking with Barbara Kinosky. She’s managing partner of [Center Law & Consulting]. And looking at the topics on the webinar that you have coming up, and I guess a lot of people are signing up for these kinds of things. You have, one topic is pending proposals, how to prepare for a long procurement period. What’s the thinking there?

Barbara Kinosky:  That is really interesting. We’ve been monitoring to see what’s coming out and not that much is coming out. As far as new solicitations and the ones that are under review have been slowed down, the whole process is slowing down. Everybody is teleworking. People are sometimes on indefinite isolation. So we’re not seeing many awards coming out. We are also seeing we’ve been in the loop on a big award that might be coming out soon, in which only half the staff can work. So the government is saying, Well, we’re gonna make this award, but we’re shutting down half the offices. So the company that priced the proposal is going to say, well, wait a minute. We priced for all these staff and not for half the staff that are coming in. This is the material change. So I don’t know. We’re just in new, uncharted territory, and I think normally, if in normal circumstances, I would say, if you only have half the staff, do you go to the government, say, wait a minute, I would of priced this in a different manner had I known. But now I think everybody is inclined to work with the government and find a solution. And I think companies are a lot less litigious against government right now because they’re all thinking we have to do this together. And I think they’re also got an eye on budget pruning and what it’s gonna look like in the future. So everybody wants to keep a good relationship.

Tom Temin: On the other hand, sometimes the costs to a contractor could rise because of coronavirus and everything that’s going on. And so how do you get an equitable adjustment? I mean, you are entitled to that, even though you might want to play ball in general to keep things going.

Barbara Kinosky:  Well, good question. Document, document, document. And one of the issues that we were tossing around the office is FAR 52.232.18, which is the availability of appropriated funds. And one of the concerns we have right now, are there going to be enough appropriated funds to cover all these REAs because we’re putting a boatload of money right now into the coronavirus. And that’s gonna really test how much debt we can absorb. It’s going to test how much discretionary budget we have to award contracts, and I think it’s gonna prune out a lot of contractors who won’t be able to adjust, who won’t be able to move into the civilian side and those that are supplying products that I think it’s gonna create a totally new and different dynamic in the federal contracting space.

Tom Temin: And the final question: Do you get the sense talking to clients and talking to contractors that most of the companies are also teleworking? Just the way the government mostly seems to be now?

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Barbara Kinosky:  Yes, yes, they are.

Tom Temin: In fact, you are teleworking as we speak, correct?

Barbara Kinosky:  I am teleworking and I am, wow, wanna meet somebody, talk to somebody, see somebody … so people listening, if you want to talk to my mail slot come by.

Tom Temin: All right, Barbara Kinosky is managing partner of [Center Law & Consulting]. Thanks so much.

Barbara Kinosky: Thank you so much, Tom, it’s always a pleasure to speak with you. Thank you.

Tom Temin: We’ll post this interview along with links to more information at www.federalnewsnetwork.com/FederalDrive. Hear the Federal Drive on demand. Subscribe at Apple Podcasts or Podcastone.

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