DoD, DHS setting the bar high for vendor communication

Chris Howard is used to working from home. The vice president of U.S. public sector at Nutanix has been working remotely for 15 years. But even for Howard, the changes brought on by the coronavirus pandemic has required some adjustment.

“This is our new life behind the computer screen. There is no opportunity to meet in person right now so it’s an adjustment period,” Howard said in a recent interview. “I’ve working from home for 15 years, but I always had the flexibility to travel and see clients. But this, our new reality for 10 or 12 hours a day and it can be tough to deal with.”

Howard, like many government contractors, are using video teleconferencing systems to keep in touch with his co-workers and industry and agency partners.

“We are doing a lot of virtual lunches and some virtual happy hours just as a way to get people engaged and have a semblance of a team,” he said.

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It’s that engagement and ensuring the relationship continues that is something agencies tend to struggle with. But in this age of social distancing, certain agencies are standing out in how they are communicating with vendors and customers alike.

Alan Chvotkin, the executive vice president and senior counsel for the Professional Services Association, told the Federal Drive with Tom Temin in a recent interview that agencies and contractors are doing their best to keep moving forward. He said this means understanding the state of current and future acquisitions.

“I’ve been really pleased and thrilled with the willingness to engage and the outreach they are taking,” Chvotkin said. “We have a call with the Defense Department several times a week, and we have for the last several weeks, under [Undersecretary of Defense for Acquisition and Sustainment] Ellen Lord’s leadership with multiple trade associations. We talk through issues that arise and it results in not just a conversation, but real action.”

He said there are five or six agencies, including the Department of Homeland Security, the U.S. Agency for International Development and the General Services Administration, that have been out in front in communicating with vendors.

New DHS facility rules

To that end, DHS Chief Procurement Officer Soraya Correa released a memo on March 25 to vendors detailing new procedures for getting into agency facilities.

“Admission to the facility or work space will be limited to individuals who have been authorized access during the COVID-19 restricted access timeframe, and who have a government personal identity verification (PIV), common access card (CAC), or other documents allowing access to the facility or work space,” the guidance states. “Everyone including employees, contractors and visitors entering a DHS facility or work space may be screened prior to entry. At the St. Elizabeth campus the screening process will include a temperature check to assess that the person’s temperature is less than 100.4ºF. In addition, the person being screened will likely be asked a series of questions to determine whether the person should be permitted to enter the facilities or work space.”

Correa said these rules will remain in effect for at least 30 days.

“Contractor and subcontractor employees who are denied access to DHS facilities or work spaces should notify their employer of the denial and the basis for it,” she wrote. “In addition, in the event a contractor or subcontractor employee is denied entry, it is requested that the company notify the appropriate contracting officer, or contracting officer’s representative. If contract performance is anticipated to be affected due to the COVID-19 situation, please discuss the situation directly with the contracting officer immediately.”

Read more: Reporter’s Notebook

Over at the Pentagon, the Defense Pricing and Contracting office has been putting out memos and guidance nearly every day. Since early March, DPC has issued 12 memos, three class deviations and two announcements. It also has posted the memos and guidance from the military services and from Lord’s office.

Most recently, Lord issued a memo to expand the use of Other Transaction Authority agreements for coronavirus programs up to $100 million for prototypes and $500 million for follow-on production agreements.

DoD equitable adjustment guidance

One of the most important memos DoD recently issued was about Equitable Adjustments for contractors. This lets the military services and Defense agencies initiate the clauses in contracts that excuse performance delays, when the failure is beyond the control and without the fault or negligence of the contractor.

This memo states that in the event of such a delay, the contractor is entitled to an equitable adjustment of the contract schedule and cost (when those costs are sufficiently supported), which means the contractor will not be in default because of an event like COVID-19. DoD says contracting officers have the standardized guidance and are working with defense contractors.

Late last week, DPC followed up on the class deviation from DoD on accelerating progress payments to contractors with nine frequently asked questions that it has received from industry.

Read more: Acquisition News

DoD spokesman Lt. Col. Mike Andrews said in a statement that the increased progress payment rate to 90% of cost for large businesses from 80%, and to 95% for small businesses from 90% is already happening. The Defense Contract Management Agency has modified approximately 1,400 contracts that were already receiving progress payments to show the increased rates. It has also authorized the use of progress payments for additional vendors if they choose.

“We estimate this will result in over $3 billion in cash being flowed into industry,” Andrews said. “The department has high expectations that prime companies are ensuring cash flow is moving to small businesses in their respective supply chains who need it most.”

Additionally, Andrews said DCMA and the Defense Finance and Accounting Services (DFAS) are working together to ensure DoD is paying vendor invoices in a timely manner, and that DFAS has been paying at the higher progress payment rate.

Andrews said as of April 3, there have been no reported delays on contractor submitted invoices.

$265M in spending on coronavirus

Additionally, Andrews said the Joint Acquisition Task Force (JATF), led by Principal Deputy Assistant Secretary of Defense for Acquisition Stacy Cummings, serves as the single-entry point to the DoD acquisition enterprise to address the interagency’s requests for acquisition assistance.

As of April 3, DoD said it has obligated more than $265 million for actions related to the coronavirus pandemic.

“Of note, over $165 million out of the $265 million has been obligated for medical construction, mainly mobile hospitals, that will help allow civilian hospitals to free up additional space for the rising number of patients suffering from coronavirus,” said Andrews in a statement. “In addition, the remaining $100 million includes efforts to provide medical resources including masks, respirators, ventilators, gloves, gowns, fuel, food and other means of support.”

Chvotkin said whether it’s DHS or DoD or any agency, sharing their thinking and answering questions is so important since communication is more difficult.

He said more engagement from the White House or the Office of Management and Budget would be helpful too, especially around governmentwide issues and concerns.