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Emergency Acquisition Flexibilities Impacting Federal Contract Administration

Federal government contracting operates under a well-defined and highly regulated framework of rules and procedures. However, unforeseen circumstances like natural disasters or national emergencies often disrupt the typical procurement process. Recognizing this, the Federal Acquisition Regulation (FAR) contemplates the need for emergency acquisition flexibilities for contracting officers under special circumstances such as disasters, contingencies, or presidential declarations so that critical work continues. Notably, FAR § 18.001 defines emergency acquisition flexibilities as flexibilities provided with respect to any acquisition that is used to facilitate:

  • A contingency operation.
  • The defense against or recovery from cyber, nuclear, biological, chemical, or radiological attacks.
  • The provision of international disaster assistance.
  • A presidential emergency declaration or a major disaster declaration.

FAR § 18.1 lists several acquisition flexibilities available to contracting officers provided certain conditions are met. However, contractors will find the following emergency acquisition flexibilities most relevant and useful in the administration of federal government contracts.

Retroactive Approval of Contractor Overtime. FAR § 18.118 gives contracting officers the authority to retroactively approve contractor requests for overtime in certain situations, provided the requirements for overtime approvals are met. For instance, FAR § 22.103-4(a) requires that overtime approvals only be granted by contracting officers upon a written determination that overtime is necessary to:

  1. meet essential performance or delivery schedules;
  2. make up for performance delays that are beyond the contractor’s control; or
  3. eliminate certain production bottlenecks.

Provided these approval requirements in FAR § 22.103-4 are met, contracting officers may generally approve overtime prospectively. However, contracting officers are granted emergency acquisition flexibilities under FAR § 18.118 and FAR § 22.103-4(i). Therefore, contracting officers may approve overtime requests retroactively if doing so is justified by emergency circumstances.

Making Advance Payments. FAR § 18.122 allows government agencies to authorize advance payments in sealed bids or negotiated contracts when such advance payments facilitate national defense for contract actions taken under Public Law 85-804 and as prescribed by policies and procedures under FAR § 50.1.

Use of the No-Setoff Provision. A set-off refers to the government’s right to reduce a contractor’s payments by the amount of the contractor’s debt to the government, regardless of whether the debt is related to the transaction at issue. FAR § 18.123 gives contracting officers the authority to include a no-setoff provision when necessary to facilitate private financing of contract performance and to facilitate national defense in the event of an emergency or a natural disaster. Still, contracting officers are required to consider the government's best interests when including the no-setoff provision in situations where a prospective contractor is significantly indebted to the government.

Waiving the Use of Electronic Funds Transfer. The Government is generally required to make all contractor payments through electronic funds transfer, subject to certain exceptions in FAR § 32.1103. As acquisition flexibility, FAR § 18.124 permits government agencies to waive this requirement when necessary to support unusual and compelling needs or emergency acquisitions.

Overriding GAO Protest Decisions Staying Contract Award or Performance. The Government Accountability Office (GAO) automatically stays the award or performance of a contract when a pre or post-award bid protest is filed under its bid protest function. As acquisition flexibility, FAR § 18.125 allows government agencies to override these automatic GAO stays pursuant to agency protest override procedures in urgent and compelling circumstances.

Allowing Rent-Free Use of Government Property. FAR § 45.301 generally prescribes the policies and procedures for contractor use and rental of Government property. As acquisition flexibility, FAR § 18.126 waives rental requirements for certain items of Government production and research property that are part of a general program approved by the Federal Emergency Management Agency (FEMA) and meet certain criteria.

Taking Extraordinary Contractual Actions. As acquisition flexibility, FAR § 18.127 allows agencies to take extraordinary contractual actions to facilitate national defense under the extraordinary emergency authority granted by Public Law 85-804 and as prescribed by the policies and procedures in FAR § 50.1. Such extraordinary contractual actions include:

  1. issuing contract amendments even in the absence of consideration;
  2. correcting or mitigating contractual mistakes; and
  3. formalizing informal commitments.

Government agencies need to act quickly when emergencies and disasters happen. During such times, acquisition flexibilities outlined in the FAR minimize administrative hurdles and allow government agencies to move quickly and efficiently. Acquisition flexibilities come particularly handy in times of emergencies when government agencies must procure medical supplies, communication equipment, food, water, and other critical requirements on short notice. The emergency acquisition flexibilities outlined in the FAR offer a critical framework for navigating unforeseen emergency circumstances in government contracting. By understanding these provisions, contractors can ensure essential work continues while meeting compliance requirements.

This Federal Procurement Insight is provided as a general summary of the applicable law in the practice area and does not constitute legal advice. Contractors wishing to learn more are encouraged to consult the TILLIT LAW PLLC Client Portal or Contact Us to determine how the law would apply in a specific situation.