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Hi All,

I have received a request for equitable adjustment using the authority given in Sec. 3610 of the CARES Act. The request is for nearly $125k total across various service CPFF Task Orders performed by a single contractor. I am having trouble determining if the contractor is even eligible for funds though. My agency has little guidance on the topic and I have looked to DFARS 231.205-79 and DoD posted checklists/guides for further guidance. I have a meeting with our agency counsel but would like to have a polished opinion to present to them. 

The problem, in my opinion, is the services are for coordinating and processing travel for Federal employees and invited guests of the agency. However, the agency stopped 95% of travel starting in March due to COVID-19. We all know how anyone can book travel remotely (ex. I can book hotels, rental cars, airfare, etc. all from my phone) and that it doesn't need to happen at a Government facility or Government approved site. The contractor is stating that because of the drastic reduction that now their employees can't bill enough time and are taking paid leave so they can continue to get paid. Furthermore, the contractor stated in their request that they have been able to process the 5% of travel remotely.

So I'm looking at this from the perspective of: 1) they admitted the service can be performed remotely and 2) the services of booking travel regardless if for the Government or personal can be performed in a remote setting. I'm debating it from all angles because in the end it will probably affect about 15 contractor employees. Can anyone confirm my thinking is aligned with their understanding of the applicability portion of the section?

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1 hour ago, DCArea1102 said:

Hi All,

I'm debating it from all angles because in the end it will probably affect about 15 contractor employees. Can anyone confirm my thinking is aligned with their understanding of the applicability portion of the section?

If using DOD because you have no other agency guidance (what Agency??), I think you should obtain written response from the contractor per DOD Class Deviation O0013 items:

1. Is it a small business and did it apply for relief under the Paycheck Protection Program.

2. Is there any other business income.

3. Does Families First Coronavirus Response Act apply to any employees now or in the past?

Not sure to me whether denial relying solely on being able to perform work remotely is a fair application in this case. The contractor seems to be willing and able to perform work per task orders but for the government cut out of 95% of such work. 

Tough case, as many probably will be.

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1 hour ago, Neil Roberts said:

Not sure to me whether denial relying solely on being able to perform work remotely is a fair application in this case. The contractor seems to be willing and able to perform work per task orders but for the government cut out of 95% of such work. 

Tough case, as many probably will be.

The first part of Section 3610 says only those who cannot perform their job remotely and they can’t access a Government or Government approved site are eligible. 

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It seems clear to me that the burden is on the contractor to convince the contracting officer that it is an "affected contractor" as defined in Section 3610. Along with the REA, I would expect a narrative that provides clear details about why the contractor employees were unable to productively work remotely. There are many functions that could never be performed remotely (e.g., aircraft maintenance); the contractor should explain what the employees' functions were and why COVID-19 impacted operations. The contracting officer has the duty and responsibility to evaluate the REA (and narrative) to determine whether the contractor has made its case.

 

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On 9/29/2020 at 3:04 PM, DCArea1102 said:

I have received a request for equitable adjustment using the authority given in Sec. 3610 of the CARES Act.

Is it an a request for equitable adjustment, or is it a request for reimbursement?  Sec. 3610 of the CARES Act gives an agency discretion (available funding "may be used") to reimburse a contractor for certain paid leave that the contractor provided to its employees to keep them in a ready state.  There is no entitlement to reimbursement created by Sec. 3610.

 

On 9/29/2020 at 3:04 PM, DCArea1102 said:

The contractor is stating that because of the drastic reduction that now their employees can't bill enough time and are taking paid leave so they can continue to get paid.

Sec. 3610 provides, in part:  "Such authority shall apply only to a contractor whose employees or subcontractors cannot perform work on a site that has been approved by the Federal Government, including a federally-owned or leased facility or site, due to facility closures or other restrictions, and who cannot telework because their job duties cannot be performed remotely during the public health emergency declared on January 31, 2020 for COVID–19: ..." (emphasis added).  It seems to me that you've already made the case that the job duties can be performed remotely.

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On 9/29/2020 at 12:04 PM, DCArea1102 said:

The problem, in my opinion, is the services are for coordinating and processing travel for Federal employees and invited guests of the agency. However, the agency stopped 95% of travel starting in March due to COVID-19.

If the actual volume has declined by 95% then the contractor may be entitled to request an equitable adjustment for reasons other than Section 3610 of the CARES act. I say "may be entitled" because it would depend on the circumstances.

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"The contractor is stating that because of the drastic reduction that now their employees can't bill enough time and are taking paid leave so they can continue to get paid."

A crucial question is whether the contract promised a minimum that the Government will order.  If YES, then the next question is whether the Government has met its minimum obligation.  If YES, then there may be no basis for an equitable adjustment.

The CARES Act is irrelevant because the contractor is still able to perform the work.

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3 hours ago, ji20874 said:

A crucial question is whether the contract promised a minimum that the Government will order.  If YES, then the next question is whether the Government has met its minimum obligation.  If YES, then there may be no basis for an equitable adjustment.

The CARES Act is irrelevant because the contractor is still able to perform the work.

Yes, but there may be other circumstances that would lead to a contract repricing, yes? The point is, we don't know.

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59 minutes ago, here_2_help said:

Yes, but there may be other circumstances that would lead to a contract repricing, yes? The point is, we don't know.

I'm just working with what the original poster provided.  

But yes, for example, if the Government failed to deliver promised Government property, or if the Government wanted a certain report daily instead of weekly, and so forth, then there might be a basis for an equitable adjustment.  But to me, nothing offered by the original poster points to an entitlement to any adjustment.  

We don't know.  

These are CPFF task orders, right?  We pay cost plus a fixed fee.  If the contractor's costs go down (because of reduced staffing because of diminished workload), the Government will still pay the fixed fee.  But we don't know if these are task orders under a requirements contract or some other form of indefinite-delivery contract.  

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