Procurement Impacts of COVID-19
Today more than ever there is growing uncertainty regarding the impacts of Coronavirus (COVID-19). The construction industry is no exception. While construction firms at large are considered essential businesses as defined by the Department of Homeland Security (DHS) the short- and long-term effects of this pandemic have a high probability of impacting “normal” business in the upcoming weeks and months. The Meridian West Team has been researching and keeping up-to-date on current and upcoming procurements for our clients and ourselves. Below, we have summarized a few procurement-related impacts we have seen already hitting the construction industry.
We are seeing a delay in new procurements as well as the postponement of existing procurements as a result of social distancing and telework requirements. The process for finalizing, approving and releasing RFPs has likely been impacted by the altered work environment as well as potential coronavirus diagnoses.
As a result of social-distancing guidelines enacted nationwide, as well as state-specific stay-at-home and shelter-in-place mandates, many site visits and pre-proposal conferences have been impacted. Following the guidelines established by the Office of Management & Budget (OMB) Memo M-20-18, some pre-proposal conferences have turned to online webinars and teleconferences to stay on schedule, other on-site job walks have been postponed indefinitely thereby impacting proposal due dates. This is the case for many projects where a site visit is vital to the preparation of quality proposals. Still, others are proceeding as normal, forcing contractors to make tough decisions to no-bid projects as a result of quarantine restrictions and the challenge of ensuring they are not putting their employees at risk. The inability of many agencies to conduct an in-person site visit has also impacted the release of some planned RFPs.
For proposals that have not been postponed, most agencies are shifting to electronic proposal submission either by way of email or online uploads on sites such as DoD SAFE (Secure Access File Exchange) or FedConnect. In some cases, electronic submission is a necessity as facilities have been closed and are unable to receive packages at this time. For others, this may be a precaution to limit the spread of germs. We recommend inquiring with each procurement agency to request an electronic submission for all proposals currently required in a hard copy format.
Future Construction Funding
Last, but certainly not least, the recent passing of the Coronavirus Aid, Relief and Economic Security (CARES) Act may prove to have a lasting impact on future construction funding. As a result of the $2-trillion disaster-relief package, there is potential for the reallocation of budget funding which could come at the expense of construction projects planned for FY2021 or later. While it is not immediately clear what agencies or projects may become victims, we will continue to monitor upcoming procurement and budget actions to provide further insight.
Beyond procurement impacts, many federal contractors are navigating the fallout of COVID-19 on current contract performance. While there has been much buzz about the Paycheck Protection Program (PPP), the CARES Act (Section 3610) also builds on recent OMB Memo M-20-18 and empowers Contracting Officers to continue paying contractors to support the continued employment of contractor personnel despite work stoppage or delays. There are specific requirements applicable to contractor employees and subcontractors that are no longer able to work on-site and unable to telework, so it is best to coordinate directly with your Contracting Officer to determine your individual situation.
Meridian West will continue to monitor ongoing procurement information as well as government directives related to contract performance to stay abreast of evolving information. If you have any immediate concerns, please reach out to our team!