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Defense Contractors Exempt from State and Local COVID-19 Lockdowns Defense Contractors Exempt from State and Local COVID-19 Lockdowns

Defense Contractors Exempt from State and Local COVID-19 Lockdowns

On Friday, March 20, the Pentagon declared that defense contractors and suppliers can continue to work on-site despite state and local COVID-19 lockdowns. In Under Secretary of Defense Ellen Lord’s memorandum, she echoes the President’s guidelines by stating:

“If you work in a critical infrastructure industry, as defined by the Department of Homeland Security, you have a special responsibility to maintain your normal work schedule.”[1]

Accordingly, defense contractors and their suppliers who support “Critical Infrastructure” are permitted to continue working as usual. The Under Secretary listed the following as some examples of defense contractors, subcontractors, and suppliers exempt from lockdowns:
 
  • Aerospace, mechanical, and software engineers;
  • Manufacturing/production workers;
  • IT support;
  • Security staff and personnel;
  • Intelligence support, aircraft, and weapon systems mechanics and maintainers;
  • Suppliers of medical supplies and pharmaceuticals, and critical transportation;
  • Support for manning, training, equipping, deploying, or otherwise supporting military forces; and
  • Support for development, production, testing, fielding, or sustainment of weapon systems/software or the infrastructure that supports those activities.
Not all defense contracts are considered part of Critical Infrastructure. For example, contracts with the Department of Defense (DoD) for the provision of office supplies, recreational support, or lawn care are not exempt from state and local lockdowns under this memorandum.

Excusable Delays, Prioritization & Mission-Essential Requirements

Even with the exemption, certain defense contractors may consider seeking excusable delays from contracting officers to limit employee activity for safety purposes. Generally, contracts with the DoD excuse contractor’s failure to perform if unable to do so for reasons beyond the contractor’s control, including “epidemics.”[2] Additionally, if a contractor’s subcontractor fails to perform for reasons beyond the contractor’s control, the contractor might not be liable to the DoD if the contractor could reasonably obtain substitute services or supplies.[3]

Before defense contractors consider seeking keeping employees at home, they should determine if their contracts with the DoD require them to prioritize the DoD contract over commercial contracts and if the DoD contract includes Mission-Essential requirements. If the contract is subject to government prioritization known as “rated orders,” then the contractor must generally prioritize work under the DoD contract over commercial obligations. Defense contractors should consider whether their DoD contracts are rated orders before shifting efforts to other business. Additionally, some DoD contracts include “Mission-Essential” requirements under DFARS 252.237-7023. If that provision is included, contractors must develop and implement mission-essential service plans to continue services deemed under the contract as essential during crisis situations “notwithstanding any other clause of th[e] contract.”

Conclusion

If you have any questions about government contracts exemptions from lockdowns or compliance with ongoing project obligations, please contact Guillermo Christensen, Graham Hill, Clay Heil, or Christian Robertson.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader’s specific circumstances.
 
[1] Under Secretary of Defense, Ellen Lord, Defense Industrial Base Essential Critical Infrastructure Workforce, available at: https://admin.govexec.com/media/gbc/docs/pdfs_edit/defense_industrial_base_essential_critical_infrastructure_workforce.pdf.
[2] See FAR 52.249-14(a) (“Except for defaults of subcontractors at any tier, the Contractor shall not be in default because of any failure to perform this contract under its terms if the failure arises from causes beyond the control and without the fault or negligence of the Contractor. Examples of these causes are (1) acts of God or of the public enemy, (2) acts of the Government in either its sovereign or contractual capacity, (3) fires, (4) floods, (5) epidemics, (6) quarantine restrictions, (7) strikes, (8) freight embargoes, and (9) unusually severe weather. In each instance, the failure to perform must be beyond the control and without the fault or negligence of the Contractor. Default includes failure to make progress in the work so as to endanger performance.”).
[3] See FAR 52.249-14(b) (“If the failure to perform is caused by the failure of a subcontractor at any tier to perform or make progress, and if the cause of the failure was beyond the control of both the Contractor and subcontractor, and without the fault or negligence of either, the Contractor shall not be deemed to be in default, unless - (1) The subcontracted supplies or services were obtainable from other sources.”)
 
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