COVID-19 and Federal Contracts
By now, most of us have settled into the reality that COVID-19 is here to stay and that our lives will be greatly impacted by it. As we settle into our new socially distant lifestyles and get used to the word “pandemic” used in everyday conversation, toilet paper shortages, and learning our family’s Netflix preferences, we may start to wonder how we can help. Of course, the best thing we can do is stay home and wash our hands, but for Orlaithe Consulting and our clients we have a few more options when it comes to supporting Government healthcare acquisition goals.
Emergency Purchasing Tools
COVID-19 is rapidly spreading and healthcare facilities at all levels – federal, state, local, and private – are going to soon feel the pinch of a supply shortage, if they don’t already. With the President declaring the pandemic a national emergency, federal agencies have been implementing the emergency purchasing tools to enhance access to needed healthcare products and services.
Executive Order + Defense Product Act (DPA)
On March 18, 2020, President Trump issued an Executive Order allowing the Secretary of Health and Human Services as the lead department tasked with the emergency procurement of health and medical resources. Additionally, President Trump recently invoked the Defense Production Act, which authorizes the Government to issue prioritized orders for needed products to any commercial business, regardless if they have a government contract in place or not.
What can I do and how can Orlaithe help?
Both the Executive Order and DPA require commercial businesses to provide requested products to the Government within specific time frames. This may require that your firm retool its machines to make the requested products, provide supplies previously earmarked for private use to the Government, and/or set-aside materials or facility capacity in anticipation of the receipt of rated orders.
It is important to know your rights if the government issues your company a rated order. Orlaithe is here to help you navigate these murky waters by participating in phone calls with HHS or DOD officials, reviewing acquisition orders, and connecting you with legal experts that are familiar with these regulations.
Purchasing Thresholds
The Department of Veterans Affairs (VA) recently issued a memorandum that increases its acquisition thresholds to expedite the purchase of needed goods and services for purchases in the United States[1]. These thresholds are in effect until June 30, 2020 unless otherwise changed.
Micro-Purchase Threshold: $20,000
Simplified Acquisition Threshold: $750,000
Simplified Acquisition Procedures for Commercial Items Threshold: $13 million (for drugs, medical devices, and supplies)
It is likely that other agencies have increased their acquisition thresholds as well.
What can I do and how can Orlaithe help?
Remain flexible – especially when it comes to your federal contracts. With supply lines disrupted and businesses being forced to close for extended periods of time, no one knows what the total impact will be on the economy or the healthcare system. This means that the Government may need to pivot at a moment’s notice to access needed supplies and equipment as quickly as possible.
Orlaithe will update you when there are big changes in federal healthcare acquisitions and the Government’s response to the crisis.
Be prepared for an increase in credit card orders – the increase micro-purchase threshold means that more business will be done with credit card rather than purchase orders. Evaluate your credit card terms on your FSS contract vehicle and update if necessary.
Orlaithe can help you submit an administrative mod request to change any of your awarded terms and conditions, including credit card and prompt payment terms.
State and Local Purchasing Under FSS
With the declaration of a national emergency and the implementation of the Stafford Act, state and local governments are now able to purchase needed drugs, medical equipment, supplies, and services from the VA Federal Supply Schedule (FSS) program.
What can I do and how can Orlaithe help?
RFM to participate in the Disaster Recovery Purchasing Program – you may not have opted to participate in the Disaster Recovery Purchasing program at time of award – no big deal, Orlaithe can help you submit an administrative mod request to change your participation option.
Know your rights – remember that fulfillment of state and local government orders is not mandatory.
Receiving a state or local order against your FSS contract – keep in mind the following if you process state or local orders against your FSS contract:
All order must include reference your FSS contract number and include the following language:
This order is placed under VA Schedule number (i.e. 65IIA, 65IB, 65IIC, etc.) under the authority of the GSA Disaster Purchasing program. The products and services purchased will be used in preparation or response to disasters or recovery from major disaster declared by the President or recovery from terrorism or nuclear, biological, chemical, or radiological attack.
IFF Report + Sales Remittance – you must report sales made against your FSS contract to state and local governments and remit the associated IFF. VA recommends that you maintain a separate indicator for your state and local government sales to make reporting time easier.
Orlaithe is here to help you prepare and submit responses to state and local solicitation requests. We are also happy to be that “third” set of eyes to review any work you’ve already done.
SAM Registrations
All entities with a SAM record that expires between March 19, 2020 and May 17, 2020 have been granted a 60-day extension to renew their active record. If your record expires within this time frame your company administrator should have received an email from SAM informing them of the extension.
What can I do and how can Orlaithe help?
Even though you may have an extension get your SAM record updated as soon as possible. This is the sole source of vendor data used by contracting officers throughout the federal government to confirm a company’s size status, legal status, and reps + certs.
Orlaithe is happy to review your active SAM record to make sure that everything is current, accurate, and complete.
Working Together
Everyone is working together to manage the pandemic. The Government is making strides in alleviating some of the administrative burdens of modern contracting practices – especially for healthcare products and services.
As a contractor of healthcare supplies and services (including drugs, supplies, and equipment) with the federal Government the best things you can do (other than staying home and washing your hands) are:
Make sure that your contract is up to date with relevant products and services;
Keep your Government customers informed of your product quantities and any supply delays;
Be flexible in your acquisition practices; and
Keep informed about the rapidly changing acquisition landscape and know your rights if your firm is tasked to provide a rated order or change its manufacturing facilities to meet Government demand.
Throughout all of this, Orlaithe is here for you. Let us know if you are struggling financially – we can come up with payment options that in everybody’s best interest. Or let us know if you want/need help with your commercial acquisition space. And, as always, let us know how we can help you best serve the Government and its elderly and Veteran populations.
This is the first time in our modern shared history that we have a common enemy to fight – we are all in this together.
Stay safe and healthy and look for ways to find meaning in your daily life throughout this difficult time.
[1] VA will consider purchases outside the US on a case-by-case basis.