DoD Updates Contracting Guidance Because Of President Biden’s Termination of the COVID-19 Pandemic National Emergency

As a result of the enactment of H.J. Res. 7, which terminated the national emergency related to the COVID-19 pandemic, the Department of Defense (“DoD”) issued guidance to its acquisition workforce terminating the use of “emergency acquisition flexibilities” authorized by the national emergency declaration, including those found in Federal Acquisition Regulation (“FAR”) 18.201 and Defense Federal Acquisition Regulation Supplement (“DFARS”) 218.201.¹ The national emergency declaration also had served as the impetus for DoD to issue several class deviations. As explained below, the DoD guidance listed certain class deviations that “will either be rescinded or addressed through a follow-on effort,” including:

Rescinding in full Class Deviation 2020-O0012 (April 7, 2020), which removed limits related to undefinitized contract actions imposed by DFARS 217.7404.
Revising Class Deviation 2020-O0010 (April 16, 2020), which increased progress payment rates from 80% to 95% for large businesses, will return to 80%, the customary rate. DoD will issue guidance on the effective date as well as “details of the planned prospective change for new contracts.” For small businesses, DoD “will retain the 95% progress payment rate for small businesses that was introduced by Class Deviation 2020-00010, issued on March 20, 2020.”
Class Deviation 2020-O0014 (April 20, 2020), which allowed DoD debarring and suspending officials to deviate from the requirement to provide notices of proposed debarments, debarments, or suspensions via certified mail, by instead using by email, will be maintained until codified through FAR Case 2019-015 Improving Consistency Between Procurement & Non-Procurement Procedures on Suspension and Debarment.

TAKEAWAYS

DoD’s actions, as explained above, indicate that DoD is getting back to business as usual and away from contracting flexibilities necessitated by the COVID-19 pandemic.

¹ On April 15, 2020, DoD announced the use of emergency acquisition flexibilities. For example, under FAR 18.201, the DoD increased the thresholds for micro-purchases and simplified acquisitions to $20,000 and $750,000, respectively.