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NECA Legislative Top Three 1/11/19: Small Business Bills Advance; Shutdown Guidance for NECA Contractors

Jan 10, 2019

1. House Passes Small Business Legislation

While much of the legislative business on the Hill during the opening days of the 116th Congress has centered around government funding, the House of Representatives was able to pass two NECA-supported pieces of legislation. The first piece of legislation, H.R. 226, introduced by Chairwoman Nydia Velazquez (D-NY), Ranking Member Steve Chabot (R-OH), and Representatives Josh Harder (D-CA) and Bennie Thompson (D-MS), would require federal agencies to report the total amount of spending in the “best in class” designation and the breakdown of these amounts by socioeconomic categories. The second, which passed the House last Congress, H.R. 227, introduced by Chairwoman Velazquez and Representatives Harder and Trent Kelly (R-MS) will allow subcontractors a proper channel to file a formal notification to the federal government of their lack of prompt payment. The dispute process would go through the Office of Small and Disadvantaged Business Utilization (‘OSDBU’) and would then require this office to determine the validity of a claim and the resolution process.

NECA’s Look Ahead: NECA commends the bipartisan nature of these bills and is extremely pleased to see the overwhelming support they both received in the House. NECA will continue to work with the House Small Business committee to shepherd this legislation through the Senate in an effort to reform a hazardous government procurement environment.

2. Trump Nominates Wheeler to be EPA Administrator

On January 9, 2019, President Donald J. Trump formally nominated Andrew Wheeler to be Administrator of the Environmental Protection Agency (EPA).

NECA’s Look Ahead: On April 12, 2018, Mr. Wheeler was confirmed as EPA Deputy Administrator by all Republican Senators and Sen. Joe Manchin (D-WV).  He has been acting Administrator of the EPA since July 15, 2018 and he is likely to be confirmed without controversy by the Senate in the coming weeks.

3. Federal Government Partial Shutdown - What NECA Contractors Need to Know

Now in its third week, the partial shutdown of the Federal Government has left many contractors unsure of how to proceed and, once the shutdown ends, what remedies, if any, they will have for time lost and costs incurred. NECA has partnered with the renowned law firm of Smith, Currie & Hancock to provide greater and more detailed information for electrical contractors on what they need to know about the partial shutdown.

What NECA Contractors Need to Know

The partial shutdown has left the Department of Defense unaffected. Other agencies, however, have been subject to varying degrees of closure or reduction in services.

The Department of Agriculture has published contingency plans for its various agencies and offices. The Forest Service will continue to operate existing timber harvesting contracts until 21 days after the shutdown (January 12, 2019), at which time further action will be decided on a case-by-case basis. The Forest Service contingency plan is available here.

The Department of Homeland Security is largely on the job, although its significant numbers of “essential” employees are working unpaid. Its contingency plan is available here. The Federal Emergency Management Agency has published guidance for contractors regarding the shutdown. The guidance states that affected contractors should receive instructions from their contracting officers.

The Department of Housing and Urban Development, largely considered “non-essential,” has only a skeleton crew on the job. Public housing authorities and tribal housing authorities, while not required to shut down, may suffer service reductions since some of their funding may come from federal sources. Information related to contracting begins on page 38 of HUD’s contingency plan.

The Department of the Interior has published contingency plans for its various agencies and offices.

The Department of Transportation has furloughed a little less than half of its employees. The Federal Aviation Administration is still providing air traffic control services and other life and safety services.

The Federal Highway Administration is still on the job using funding from other sources. The DOT contingency plan is available 

Contractors should expect that certain Government actions will be delayed due to staff shortages, regardless of the agency. Contractors should notify their contracting officers (CO) in writing of any such delays and conduct all other communications with the CO in writing as well. If a contractor receives instructions from someone other than the CO, it should confirm the instructions with the CO in writing before proceeding, since only the CO has the authority to bind the Government.

When the shutdown ends, contractors may be entitled to extra costs and/or time. Contractors should keep detailed records of costs incurred and extra time required as a result of the shutdown, such as demobilization (and later remobilization) costs and delayed worksite access. If a CO instructs a contractor to continue work without pay, the standard disputes provision in most contracts (FAR 52.233-1) requires the contractor to continue performance while the dispute is resolved.

The Government is likely to deny requests for equitable adjustment and certified claims for costs by asserting the Sovereign Acts doctrine, which relieves the Government of liability for interference with a contract when the interference was the result of a Government action taken in the national interest and with a general and public application. A shutdown such as this one usually will qualify as a sovereign act. There is some case law suggesting that the Government can choose to accept liability for increased costs caused by a shutdown if the CO issues a suspension of work or stop work order. In any event, contractors should be entitled to additional time.

For any contractor in active litigation against the Government, we recommend that they continue to meet all filing deadlines. Many deadlines, such as for filing an appeal of a contracting officer’s final decision, filing a bid protest, and filing a small business size or status protest, are jurisdictional; they will not be waived as a result of the shutdown. Failure to meet those deadlines will result in the case being dismissed as untimely.

Other filings are not jurisdictional, but we recommend that contractors continue to comply with any existing scheduling orders and filing deadlines to the extent possible in light of any limited access to the various tribunals. Based on available information, following is the current status of relevant courts, boards, and other tribunals:

Federal Courts (Court of Appeals for the Federal Circuit, Court of Federal Claims, U.S. District Courts): The Judiciary expects to remain open through January 18, 2019 using court fee balances and other no-year funds. In cases involving Executive Branch attorneys, hearing and filing dates may be modified.

Civilian Board of Contract Appeals: Open to accept electronic filings only. Each judge has the discretion to modify non-statutory deadlines.

Armed Services Board of Contract Appeals: Open and fully operational.

Government Accountability Office (GAO): Open and fully funded through 2019. Filing deadlines for private parties will not be waived.

Small Business Administration Office of Hearings and Appeals (OHA): The shutdown is being treated as an extended federal holiday for purposes of filing. Any OHA filing due during the shutdown will be due on the first day of normal operations after the shutdown. SBA’s contingency plan states that there will be no employees staffing OHA during a shutdown.

SBA Office of Government Contracting and Business Development (this office decides certain size and status protests): SBA’s contingency plan shows one employee out of 168 total employees continuing to work during a shutdown. Attempts to contact the office for additional information have been unsuccessful.

This is only a portion of the agencies and tribunals a contractor may interact with. For more information, contact Gene Heady at 404-582-8055 or [email protected] or Jake Scott at 202-452-2140 or [email protected].