Now that we are two years into the COVID-19 pandemic in the United States, it should come as no surprise that several cases discussing whether COVID-19 is an excusable delay have made their way through the ASBCA and CBCA dockets. These cases show that although COVID-19 may be treated as an "epidemic" under the right circumstances according to the enumerated excusable delays in the FAR, the boards have no intention of treating the pandemic as a cure-all for contractors facing potential terminations for default.
The February 2022 decision in Central Company, ASBCA No. 62624, involved Central's contract with the Air Force to design and build a fairly small one-story storage building and yard at Grissom Air Reserve Base in Indiana. Despite it being a relatively simple construction project, Central encountered a number of problems and did not have an approved progress schedule and none of its design documents approved by the contract's completion date. The Air Force subsequently terminated Central for default, and Central challenged it on the grounds COVID-19 impacted its work. The ASBCA rejected Central's reliance on COVID as an excuse for performance because Central failed to actually link any of its delays to the pandemic. The ASBCA noted that Central was already well behind schedule when it began claiming negative impacts from COVID. Even if this weren't the case, the Board reasoned that Central's outright failure to demonstrate how exactly COVID impacted its work-other than making blanket statements about its impacts-meant the Air Force's termination for default was proper.
Two recent sister cases before the CBCA further addressed why COVID-19 would not be treated as a save-all for contractors facing terminations for default. In ORSA Technologies, CBCA 7141 and ORSA Technologies, CBCA 7142, various VA Network Contracting Offices issued separate requests for quotes seeking contractors to provide nitrile gloves they may have "on hand" when marketplace shortages arose during the COVID-19 pandemic in early 2021. Both the VA Network Contracting Office in Murfreesboro, Tennessee and the Network Contracting Office in San Antonio, Texas selected ORSA for award, and both Offices emphasized the importance of carrying out the contracts. Nevertheless, ORSA was unable to deliver suitable gloves by the contracts' deadlines (despite even being allowed to substitute products in one case) and was terminated for default in either contract.
ORSA sought to overturn the default terminations by reason of excusable delay. The CBCA rejected this argument. The Board pointed to the clear directions in the RFQs that stated that the gloves be "on hand," "in-stock," and "available for immediate delivery" when ORSA was awarded the contracts. The CBCA held that ORSA could not now complain of excusable delay when, at the outset of the contract, ORSA had misstated its compliance with contract requirements and was unprepared to deliver the requested gloves. Additionally, the CBCA found that the shortages ORSA experienced causing it to fail to deliver the gloves were entirely foreseeable. The reason the government was requesting contractors deliver "on-hand" gloves in the first place was in response to the COVID-19 shortages in the marketplace. The Board concluded that because the shortage began before the contract was awarded (and one of the contracts was subsequently modified to allow substitute products), it was not an unforeseeable risk beyond ORSA's control.
These cases illustrate why it is important for contractors not to assume COVID-19 will excuse any and all delays the contractor may face on its federal contracts. For the delay to be deemed excusable under the FAR, contractors will need to specifically identify exactly how COVID-19 has impacted their work. Moreover, the fact that a contractor experienced a delay relating to COVID-19 may still not be enough. If the delay was foreseeable when the contract was formed, especially in those contracts executed after the pandemic and market shortages began, boards are less likely to treat delays related to these issues as excusable delays.
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