WASHINGTON—Today, House Committee on Oversight and Reform Ranking Member James Comer (R-Ky.) sent a letter to Department of Defense Secretary Lloyd Austin, National Aeronautics and Space Administration Administrator Bill Nelson, General Services Administration Administrator Robin Carnahan, and Office of Federal Procurement Policy Acting Administrator Lesley Field urging a government-wide review of federal contractor guidance and their plans to address the disparate impacts of President Biden’s ongoing supply chain crisis on contractor delivery requirements.
“The COVID-19 pandemic dampened our economy and critically disrupted our supply chains. Due to labor shortages and growing backlogs, the supply chain crisis is now expected to last at least through 2022—likely well into 2023. It is reasonable to assume such backlogs will impact federal contractors’ ability to fulfill contract obligations due to a situation beyond their control. Meanwhile, government contractors, whose supplies are stuck in the backlog may face penalties for delayed performance on their obligations,” wrote Ranking Member Comer.
Despite the Committee’s initial inquiry on October 14, 2021, the Biden Administration has failed to address its self-induced supply chain crisis and small business contractors may now be hit particularly hard by late fees and penalties—making it unlikely they will survive the crisis.
“While enforcing contractual deadlines is normally necessary to protect the interests of the American taxpayer, appropriate forbearance should be exercised when the situation merits. According to the Federal Acquisition Regulation, excusable delays for contractors include delays which are unforeseeable and beyond the control of the contractor. A global pandemic and supply chain collapse should be considered unforeseeable. Penalizing contractors, many of whom bid on and were awarded contracts prior to the collapse of the supply chain, will further disrupt the economy. We request that you review department and agency guidance on when and whether to hold these contractors to certain deadlines in light of the supply chain crisis and the ongoing pandemic,” concluded Ranking Member Comer.
To better understand how federal agencies will be handling contracting delays due to the supply chain crisis, Ranking Member Comer is requesting documents and information showing whether any government contractors have been penalized for failing to meet their contractual obligations.
Read the full letter here.