Coronavirus May Impact Government Contractors

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Coronavirus Impacts Government Contractors

Coronavirus Impact on Supply Chain This disease has interrupted the global supply chains resulting in limited availability of supplies and products. As a result, government contractors may not be able to obtain the supplies and products that they need to meet the performance requirements of their contracts.

Government Contractors Impacted by Coronavirus

Who would have thought that a virus could impact not only the United States but the world? This Coronavirus has created challenges for government contractors. As a result, it is best if government contractors anticipate the following problems with regards to their federal contracts.

Coronavirus Impact On Supply Chain

This disease has interrupted the global supply chains resulting in limited availability of supplies and products. As a result, government contractors may not be able to obtain the supplies and products that they need to meet the performance requirements of their contracts. Besides the supply and product issue, let’s look at the impact the Coronavirus may have on employees.

Coronavirus Impact on Employees

As a small business owner, you must address your ability to continue operating, while at the same time, ensuring the safety of your employees. It can be overwhelming to comply with governmental travel restrictions and following CDC guidelines. Add to that OSHA, EEOC, FMLA, and potential workers’ compensation claims and employee privacy rights. That is enough to make your head spin.

Financial Risk

Not only do you have to be concerned with your employees but also your business itself. If you fail to perform on these government contracts may cause reputational harm to your business. Thus, making it difficult for you to do business in the future. But what can you do?

Force Majeure Clause

You will need to check your contracts for the force majeure clause. This clause is standard in commercial and government contracts. This clause allows a party to suspend or terminate the performance of a contract. But only due to extreme circumstances beyond the control of either party. Since the Coronavirus is a global pandemic, a government contractor could invoke this clause.  

What Should You Do?

You will need to review your contracts to see if it contains the force majeure clause. In addition to this clause, you may also seek relief through common law doctrines of impracticability and impossibility. As an example, a government contractor could show that the Coronavirus made it impossible for you to perform your contractual obligations. Lastly, your insurance policy may cover force majeure situations. So you may want to review your insurance policy.

Summary

While this virus has impacted the world eventually, things (hopefully) will return to normal. In the meantime, you must do everything within your power to perform on your contracts. If you cannot complete the contracts do to something outside your control, then use the Force Majeure Clause.

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