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Covid-19 | Bulletin

Triggering an “Excusable Delay” Claim During the COVID-19 Pandemic: What Federal Contractors Need to Know

Fasken
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Procurement Bulletin

Information for Federal Government Contractors

The COVID-19 pandemic has caused disruptions and slowdowns in almost all industries. The situation is fluid - government, business and social response to COVID-19 have been and must continue to be dynamic.

Contractors should expect changes to the federal government procurement processes, as it strives to manage issues and events.

  • Public Services and Procurement Canada (PSPC) has already announced that active procurements may experience delays and is encouraging bidders to submit bids electronically using epost Connect  (bidders: take note as to whether the procurement you are participating in permits electronic submission before doing so, as it could lead to disqualification of your bid).
  • Office hours for regional Bid Receiving Units may be modified. (for contact information see: Public Works and Government Services Canada). 

Federal government contractors should review their contracts now, to determine if their contract(s) contain an "Excusable Delay" clause and to ensure they understand the requirements to be met to leverage the benefit of an exception from contract performance, should it become necessary to do so. This is particularly relevant to government contractors who are subject to Supply Chain Integrity requirements, and may be facing potential or actual supply chain related issues such as delays in deliveries, cross-border movement of goods and people, or their suppliers having to suspend or close their operations.

Federal government contracts that contain Standard Acquisition Clauses and Conditions- General Conditions for goods or services, will likely have an "Excusable Delay" clause. Even if these general conditions are not applied in their entirety, a similar type of clause will likely exist in contracts issued by departments, agencies and Crown corporations that contract independent of PSPC or Shared Services Canada. 

Locating the Excusable Delay Clause in your Contract

Federal government contracts typically incorporate the Standard Acquisition Clauses and Conditions by reference to a clause number as opposed to setting them out in full in the contract.

Click here for the Standard Acquisition Clauses and Conditions

Before searching for the clause at buyandsell, first confirm that no amendments to the standard clause were made in your contract, and ensure that you review the version of the clause that is identified in your contract (see the link to "Revision History" at the top of the buyandsell page if your contract is subject to an older version of the standard clauses).

Contractors with Shared Services Canada should pay particular attention to the excusable delay clauses in their contracts. As noted in previous Fasken bulletins, Shared Services Canada has modified the standard government procurement clauses, and in certain cases has reduced payments to contractors for those otherwise provided for in the standard clauses.

Why Does an "Excusable Delay" Clause Matter?

An Excusable Delay clause permits contractors to seek relief from contract performance when an "excusable delay" event occurs. The current version of the Standard Acquisition Clauses and Conditions defines an Excusable Delay as an event  that meets the following four criteria: 

  • is beyond the reasonable control of the contractor;
  • could not reasonably have been foreseen;
  • could not reasonably have been prevented by means reasonably available to the contractor; and,
  • occurred without the fault or neglect of the contractor[1].

How to Gain the Benefit of the Clause

If the contractor's delay in performance meets the four criteria above, the standard excusable delay provision requires that contractors take the following steps:

  • notify the contracting authority of the excusable delay in order to gain the benefit of the clause;
  • provide notice to the contracting authority within a specific period of time (usually 15 days or less) and using the required notification process; and
  • prepare and provide a clear work around plan to overcome the excusable delay.

Government Rights to Terminate in an Excusable Delay Scenario

Excusable Delay clauses usually reserve a right for the government to terminate any contract if the delay continues for a period of time (often only 30 days). In the event of termination,  cost recovery may be limited to those costs provided for in the Excusable Delay clause.

Federal Government Currently Seeking Suppliers to Help with the COVID-19 Response

If you are a supplier of the goods or services listed below (and whether or not you are a current government supplier), the federal government is interested in hearing from you.

Go to: Calling all suppliers – Help Canada combat Coronavirus disease (COVID-19)   

Products

  • Disposable N95 masks
  • Disposable surgical masks
  • Nitrile gloves
  • Vinyl gloves
  • Gowns
  • Bottles of hand sanitizer
  • Other prevention products

Services

  • Guard / security services
  • Nursing services
  • Food services
  • Laundry services
  • Accommodation maintenance services
  • Personal services
  • IT support services
  • Other services


[1]  In prior SACC provisions, action or inaction of a government entity was considered grounds for excusable delay (and thus clearly addressed declarations of emergency or closure of boarders). We note that revisions to the clauses in recent years has removed this express language.

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