Last September we told you about an August 2009 DOD Class Deviation that addressed continuity of mission critical services that will “enable agencies to continue their essential functions across a broad spectrum of emergencies.”  The Class Deviation provided DOD Contracting Officers with clauses that contained language directed at certain contractors, such as “expected to use their best efforts to continue providing such services, in accordance with the terms and conditions of their contracts even during periods of crisis."  We noted that the new clauses might create some ambiguity between them and the “excusable delays” and “termination for default” clauses, which specify rights and remedies for the contracting parties when the contractor cannot perform the work.  Finally, we opined that “it is nice to require ‘full cooperation’ during times of emergency, but it is doubtful how much contractors can actually do to compel employees to come to work, if they choose not to.”

So it should not come as any great surprise that on March 5, 2010, DOD published in the Federal Register notification of intent to promulgate an interim rule codifying its 2009 Class Deviation into an official DFARS regulation.  See the Federal Register notice here.

The interim rule established a new DFARS Subpart—237.76 “Continuation of Essential Contractor Services”—that provides definitions of the terms relevant to the issue, a policy statement, and a new contract clause for DOD contracts.  The new clause (252.237-7023) performs much the same function as the clause(s) contained in the Class Deviation.  It puts the contractor on notice that some or all of its services provided under the contract are considered to be “essential contractor services” as that term is defined in the regulations, it requires preparation of a written plan “for continuing the performance of essential contractor services … during a crisis,” and requires notification and cooperation in the event of non-performance.  For cost accountants, note that the clause requires segregation of all costs incurred in “continuing performance of essential services in a crisis situation,” as well as notification of any associated contract cost impact within 90 days after commencement of those continued services. Finally, this language in the new clause caught our attention:  “As directed by the Contracting Officer, the Contractor shall participate in training events, exercises, and drills associated with Government efforts to test the effectiveness of continuity of operations procedures and practices.”

On a related note, the DFARS revision is being promulgated as an “interim rule” because “This action is necessary to ensure that essential contractor services are not interrupted by crises such as those caused by hurricanes, tornados, earthquakes, blizzards, floods, or pandemic influenza.”  Curiously, we were unable to locate any mention of the existing Class Deviation, which would seem to reduce the urgency of the matter.

As always, the public may submit comments on new promulgations at www.regulations.gov.  Mention DFARS Case 2009-D017 in your submission, should you choose to make one.