President Invokes Stafford Act: What that Means for Federal Contractors

Under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5121-5207), or more commonly the “Stafford Act,” the President can declare an “emergency” or, if the incident is more serious, a “major disaster.” These declarations, among other things, give federal contracting officials certain acquisition flexibilities not normally available.

In response to COVID-19, President Trump declared a nationwide emergency (an unusual step because these declarations are typically limited to a limited geographic area). And he has since approved major disaster declarations for at least seven states: New York, Washington, California, Iowa, Louisiana, Texas, and Florida. What are some of the flexibilities that have been unleashed by these declarations and how might they impact federal government contractors?

For one, as provided in FAR Subpart 18.2, the declarations increased the micro-purchase thresholds–for supplies or services needed to respond to the emergency or major disaster–from $10,000 to $20,000 for purchases made inside the United States and to $30,000 for purchases made outside the United States. It also raised the simplified acquisition threshold–again, only for responsive supplies and services–from $250,000 to $750,000 for domestic purchases and $1.5 million for purchases outside the United States. Similarly, for commercial items, agencies can use simplified acquisition procedures for purchases up to $13 million.

Also, as noted above, the President typically declares emergencies or major disaster for a defined geographic region. To assist recovery efforts in those areas, contracting officials must typically give preference to local firms. For example, under FAR 18.203: “Preference will be given to local organizations, firms, and individuals when contracting for major disaster or emergency assistance activities when the President has made a declaration under the [Stafford Act]. Preference may take the form of local area set-asides or evaluation preference.” See also FAR Subpart 26.2.

OMB advised last week, however, that this preference for local firms isn’t necessary given the nationwide scope. But that guidance was offered before the major disaster declarations for the states, listed above, were issued. So, contractors may begin to see some Stafford set-aside contracts for certain states or other hot spots as time unfolds and the government’s response becomes more targeted.

If Stafford set-aside contracts are rolled out, contractors should get familiar with the Disaster Response Registry. This database lists contractors which are willing to provide “debris removal, distribution of supplies, reconstruction, and other disaster or emergency relief supplies and/or services,” and provides contracting officers a ready resource when procuring emergency supplies and services. You can find out how to add your company to the registry by following the link above. Of course, it’s always better to have registered before disaster strikes, but given the ongoing nature of the COVID-19 response, registering now might still prove beneficial.

A presidential declaration under the Stafford Act also triggers GSA’s Disaster Purchasing Program. This program allows eligible entities, such as “any State, local, regional or tribal government, or any instrumentality thereof,” (including elementary, middle, and high schools, charter schools, public and non-profit colleges, and universities) to purchase supplies and services off GSA schedules for recovery purposes.

In that regard, the program is quite liberal because the “Department of Homeland Security has determined that all of the products and services available under GSA Schedules should be available under the Disaster Purchasing Program.” So, if you’re a GSA Schedule holder and see a local government buying your services or supplies, don’t be alarmed. In fact, you should see the following language on all orders placed by eligible state and local buyers: “This order is placed under GSA Schedule number [insert number here] under the authority of the GSA Disaster Purchasing program. The products and services purchased will be used in preparation or response to disasters or recovery from major disaster declared by the President, or recovery from terrorism or nuclear, biological, chemical, or radiological attack.”

In sum, the President’s declaration under the Stafford Act offers some interesting opportunities for federal government contractors which deviate from the norm. Although heavily important now, the Stafford Act will certainly come into play in future disasters as well. Understanding some of its unique features will allow contractors to position themselves well to meet federal and local recovery needs.

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