A few thoughts with regards to taking “reasonable steps to minimize the incurrence of costs allocable to the work covered by this Notice during the period of work stoppage” for USAID #stopworkorders, documenting your rationale for what is reasonable, and other operational steps you can take to prepare you for requesting an equitable adjustment to your contract once the SWO period is over.
Reasonable steps should be interpreted as making best efforts to identify where costs can be removed or shifted. The most pressing costs in question are with regards to your full-time project staff. If your company has other streams of income, either with other USG agencies or with non-USAID donor agencies like the World Bank, FCDO, etc. identify where you might be able to shift your staff to those efforts. Similarly, if you have corporate initiatives either to pursue new business opportunities from a diversified client pool or to improve internal processes, make efforts to have these full-time project staff contribute to those initiatives and bill their time to the requisite charge code. Any time they do not spend on these efforts should still be billed to their original project.
If you are a small business and have no such ability to shift staff to other initiatives, then it is reasonable to keep them in place. Some of the SWOs we are seeing indicate that “This Stop-Work Order does not apply to non-program-related activities, such as the payment of salaries and indirect costs”, so if you see this in your SWO then you are probably safe to keep staff in place. If you do not see this language in your SWO, you may still have reason to keep staff in place, as USAID should be treating all projects globally equitably with regards to what costs are considered reasonable to continue incurring.
In spite of that, for companies that have the capacity to do so, a “reasonable” step would still be to attempt to put FO staff on other non-AID projects or contribute to corporate initiatives, as mentioned above. But this is a tall order for small businesses who don’t have a lot of excess cash flow to spend, so is it really that reasonable for them? Probably not. My point here is that if your company does not have the ability to transfer staff to other initiatives, you may be able to make a case to your CO that it is reasonable to keep billing staff salaries. On top of that, moving forward with project staff employment terminations is extreme and unwarranted, as USAID has not given you a termination notice. Plus, it could be just as costly to terminate current staff and then have to look for new talent should the SWO be lifted, not to mention the hindrance to getting program activities back on track, since you’d effectively be back in start-up mode, where new staff would have a learning curve that prior staff did not have. Thus, you can make the argument to USAID that the best approach is to keep staff in place unless USAID decides to move forward with termination.
I would also advocate that primes go to bat for their subs who also have long-term field staff in place. Why should they be treated any differently than the primes, particularly when the majority of subs are made up by small businesses and local partners who are more likely to be hurt by these orders than the larger prime IPs?
Field Office costs including your lease, utilities, internet, and so forth may need to stay in place. These costs are relatively low in the grand scheme of project expenses and if your office was leased specifically for the project in question, and losing the space would make it difficult to resume activities once the SWO is lifted, then it could be reasonable to keep the lease going.
Costs that should cease include any technical activities, such as events (workshops, trainings, etc.) or short-term assignments and subcontracts that were in the works. Likewise, any solicitations you’d released prior to the SWO should be canceled immediately.
Most importantly with all of the above, make sure you document in a memo to your project file the efforts you’ve made to minimize costs and the rationale you arrived at to continue incurring specific costs. And once you’ve spoken with your CO, share this outline with them so that both parties have something in writing to refer to, thus minimizing the risk of disputes or miscommunication.
I also recommend you create new charge codes for each award that is under a stop work order and ensure that all costs, including staff time, being incurred under the project during the period of the stop work order be billed to those codes. This will make it easier for you to disaggregate costs incurred during the SWO period from those incurred when you were actively working on and/or resume project activities. The reason this is important is because if your SWO is canceled, you are entitled to seek out “an equitable adjustment in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other terms of the contract that may be affected” by the SWO, as per FAR 52.242-15 Alt I (Alt I is for reimbursable contracts; the unaltered clause applies to fixed price). In practice what this serves to do is to demonstrate that you continued incurring minimal costs during the SWO process, but these costs were not being used for their intended purposes – that is, delivering on your SOW. And so, an equitable adjustment to your contract price to tack on these SWO-associated costs may be negotiated. Likewise, associated indirect costs may be included in that adjustment. However, it’s unlikely that an additional fee would be entertained for those costs since technically no programmatic activities were supported during the period of the SWO. Fee, by its very nature, is intended to be paid as a result of work being achieved. However, if ramping back up once the order is lifted causes you to incur additional costs in support of the program that were not originally anticipated, your equitable adjustment may also account for those additional costs, along with associated indirect costs and fixed fee.
