Overview
FAR 26.203 establishes the requirement for federal agencies to transition emergency response, relief, and reconstruction work from non-local contractors to local firms following a Presidential declaration of a major disaster or emergency. The policy aims to support the recovery of the local economy by ensuring that disaster-related contracts are not unnecessarily broad or long-term, facilitating a hand-off to qualified local businesses.
Key Rules
- Pre-Emergency Planning: Agencies should award emergency contracts before disasters occur but must structure them with limited scopes and durations to avoid inhibiting future transitions to local firms.
- Mandatory Transition: Under 42 U.S.C. 5150, agencies must transition work active at the time of a disaster declaration to local firms unless the agency head provides a written determination that transition is not feasible or practicable.
- Timing and Milestones: While agencies are not required to terminate existing contracts, they must transition work at the "earliest practical opportunity," specifically considering logical break points such as the exercise of an option period.
- Decision Factors: When planning a transition, agencies must evaluate the disaster's severity and duration, the impact on safety and national defense, and the availability of qualified local offerors at reasonable prices.
- Execution Mechanism: The transition to local firms must be executed using the local area set-aside procedures identified in FAR 26.202-1.
Practical Implications
- For Non-Local Contractors: Large or national firms holding "standby" emergency contracts should anticipate that their performance may be limited to the immediate response phase, with subsequent work being "carved out" for local businesses.
- For Contracting Officers: There is a significant administrative requirement to document "feasibility" if a transition is not pursued; otherwise, the default regulatory expectation is to shift the work to the local community as the emergency stabilizes.
- For Local Businesses: This section creates a protected market opportunity for local firms to take over long-term reconstruction and relief efforts once the immediate life-saving phase of a disaster has passed.