Alerts and Updates

U.S. Army Corps of Engineers to Award Contracts to Convert Existing Buildings into ICU-like COVID-19 Treatment Facilities, Starting in New York

March 24, 2020

USACE’s stated goal is to complete the first facility by mid-April to support the projected demand for COVID-19 medical services.

During a press conference on March 20, 2020, the U.S. Army Corps of Engineers (USACE) discussed plans to assist state-level COVID-19 relief efforts. USACE support will include the conversion of existing, underutilized buildings such as hotels, college dormitories and potentially large spaces into ICU-like treatment facilities. Specifically, state governments will nominate and lease facilities, USACE will award construction contracts for building modifications, FEMA and/or HHS will provide necessary supplies, and then state governments will provide staffing.

Imminent USACE contracts will likely include flexible design specifications for modifying hotel rooms or other spaces to support patient care, convert rooms to negative pressure and build nursing stations in the hallways with wireless connectivity. USACE’s stated goal is to complete the first facility by mid-April to support the projected demand for COVID-19 medical services. New York will be used as a model for other states as they request federal support.

Although the briefing did not discuss contracting methods, USACE may use sole source authority to award contracts to existing government contractors, who will likely have a tight window for contract negotiation and performance. Interested contractors can also register their unique capabilities in the System for Award Management (SAM) Disaster Response Registry by logging in and editing the assertions tab in their registration. 

Potential federal contractors will likely encounter a multitude of performance risks in fulfilling these construction requirements to quickly create temporary hospital spaces to treat COVID-19. In addition, potential state contractors leasing hotels and other facilities to governments face a number of risks, including an unknown period of performance, holdover tenancies, cost and timing of restoration and uncertain termination rights.

About Duane Morris

Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.

For More Information

If you have any questions about this Alert, please contact Michael E. Barnicle, Matthew A. Freeman, Michael J. Schrier, any of the attorneys in our Government Contracts and International Trade Group, any of the attorneys in the Construction Group, any any of the attorneys in the COVID-19 Strategy Team or the attorney at the firm with whom you are in regular contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.