This Note discusses issues related to the National Emergencies Act, Title 10 of the United States Code, and the Federal Acquisition Regulation (FAR) through the lens of public procurement. Focusing on President Trump’s national emergency on the Southern border, this Note will discuss the background of government exceptionalism in public procurement, the President’s national security powers through the lens of Youngstown Sheet & Tube Co. v. Sawyer, especially in the context of a national emergency, and the processes of the construction of, and later termination of, contracts related to the construction of the wall. This Note will then propose three solutions to protect government contractors from being terminated for convenience: amend the National Emergencies Act, Title 10 of the U.S. Code, and the FAR.
In February 2019, then-President Donald Trump declared a national emergency at America’s southern border. President Trump then diverted funds appropriated for other government contracts to finance the construction of a barrier between the United States and Mexico. As of 2020, the federal government had spent about “$11 billion in taxpayer funds” on this project, but the Biden administration later ended the national emergency and paused the remaining contracts for the wall, leaving contractors to negotiate settlement agreements with the federal government. As of April 2024, some of these negotiations are paused as a result of litigation surrounding the original sources of funding.
This Note seeks to prevent future administrations from declaring national emergencies to divert appropriated funds to long-term projects not sanctioned by Congress. This action would serve to protect contractors from being terminated for convenience (T4C). First, this Note provides background on both government exceptionalism and government limitations in the field of public procurement by discussing the power of T4C clauses and the importance of only spending appropriated funds. Second, this Note discusses the President’s powers in the realm of national security, especially focusing on actions they would be permitted or prohibited from taking during a national emergency. Third, this Note provides background on President Trump’s actions in diverting federal funds for the construction of the wall, President Biden’s termination of the project, and the wall’s legacy. Finally, this Note proposes that Congress amend the National Emergencies Act and Title 10, which controls the President’s national emergency powers, to reign in the executive’s ability to divert appropriated funds, prohibits the use of those funds for long-term contracts without express congressional authorization, and clarify the scope of presidential power. In addition, this Note proposes that the Federal Acquisition Regulation (FAR) Council amend the FAR to outline how the President may divert federal funds in a national emergency and the nature and scope of permissive contracts involved at such a time.
The field of government contracts is quite different from the field of private contracts. In some areas, the government has less power when compared with private sector contracting, such as the government’s contracting requirement that contracts between specified dollar thresholds be awarded to small businesses. This contrasts a private company’s ability to do business with any company it chooses. In other areas, the government has more power, sometimes called government exceptionalism. Features of government exceptionalism include powers that the government has that would otherwise be considered a breach of contract for private entities. Examples of these powers include the ability to unilaterally change a contract, terminate a contract for convenience (T4C) in whole or in part, and the power of courts to read in certain clauses in contracts that were not originally included. While these are all examples of government exceptionalism, this Note will focus primarily on the government’s power to T4C. This section will begin by discussing the limitations imposed on the government by congressional appropriations, then shift to a brief overview of the broad discretion given to the government to T4C a contract when in the best interest of the United States.
In the world of government contracts, the government may only spend money that has been appropriated to it by Congress, a requirement that appears in the Anti-Deficiency Act and the FAR. Under the Anti-Deficiency Act, a Contracting Officer (CO) cannot solicit bids for a contract if the funds have not been appropriated to that agency. That statute prohibits any government official from “mak[ing] or authoriz[ing] an expenditure or obligation exceeding an amount available in an appropriation or fund for the expenditure or obligation; [or] involv[ing] either government in a contract or obligation for the payment of money before an appropriation is made unless authorized by law.” The FAR includes a section dedicated to the Anti-Deficiency Act as well: “[n]o officer or employee of the Government may create or authorize an obligation in excess of the funds available, or in advance of appropriations (Anti-Deficiency Act, 31 U.S.C. § 1341), unless otherwise authorized by law.” In the event of a national emergency, however, several statutes supersede the Anti-Deficiency Act and the FAR, allowing the government to divert appropriated funds to other projects related to the emergency. While the appropriations power restricts the government from entering a contract without funding from Congress, government exceptionalism allows the government to terminate a contract when doing so serves the government’s interest.
When engaged in contracts, a distinction must be drawn between a typical private contract, a contract between non-government entities, and public procurement, a contract between the government and a private contractor. Under a private contract, parties are bound by the agreement until that agreement is discharged. In public procurement, however, the government may terminate a contract at any time for convenience, so long as that termination is done in good faith. The only question that remains is the amount the government owes a contractor for work already completed.
In a typical private breach of contract case, the non-breaching party would likely receive expectation damages equal to the amount they expected to be paid, putting them in the position that they would have been had the contract been discharged. In public procurement, however, the contractor is first required to submit a “settlement proposal,” which the CO may agree to or unilaterally determine a different fair price and pay the contractor accordingly.
Once a contract is T4C, the contractor is required to submit a settlement proposal. If the CO agrees with the contractor’s settlement proposal, the contractor is paid according to the terms of the proposal, with the restriction being the sum of the proposal “not exceed[ing] the total contract price as reduced by (1) the amount of payments previously made and (2) the contract price of work not terminated.” If, however, the CO and the contractor cannot agree to a settlement, the contractor is entitled to the following three categories of payment: (1) the cost of the work already performed; (2) “[t]he cost of settling and paying termination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the contract” (if not already included in category (1)); and (3) a reasonable profit, unless the contractor has a net loss on the project. Contractors are also entitled to costs related to “the preparation of the termination settlement . . . [and] other costs incurred, reasonably necessary for the preservation, protection, or disposition of the termination inventory.” While this is a reasonable payment to the contractor for work performed, it is not the traditional common law damages the contractor would have received if the government engaged in a total breach of the contract, such as expectation damages.
While government exceptionalism allows the government to T4C a contract if it is in the government’s best interest, its contracting ability is greater during a national emergency. Turning next to the President’s national emergency powers, this Note will provide a historical account of the now-infamous Youngstown Sheet & Tube Co. v. Sawyer (Steel Seizure Case), outlining the permissive scope of presidential power. This Note will then pivot to a discussion of the president’s current statutory national emergency powers to provide background on the complexities of the situation on the Southern border.
In 1951, employees of several steel mills attempted to renegotiate their collective-bargaining agreements with their respective employers; however, those negotiations failed. As a result, the union employees threatened to go on strike on April 9, 1952. Because the United States was engaged in the Korean War during the strike, President Truman issued Executive Order 10340, which contained, in part, an authorization for the Secretary of Commerce to nationalize the steel industry.
In response to Truman’s executive order, the affected steel mills brought an action against the Secretary of Commerce, which had been appealed before the U.S. Supreme Court, seeking injunctive relief to prevent the seizure of their industry. In his concurring opinion, Justice Jackson outlined three categories of presidential power. First, if the President is acting in unison with Congress, “his authority is at its maximum, for it includes all he possesses in his own right plus all that Congress can delegate.” Second, if Congress was silent on an issue, the President “can only rely upon his own independent powers, but there is a zone of twilight in which he and Congress may have concurrent authority, or in which its distribution is uncertain.” Third, if Congress expressly or implicitly prohibits presidential action, “his power is at its lowest ebb, for then he can rely only upon his own constitutional powers minus any constitutional powers of Congress over the matter.”
In the case of the steel seizure, Justice Jackson’s concurrence stated that Truman’s action did not fall within the first two categories of presidential power because the legislative branch did not authorize Truman’s actions and “Congress has not left seizure of private property an open field.” Therefore, presidential action fell within the third category, where Presidents can only lawfully act in areas where they have constitutional powers over Congress’s powers. Typically, only majority opinions are controlling; however, Justice Jackson’s concurrence has become infamous in areas of national security and constitutional law. Courts have heavily relied on the three categories outlined by his concurrence, categorizing, expanding, and contracting executive power. Justice Jackson’s concurrence remains good law, albeit the Court has subsequentially recognized Jackson’s three categories fall more into a spectrum than strict categorizations of presidential power through gradual evolution in precedents.
While the President’s national emergency power is not explicitly enumerated in the U.S. Constitution, the President may use that power nonetheless in areas of national concern, so long as that power is granted by Congress. Therefore, a President’s actions during a national emergency likely falls within category one. That power stems from the National Emergencies Act (NEA), as it authorizes the President to declare a national emergency. The NEA states that, “[w]ith respect to Acts of Congress authorizing the exercise, during the period of a national emergency, of any special or extraordinary power, the President is authorized to declare such national emergency.”
The NEA also limits the areas a President may act after declaring an emergency and requires the President to cite the authority they intend to use. Since its enactment in 1976, every President since Jimmy Carter has issued an emergency declaration under the NEA, and the NEA has been invoked at least sixty times since its passage.
The FAR has its own part outlining exceptions to procurement regulations once a national emergency is declared. FAR Part 18 outlines several exceptions to its general regulations, especially dealing with bid solicitations. FAR 18.000 explains, “This part identifies acquisition flexibilities that are available for emergency acquisitions. These flexibilities are specific techniques or procedures that may be used to streamline the standard acquisition process.” The FAR also allows for an agency to supplement the standards for an emergency. That being said, the Homeland Security Acquisition Regulation (DHS’s supplement to the FAR) only adds, “DHS Components may assign priority ratings on contracts and orders as authorized by the Defense Priorities and Allocation System (DPAS).”
Applying these authorities to a more modern case study, this Note will focus on President Trump’s declaration of a national emergency on the Southern border by providing background on the declaration and steps President Trump took to secure funding. Next, President Biden’s canceling of the contracts created by the Trump administration will be discussed. Finally, this Note will address issues related to the expediency of the wall’s construction.
In January 2017, President Trump issued Executive Order 13767, outlining his policy to construct a wall on the southern border. Approximately a year later, while Congress was negotiating an appropriations bill for the 2019 Fiscal Year (FY), President Trump requested $5.6 billion to construct a fence along the United States’ southern border with Mexico. Democratic leadership countered with $1.3 billion, earmarked for general “border security,” which the President rejected. This response led the President to refuse to sign any appropriations bill that Congress would have passed. A deadlock between the executive and legislative branches ensued, leading to the “longest [government] shutdown in U.S. history.” President Trump eventually signed a bill temporarily funding the federal government. In response to Congress’s failure to appropriate the amount of funds that President Trump requested, the President then declared a national emergency at the Southern border by issuing Proclamation 9844 without referencing funding for the project. The only two references to funding the project were contained in the 2017 executive order the President issued. The first reference stated that “[t]he Secretary [of Homeland Security] shall immediately . . . [p]roject and develop long-term funding requirements for the wall, including preparing Congressional budget requests for the current and upcoming fiscal years.” The second reference stated that “[t]his order shall be implemented consistent with applicable law and subject to the availability of appropriations.”
Proclamation 9844 simply created a national emergency. On the same day that the proclamation was issued, however, President Trump released a fact sheet that outlined sources of funding for the construction of a wall. Included in those sources of funding were “[a]bout $601 billion from the Treasury Forfeiture Fund[,] . . . [u]p to $2.5 billion under the Department of Defense [(DoD)] funds transferred for Support for Counterdrug Activities [, and] . . . [u]p to $3.6 billion reallocated from [DoD] military construction projects.”
In part, the President relied on a statutory framework that outlines presidential power to enter into construction contracts during a national emergency:
In the event of . . . the declaration by the President of a national emergency in accordance with the National Emergencies Act (50 U.S.C. § 1601 et seq.) that requires use of the armed forces, the Secretary of Defense, without regard to any other provision of law, may undertake military construction projects, and may authorize the Secretaries of the military departments to undertake military construction projects, not otherwise authorized by law that are necessary to support such use of the armed forces.
The statute specifies what funds can be used, emphasizing that the President may only use funds designated for “military construction.”
President Trump also relied on “Section 8005 of the 2019 DoD Appropriations Act to transfer funds from other DoD appropriations accounts.” Section 8005 allowed the President to transfer up to $4 billion in DoD-appropriated funds when “such action is necessary in the national interest,” so long as those funds were originally not appropriated for “military construction” projects. Furthermore, Section 8005 restricts the use of this section to only deliverables that are “higher priority . . . than those for which [funds were] originally appropriated and in no case where the item for which funds are requested has been denied by Congress.”
In total, President Trump diverted roughly $11 billion from DoD funds, with $2.5 billion coming from the authority under Section 8005. As a result, 458 miles of the barrier were completed, totaling roughly $14.4 million per mile, and “[a]bout 127 defense department projects were initially paused in September 2019.” This funding comes from both international and domestic defense contracts. Recall that this national emergency began because of the White House and Congress’s inability to agree on federal appropriations related to the wall and that Section 8005 restricted funding for projects “denied by Congress.”
The expediency of soliciting contracts and attempting to begin construction came with its own issues. The government awarded contracts before securing property rights to the areas the wall was intended to be built upon, contrary to its typical procedure of securing property rights first. This caused a delay, as the federal government had to litigate eminent domain cases while contractors waited to begin performance. As a result of the eminent domain litigation, “[e]ach additional day of delay . . . cost[] the government $15,000.” As of November 24, 2020, that delay cost the government “$1.6 million.”
This delay also caused landowners in border states like Texas to be cut off from a portion of their property, with one property owner losing access to “about 350 of his 525 acres.” One Texas landowner also lost their view of the Rio Grande, as well as access to vital parts of their property like “[a] levee, a lake, [and] an onion field.” He went as far as to say that “construction [of the wall] will ‘ruin’ his life,” but due to the government’s power of eminent domain, that family “just finally gave up” rather than facing eminent domain litigation. This is just a small picture of the larger systemic issues the government faced in the rushed construction of the fence.
The expediency of the wall’s construction also had grave social and environmental impacts. To avoid legal issues in constructing part of the wall through Native American reservations, the Trump Administration waived the Native American Graves Protection and Repatriation Act, which, among other things, serves to protect Native American burial sites. The Trump administration also authorized a construction project through the Organ Pipe Cactus National Monument, a United Nations Educational, Scientific, and Cultural Organization ecological preserve near the Tohono O’odham Nation’s reservation. Photographs of “ancient saguaro cacti, many hundreds of years old, either sawed in half or flattened” have emerged, as has evidence that contractors “bulldoz[ed] . . . [an area] near where artifacts and human bone fragments have been found.” In part, this destruction can be blamed on the speed that the administration pushed to begin construction. As a result, currently, there are insufficient protections against a rogue President declaring a national emergency that this Note seeks to resolve.
On January 20, 2021, President Biden issued a proclamation ending President Trump’s national emergency. In part, that proclamation halted construction of the fence, ordered DoD and DHS to reallocate funds not originally appropriated for the wall’s construction, and either T4C or altered contracts related to the wall, but continued contracts that Congress explicitly appropriated the funds for. As of October 2021, the Biden administration began canceling two contracts in Texas that had not begun construction and was “in the process of canceling 20 other contracts.” However, the government is seemingly dragging this process out, as at least one of these negotiation settlements was still ongoing as of April 9, 2024.
The funds reallocated for the wall but not expended were likely reallocated for their previous purpose, including “66 previously deferred projects . . . for on-base schools, hangars, housing, and facilities.” Specific projects that were slated to regain funding included “$10 million for the Missile Field Expansion at Fort Greely in Alaska . . . [and] $79 million for Spangdahlem Elementary School for U.S. Military Children in Germany.” Recall that Section 8005 disallows the transfer of funds that have “been denied by the Congress.” While those protections should have prevented the award of such contracts, they were ineffective, so this Note seeks to employ further restrictions on the national emergency power to prevent Presidents from using this power to support their political agenda in the future.
In the aftermath of construction, President Trump’s prediction about the border wall was wrong. The President once claimed that the wall was “going to be impenetrable” and “not going to cost nearly as much as what they are saying . . . .” Instead, it was not the “powerful wall,” he claimed. In an article from March 2022, the Washington Post reported that “Mexican smuggling gangs have sawed through new segments of border wall 3,272 times over the past three years,” leading Customs and Border Protection (CBP) to spend “$2.6 million to repair the breaches during the 2019 to 2021 fiscal years.”
The construction project has also left lasting scars on the landscape throughout much of the Southwest. This included “carv[ing] steep roads at dizzying angles and gouged a wide path through the ridgeline where the border wall would go. The clock ran out before they built it, leaving behind a mutilated landscape and a boneyard of steel fence panels stacked by the hundreds.” Perpetuating the cost of the wall, the Biden administration announced that they are working to remedy those scars by addressing “life, safety, [and] environmental” concerns for the project. These scars have also proved treacherous for a number of endangered species, as migration patterns are being disrupted because of the wall. To prevent an administration from entering into similar contracts in the future, this Note seeks to impose limitations on executive power in a national emergency.
Justice Jackson’s concurrence in the Steel Seizure Case is vital to the practice of national security law, as the now-infamous concurrence set a framework still used by the Supreme Court today. In that concurrence, Justice Jackson outlined three categories of presidential power: (1) the President and Congress are acting in unison and are only constrained by constitutional limitations; (2) the President is acting in “a zone of twilight,” where Congress had not addressed the present issue, where it is uncertain if the President has the authority to take action; and (3) Congress prohibited presidential action, where the President’s “power is at its lowest ebb,” and he must rely on his powers vested by the Constitution. Applying Jackson’s concurrence to the border wall situation, Congress denied appropriating the $5 billion that Trump requested to fund construction contracts to erect the wall, placing President Trump’s actions near Justice Jackson’s third category. Seemingly, the President acted against the explicit will of Congress without having clear constitutional powers to perform such actions.
While the legality of President Trump’s construction project was questionable, especially considering that the Ninth Circuit held that “the transfer of funds [under Section 8005] was unlawful,” courts refused to step in. Therefore, to protect the interests of government contractors concerned about being T4C on a contract related to a national emergency, Congress should clarify the President’s role during a national emergency and clarify the scope of permissible contracts. To that end, Congress should amend the NEA and Title 10 of the United States Code, and the FAR Council should amend the FAR to outline permissible emergency expenditures within FAR Part 18.
This section serves to insulate government contractors from risks associated with T4C in a national emergency. It will begin by proposing Congress amend the NEA to restrict the executive’s power in such an instance. Next, this Note focuses on the statutory authority under Title 10 and proposes that Congress amend Title 10 to institute congressional safeguards prohibiting the reallocation of funds in certain circumstances. Last, this Note proposes that the FAR Council amend the FAR to guide COs and cabinet-level officials when entering into contracts during a national emergency to decrease the likelihood of a President diverting the will of contracts and entering into impermissible contracts.
To protect contractors from the declaration of arbitrary national emergencies, leading to one administration awarding contracts and the next T4C, the NEA should be amended to (1) define the scope of a national emergency; (2) create a sunset provision on all executive actions related to national security, excluding sanctions; and (3) provide that, if Congress implicitly or explicitly prohibited presidential action, the President could not declare an arbitrary national emergency.
As it stands, the NEA lacks a specific definition of national emergency, simply placing discretion within the executive branch. Instead, courts have had to use tools of statutory interpretation, including plain meaning and prior legislative history, to define the scope of a national emergency. To remedy this concern, and to protect contractors from arbitrary solicitations, and later T4Cs, Congress should amend the NEA to define the term that allows the President to take extraordinary measures that the act was centered around—“national emergency.”
According to its dictionary definition, “national emergency” can be defined as “a state of emergency resulting from a danger or threat of danger to a nation from foreign or domestic sources.” Following guidance from the Congressional Research Service, it is also important to understand the dictionary definition of “emergency”—“an unforeseen combination of circumstances or the resulting state that calls for immediate action.” Looking next to legislative history, Congress enacted the NEA to combat the “enormous—seemingly expanding and never-ending—range of emergency powers.” Using the dictionary definition of these terms and legislative history, the wall was not constructed during a national emergency; therefore, Congress should end any ambiguity and define the term “national emergency.”
That definition should, to the best extent possible, outline what constitutes a national emergency, including natural disasters and attacks on American soil. Drawing from both plain meaning and legislative history, that definition should be the following:
an unforeseen combination of circumstances related to weather, foreign or domestic attacks on the United States or its allies, a global pandemic, or another imminent threat to the United States, that creates a danger or threat of danger to the United States or its citizens and calls for immediate action by the President.
While still being broad enough to ensure the President can act swiftly during a true national emergency, this definition constrains the President from declaring a national emergency when Congress refuses to appropriate funds for the President’s policy objectives and implies a time constraint on presidential action. That time constraint seeks to allow the President to act for a short period until Congress can act and appropriate funds for a proper response.
Concerns may arise that defining “national emergency” would either expand or contract already existing emergency powers already granted by Congress in other statutes. It is also possible that defining the term “national emergency” could tie the President’s hands if a true national emergency were to occur that Congress had not considered when drafting the various statutes granting such power. While these are valid concerns, this definition seeks to find a middle ground to simultaneously prevent executive overstep when the President and Congress fail to agree on a given policy while allowing swift executive action in a true emergency. Congress should not continue to provide the executive with a blank check to declare a seemingly endless array of events as national emergencies on a whim, thus permitting the President to arbitrarily declare a national emergency to ignore the will of Congress. To that end, Congress should define a term vital to preserving the separation of powers, ensuring that a national emergency will be declared only when it is truly required and lasts for an appropriate time. While an appropriate time is ambiguous, creating a sunset provision would serve to resolve that ambiguity.
While the NEA contains a quasi-sunset provision, where the President must simply republish a declaration annually to perpetuate an emergency, it does not prevent the President from creating an endless emergency state. To remedy this issue, Congress should implement a sunset provision within the NEA that cancels a national emergency after 180 days unless Congress votes to extend that national emergency, similar to the War Powers Resolution. This action would work to ensure that Congress has the power to authorize long-term executive foreign and domestic action and inhibit the executive from entering long-term government contracts that pull from existing federal appropriations earmarked for other contracts. This action would also supplement this Note’s proposed definition of “national emergency,” as that definition left the length of a national emergency ambiguous. Considering the NEA was originally enacted with the dual purpose of constraining the executive’s national emergency powers, while also ensuring swift action on emergencies where Congress does not have time to act, this solution aims to create the best compromise. Congress could still exempt sanctions and other types of national emergencies from the sunset provision to ensure that foreign actors could still be held accountable for their actions.
It would seem helpful to avoid this issue altogether by granting Congress the unilateral ability to end a national emergency without requiring presidential approval through a concurrent resolution, thus allowing Congress to halt emergency acquisitions because they do not feel a declaration is warranted. This solution, however, violates the separation of powers principle outlined in INS v. Chadha. Under Chadha, the Supreme Court held that a legislative veto was unconstitutional because it went against the very principles that the founders sought to protect: “The bicameral requirement, the Presentment Clauses, the President’s veto, and Congress’ power to override a veto were intended to erect enduring checks on each Branch and to protect the people from the improvident exercise of power by mandating certain prescribed steps.” Creating a system where Congress could unilaterally reject the President’s declaration of a national emergency would violate that precedent.
Defining the term “national emergency” and creating a sunset provision would limit the executive’s power in a national emergency, yet allow the President to have a robust response to a true national emergency. To further demarcate these grants and limitations of executive power, Congress should also consider drawing a strict distinction between congressional and executive power by codifying a spectrum of presidential power.
Congress should codify Justice Jackson’s concurrence in the Steel Seizure Case to ensure that the President may only act within the constraints of his constitutional powers and the powers granted to him by Congress through amending the NEA. That amendment should be placed in section 1631 of Title 50 of the United States Code, which currently states, “When the President declares a national emergency, no powers or authorities made available by statute for use in the event of an emergency shall be exercised unless and until the President specifies the provisions of law under which he proposes that he or other officers will act.” This Note proposes an amendment be inserted after that sentence, which states, “the President may not act if Congress has—either implicitly or explicitly—prohibited the action the President is contemplating when declaring a national emergency.” This amendment would have the broad purpose of constraining executive authority, while also indirectly affecting government contracts, by preventing one executive from declaring a national emergency and awarding government contracts based on a partisan policy stance, just for the next to terminate the national emergency and T4C the awarded contracts.
These solutions provide a framework that protects contractors from arbitrary solicitations and T4C when a President declares a false and arbitrary national emergency. By defining the term “national emergency,” Congress would effectively draw a line in the sand, outlining strict criteria for emergency powers. By creating a sunset provision, Congress would reconcile the need for swift executive action and Congress’s powers under the Constitution, preserving the separation of powers. By incorporating the Steel Seizure Case into the NEA, Congress would explicitly define the separation of power principles already ingrained in the Constitution. This would ultimately serve to protect the contractor from arbitrary T4Cs when their contracts were created under false emergencies.
As discussed supra Part III.B, the NEA requires that the President cite the authority that he intends to use when declaring a national emergency. In the case of the wall, President Trump partially cited 10 U.S.C. § 2808to supplement his declaration, allowing him to pull funds allocated for other projects to his solicitations for the construction of the border wall. To further protect contractors from arbitrary solicitations, awards, and later T4Cs, Congress should amend Title 10 to implement further restrictions on the executive reallocating already appropriated funds during a national emergency through (1) expressly prohibiting the reallocation of funds to categories that Congress had previously prohibited funding for, either implicitly or explicitly; and (2) implementing a sunset provision to restrict contracts for 180 days.
Considering the separation of power concerns at issue in this case, Congress should amend 10 U.S.C. § 2808to ensure appropriated funds cannot be transferred to projects prohibited by Congress. Recalling Justice Jackson’s concurrence in the Steel Seizure Case, the President cannot act in areas where he does not have constitutional authority and Congress prohibited executive action. To clarify this limitation and further codify this principle of constitutional law, Congress should amend 10 U.S.C. § 2808(a). Subsection (a) currently states, “In the event of . . . [a] declaration by the President of a national emergency . . . the Secretary of Defense . . . may undertake military construction projects . . . not otherwise authorized by law.” This Note proposes that Congress amend that provision to include the following statement at the end of subsection (a): “the President is not authorized to use appropriated funds if the intended use for such funds was implicitly or explicitly prohibited by an act of Congress or by a failure of the President and Congress to reach an agreement on an appropriations bill within the same fiscal year.” This language will serve to prevent the President from circumventing Congress if they fail to agree on appropriations for a given fiscal year, thus preventing government contracts from being arbitrarily awarded and later canceled due to a change in administration and policy objectives.
Along with codifying the Steel Seizure Case, Congress should amend Title 10 to include a sunset provision that explicitly limits such contracts conducted during a national emergency to be no more than 180 days. The current termination clause of the statute states, “The authority described in subsection (a) shall terminate with respect to any . . . national emergency at the end of the . . . national emergency.” The current statute leaves three options for the termination of this authority—the President ends a national emergency, Congress is unified enough to create a supermajority able to override a presidential veto, or the President fails to renew the emergency.
This Note proposes Congress amend § 2808(c) to state that “the authority in subsection (a) shall terminate with respect to any national emergency within 180 days of declaring such national emergency unless otherwise authorized by Congress.” This clause would serve to restrict the President from entering long-term contracts that could ultimately be terminated by a changing administration and protect Congress’s power of the purse by ensuring only Congress can approve appropriations for such endeavors. Setting a limit on the executive’s national emergency powers would provide flexibility for the President to respond to a given national or international crisis while ensuring it is not used for an endless political circumventing of congressional power.
These solutions would clarify where the President may pull funds from, serve as a deterrent for future presidential abuse of the powers granted to them by the NEA, and protect contractors from being exposed to solicitations for contracts that could be terminated quickly due to a change in political landscape and administration. By explicitly preventing the President from pulling funds for construction projects that Congress had explicitly prohibited, Congress would safeguard their constitutionally enumerated power of the purse, and, by enacting a sunset provision, Congress would ensure that these construction projects would be short-term projects that would not waste billions of tax-payer dollars and set contractors up to be T4C.
As it stands, the FAR only briefly touches on national emergency powers. The only section that addresses this issue is FAR Part 18, the purpose of which is constrained to “acquisition flexibilities that are available for emergency acquisitions . . . [related to] specific techniques or procedures that may be used to streamline the standard acquisition process.” While the FAR does address sources of funding in FAR Part 32.7, it does not address the issue of funding in a national emergency. To promulgate the amendments discussed supra Part VI into specific guidance for COs, the FAR Council should amend FAR Part 18 to outline sources of funding during national emergencies, while also promulgating restrictions on the length of contracts awarded during a national emergency.
In light of the proposed amendments to the NEA and Title 10, the FAR council should amend FAR Part 32.7 to impose restrictions on solicitations, promulgating how an agency can divert federal funds for contracts related to a national emergency. That provision should outline the intricacies of Title 10, explicitly create a funding framework that explains available funding sources for such contracts, and provide for agency oversight in using those funds. The newly amended FAR provision should state:
After the President declares a national emergency and a need arises to source funding from other appropriations for emergency contracts, the issuing agency may only source that funding from contracts that have previously been canceled or contracts that reduced its price within the issuing agency. Such funding may total no more than $500 million for military construction contracts outside of the United States or $100 million for domestic military construction contracts.
This language should guide COs to issue contracts that are expressly authorized, while also providing clarification as to what is authorized under federal law. This language would also protect contractors by prohibiting a given agency from issuing high-value contracts that may be terminated in the future by a change in executive policy from a new administration.
The FAR Council should also amend FAR 32.7 to promulgate the maximum length that a contract may be awarded after the declaration of a national emergency without congressional authorization. That clause should state:
When awarding a contract under authorization from the National Emergencies Act and under 10 U.S.C. § 2808, a Contracting Officer may only award a contract for up to 180 days without express congressional consent. After the 180-day period, the contract shall be terminated, unless Congress appropriates the funds necessary to continue the contract under normal appropriations procedures.
This would encourage COs to only issue short-term contracts until Congress has time to react to the national emergency, while ensuring the executive branch does not overstep its constitutional limitations when declaring a national emergency by using the executive’s emergency power to create a long-term contract without the consent of Congress. This provision would work to insulate contractors who were awarded long-term contracts during a national emergency by ensuring that agencies cannot solicit bids for contracts that lack proper funding.
While it is important to include provisions limiting the extent of government contracts that the executive branch may award during a national emergency, excusable delays are always possible. To that end, this Note’s proposed addition to the FAR includes a delay exception that outlines what would happen if a valid contract experiences an excusable delay. That provision should state: “In the event a contract formed during a national emergency experiences an excusable delay, as outlined in FAR 52.249-14, it shall be exempt from [the new FAR provision], so long as, absent the excusable delay, the contract would have been completed within the 180-day deadline.” This provision would serve to protect contractors from termination under the proposed FAR amendment if something outside of the contractor’s control prevented the completion of the contract by the specified date.
If these short-term contracts were to be implemented, the bureaucratic process could take time to award short-term contracts, leading to those contracts being terminated as soon as they are awarded. To combat this possibility, FAR Part 18 contains provisions to ensure emergency contracts are solicited and awarded quickly. For example, under FAR 18.104, “[a]gencies may limit the number of sources and full and open competition need not be provided for contracting actions involving urgent requirements.” One of those urgency requirements is “[d]elay in award of a contract would result in serious injury, financial or other, to the Government,” which a true national emergency would likely fall within.
Some may be concerned that this solution would further increase instances of fraud during national emergencies, especially since fraud is already more prevalent when agencies act quickly to award contracts. This concern is valid and may be a limitation to the proposed solution; however, these issues tend to occur often in national emergencies as evidenced by the recent COVID-19 pandemic. The federal government has recovered over $1 billion from a single COVID-19 relief program alone. While this concern is unfortunate, short-term contracts in a national emergency may serve to protect the federal government from such instances of fraud, as the government already has an existing recovery framework. Instead of long-term government contracts providing an opportunity for large-scale fraud consisting of large amounts of funds, short-term contracts could restrict both the amount of funds vulnerable to fraud and the period that fraud could occur.
By amending the FAR to address how to reallocate federal funds and to impose a time limit on contracts issued during a national emergency, contractors would be insulated from changing administrations that could end a national emergency and, in turn, terminate their contracts. These amendments should also provide clarification for and restrictions on COs when soliciting bids for contracts that lack appropriations and pull funding from other sources during a national emergency.
The separation of power principles ingrained in the U.S. Constitution prohibits the executive from acting against the will of Congress unless the Constitution grants him that authority. In pulling already appropriated funds, President Trump violated those principles, while also exposing contractors to T4C once the Biden administration took control of the White House. Considering President Trump’s unilateral action went unchecked, a future administration may follow in the President’s footsteps and declare a national emergency to circumvent Congress and push through a partisan agenda that does not rise to the level of a true national emergency, even if such an administration claims that it does. To combat this concern, Congress should restrict the almost-unlimited power they granted to the executive branch to reign in federal emergency power, protecting contractors from being exposed to future T4C and preserving the separation of powers.
