AIA calls for COVID-19 reimbursement funding and a Section 3610 extension

By Marjorie Censer / July 15, 2020 at 12:47 PM

The Aerospace Industries Association has sent a letter, signed by dozens of defense executives, to Capitol Hill seeking reimbursement funding for defense contractors.

The letter, dated July 14, notes that the Coronavirus Aid, Relief, and Economic Security Act includes Section 3610, "which authorized the reimbursement of extraordinary and unanticipated costs arising from COVID-19."

"As you know, the bill did not appropriate funds for those reimbursements," the letter adds. "This situation creates a problematic burden on our defense industrial base and a difficult choice for the Department of Defense."

AIA and the other signers write that absorbing these costs would threaten readiness improvements, jeopardize jobs and erode the domestic supply base.

The letter contends that Section 3610 costs are just one category for which additional funds are needed.

"Other COVID-19 costs include travel restrictions, facility closures, social distancing within facilities, enhanced cleaning measures, the purchase of personal protective and sterilization equipment, and costs associated with supply chain disruption," the document states. "As these expenses and claims become clearer, we believe that supplemental emergency defense appropriations for COVID-19-related claims should be addressed."

AIA's letter urges congressional leaders to include in the next COVID-19 response legislation "an appropriate level of funding for these reimbursements" and to support DOD's request for emergency funding.

Additionally, AIA says Section 3610 authorities, which expire Sept. 30, should be extended to Dec. 31.

This letter follows one sent last week by the chief executives of eight of the largest defense contractors. They wrote that they were preparing their estimated costs related to COVID-19 relief legislation and warned the Pentagon will need additional funding to cover these expenses.