The Defense Department this week laid out the framework for implementing recent legislation meant to help pay contractors unable to work during the coronavirus outbreak.
A new memo signed Wednesday evening by the acting principal director for defense pricing and contracting issues a class deviation related to a portion of the Coronavirus Aid, Relief and Economic Security Act, enacted late last month.
"Section 3610 of the CARES Act allows agencies to reimburse, at the minimum applicable contract billing rates (not to exceed an average of 40 hours per week), any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contractor personnel, during the public health emergency declared for COVID-19," the memo, signed by Kim Herrington, reads. "Currently, many Department of Defense (DoD) contractors are struggling to maintain a mission-ready workforce due to work site closures, personnel quarantines, and state and local restrictions on movement . . . that cannot be resolved through remote work."
"It is imperative that we support affected contractors, using the acquisition tools available to us, to ensure that, together, we remain a healthy, resilient, and responsive total force," Herrington adds.
However, he notes that some companies "may receive compensation from other provisions of the CARES Act, or other COVID-19 relief scenarios, including tax credits, and contracting officers must avoid duplication of payments."
The memo instructs contracting officers implementing Section 3610 to "consider the immediacy of the specific circumstances of the contractor involved and respond accordingly."
"The survival of many of the businesses the CARES Act is designed to assist may depend on this efficiency," Herrington writes. "While impacts will certainly be experienced by many contractors, some will have a more immediate need for relief than others."
The memo notes that Section 3610 allows contracting officers to enable "the contractor to stay in a ready state (i.e., able to mobilize in a timely manner) by treating as allowable paid leave costs a contractor incurs to keep its employees and subcontractor employees in such a state."
Additionally, contracting officers can modify contracts "to provide for reimbursement of allowable paid leave costs, not otherwise reimbursable, without securing additional consideration" and provide "such reimbursement on any contract type."
However, under this provision, contractors can only receive reimbursement if its employees or subcontractor employees cannot perform work because of closures or other restrictions and cannot telework.
"We anticipate the need for additional guidance and will continue to provide answers to frequently asked questions and provide additional implementation information and guidance as appropriate," Herrington adds, noting the class deviation remains in effect until rescinded.