What Government Contractors Should Know About the CARES Act

On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES), a $2 trillion relief package that intends to prevent workers from losing their jobs and small businesses from going under due to economic loss. Attorneys from the FH+H Government Contracts practice group offer guidance on the Act as it relates to government contractors, subcontractors, and their employees.

 

PAYROLL RELIEF

Section 3610 of the Act provides payroll relief for government contractors, who may be reimbursed for expenses associated with providing paid leave to qualifying employees and subcontractors.

Employees and subcontractors qualify when:

  • They are unable to perform work on federal government facilities due to public health emergency restrictions; and
  • Their duties cannot be performed remotely by teleworking.

Reimbursement is limited to the minimum billing rates stated in the contract, not exceeding an average of 40 hours per week, including sick leave. Section 3610 of the Act sunsets on Sept. 20, 2020.

 

SPEEDY PROCUREMENTS

The Act also addresses an increased use of Other Transaction Authorities (OTAs), which can help contractors speedily secure procurements. OTAs traditionally give the Department of Defense the ability to move forward with certain prototype and research projects without going through the traditional acquisition process, which can take years to complete. 10 U.S.C. § 2371b.

The Act extends the Department of Health and Human Service’s ability to use OTAs, and it removes some spending caps on their use with other agencies.

“Agencies have also sped up the use of other contract vehicles, such as blanket purchase agreements, which allow agencies to purchase supplies or services through an established contractor for repetitive needs,” Jerry McGinn, executive director at George Mason University’ Center for Government Contracting, said in a Washington Business Journal article. “We’ve seen lots of quick churn, 24-hour responses on BPAs and other funding opportunities where the agencies are looking to get things immediately on contract.”

 

QUESTIONS?

We encourage contractors, subcontractors, and GovCon employees to read the CARES Act, paying special attention to Section 3610, and to reach out to your attorney with any questions or concerns.

FH+H’s Government Contracts practice, led by Partner Tom Craig, offers guidance during this uncertain period and is experienced with the applicable rules and regulations related to OTAs and other contracts. Follow our blog for updates as our team continues to analyze new legislation and monitor developments.

 

Note: The information contained on this page does not constitute legal advice, and reading the information does not automatically start an attorney-client relationship. The details are meant to serve as guidance on the new law, but it is not comprehensive of all situations.

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