The Coronavirus Aid, Relief, and Economic Security (CARES) Act gave the Defense Department the authority to reimburse federal contractors who faced sudden expenses because of COVID-19.
But the bill didn’t include any new funding to make those payments, and DoD officials are telling Congress they need billions of additional dollars to make contractors whole.
One section of the law — Section 3610 — lets agencies repay contractors who put their employees on paid leave rather than furloughing or laying them off. The idea was to keep as much of the industrial base workforce as possible in a ready state.
But those reimbursements are “subject to the availability of appropriations,” which aren’t expected to come through until Congress passes the next round of coronavirus relief. DoD officials have submitted a rough cost estimate to the Office of Management and Budget (OMB).
But in testimony before the House Armed Services Committee (HASC), Ellen Lord, the undersecretary of Defense for acquisition and sustainment, declined to provide an exact figure, saying only that it’s likely to be in the double-digit billion dollar range. In any event, the bill is expected to be so large that DoD can’t pay it out of its existing budget without affecting other programs, she said.
The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized. Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/