Alert
Alert
10.05.20
Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act authorized agencies, at their discretion, to reimburse contractors for the cost of paid leave incurred during the COVID-19 pandemic in order to maintain their workforces in a ready state. Contractors may be reimbursed for any paid leave, including sick leave, for up to an average of 40 hours per week, that was caused by COVID-19. Section 3610 applies only to costs incurred for employee “leave.” Further, a contractor may only receive reimbursement if: (1) its employees or subcontractors cannot perform work on government-owned, government-leased, contractor-owned, contractor-leased facility, or sites approved by the government due to closures or other restrictions; and, (2) the employee’s duties are such that they are unable to telework. For cost-reimbursement and incentive contracts, where allowable and allocable, costs may be recovered on unplanned costs due to COVID-19, such as those related to providing PPE to employees, additional cleaning of work areas, changes to workspaces to accommodate social distancing, and delays in delivering and/or receiving purchased materials.
The reimbursement period began on March 27, 2020—the date the CARES Act became law—and was scheduled to end on September 30, 2020. We’ve previously discussed agency guidance on Section 3610 and a recent GAO report on the federal government’s implementation of the provision.
On September 30, 2020, in order to avoid a government shutdown, Congress passed a continuing resolution that provides roughly $1.4 trillion in government funding until December 11, 2020. President Trump signed the resolution shortly after midnight on October 1st, just after the 2020 fiscal year ended. The resolution includes a provision (Section 140) that extends the reimbursement period under Section 3610 of the CARES Act to December 11, 2020. Without specifically referencing section 3610, the resolution states:
(Sec. 140) This section extends the authority of federal agencies to reimburse contractors for certain leave paid to employees or subcontractors due to facility closures or other restrictions as a result of the COVID-19 (i.e., coronavirus disease 2019) public health emergency.
The resolution, however, did not appropriate any funds to agencies for Section 3610 reimbursements. Accordingly, federal contractors should submit their reimbursement requests without delay, as agency funding may be limited.