Coley has received several inquiries from our Federal contracting community as to how to recoup revenue lost as a result of being unable to fulfil contractual obligations due to the work interruption caused by the COVID-19 national emergency. Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act CARES Act, signed on March 27, contains provisions that apply to contractors unable to complete their contractual obligation due to work stoppage. If a Federal contractor’s employees cannot work on a Federal Contract due to the COVID-19 pandemic, the contractor may be entitled to relief from contractual obligations and continue to receive payment.
The Office of Management and Budget (OMB) Memorandum M-20-19, issued on March 20, 2020 recognized the disruption that could be caused by work stoppages and suspended payments to Federal contractors in response to the COVID-19 national emergency. The memorandum instructed Federal contracting personnel to “feel fully empowered to use acquisition flexibilities” during the national emergency. https://www.whitehouse.gov/wp-content/uploads/2020/03/M-20-18.pdf
Building on this need for flexiblity, Section 3610 if the CARES Act provides funds that allow contracting officers to reimburse contractors at the minimum applicable contract billing rates not to exceed an average of 40 hours per week in order to help contractors keep its employees or subcontractors in a ready state to resume work. https://www.congress.gov/116/bills/hr748/BILLS-116hr748eas.pdf
The limitations on the funds and contractual relief are that employees (or subcontractors) working on a Federal site that has been ordered not to work onsite, but their work cannot be performed remotely during the national emergency. The other limitation is that the funds and contractual relief expire on September 30, 2020.
We all know how important it is to be informed in these times and of the many challenges that Federal contractors face, professionally and personally, during this national emergency. Coley has continued to work without interruption to support its clients and will continue to share developments that affect our clients and the Federal contracting community.
Published author with 30 years’ experience working with Federal agencies and contractors, including proposal development and project delivery.