How GAO's COVID audits could impact contractors

The Government Accountability Office is gearing up its audit engine to track how agencies implement the CARES Act and other coronavirus-related legislation.

A bulk of the attention will be how agencies manage the mandates in these laws and the massive increases in spending. But contractors are sure to be in the mix as well.

It’s early, but a GAO spokesman said the oversight agency will look at the following areas of impact for contractors:

• Contract spending
• Use of the Defense Production Act
• Impact on the defense industrial base
• Guidance and implementation of Section 3610 of the CARES Act
• Use of contract-related flexibilities in the CARES Act and the Stafford Act.

Section 3610 of the CARES Act deals with recovering labor costs and other contract modifications to reimburse contractors for costs from actions such as paid leave, remote work and others. That section is part of the CARES Act's requirements for a contractor workforce that remains in a steady state.

The Stafford Act is much older as it was passed 1988 and carries the formal title of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. The Stafford Act kicks in when the president declares a state of emergency, which opens relief efforts, including financial, by FEMA and other agencies.

GAO has a pandemic page on its website that gives an outline of the breadth and depth of the areas that it plans to explore related to COVID-19 response. Initial reports to Congress will start 90 days after the CARES Act was signed. After that, GAO will report monthly to Congress and quarterly to the public.

The agency has already set up a fraud hotline through FraudNet, which collects allegations via the internet, email or phone calls about government programs.

GAO will broadly look at preparedness, response, and recovery.

In addition to GAO, other oversight mechanisms include the Congressional Oversight Commission to oversee the $500 billion loan fund administered by the Treasury Department and the Federal Reserve. There also is a new oversight committee of inspector generals.

As attorney James Fontana has written in several columns and said in a recent Project 38 podcast, being proactive might be your saving grace if auditors call. Document your costs and talk to your contracting officers.