What DOD & ODNI are now telling contractors on COVID-19 costs

With the coronavirus economic stimulus now law, the Defense Department and central office in charge of the intelligence community are leaning on that to help contractors keep their workforces in a "ready state" and remain financially stable.

Both the Defense Department and central office overseeing the intelligence community rolled out guidelines this week intended to help government contractor workforces intact in a “ready state” and give companies financial stability amid the coronavirus pandemic.

The guidelines are being implemented under a section of the almost $2 trillion economic stimulus legislation called the CARES Act that was signed into law in late March.

DOD’s acquisition office said a memo signed Wednesday that the department will reimburse contractors for paid leave that includes sick time if workers fall ill or cannot get to facilities that “have been closed or made practically inaccessible or inoperable.”

One section of the memo says contracting officers can modify contracts to provide for that reimbursement of allowable paid leave costs that are not otherwise reimbursable without securing additional consideration, all of which is applicable to any contract type.

But contractors can only get reimbursement if employees or subcontractor staffers cannot perform their jobs because of closures or other restrictions and if remote work is not an option.

Contracting officers must also avoid duplication of payments for those companies who get compensation from other parts of the CARES Act or similar COVID-19 relief scenarios such as tax credits.

In a similar vein, the Office of the Director of National Intelligence told industry in a memo signed Friday that their agencies can also modify contracts if contractor employees cannot get to their job sites due to health and safety restrictions or work remotely due to the often-classified nature of the work.

That memo is intended to help IC agencies give clear and consistent direction to companies until formal guidance from the Office of Management and Budget comes out. But like with DOD, ODNI said contracting officers “should consider reimbursement for costs associated with the COVID-19 (pandemic) without requesting consideration.”

ODNI’s memo has directions for contractors regarding invoices: segregate and specifically identify time and expenditures billed to allow for future review and analysis of expenses related to COVID-19, and identify whether or not they are receiving any other benefits or credits under the CARES Act.

ODNI also encouraged intelligence agencies to maximize the CARES Act’s flexibility and existing contractor tools to help companies convert as many employees as possible to stay home in a ready state.

For their part, ODNI has reduced its acquisition and procurement staff and is encouraging other IC agencies to do the same. ODNI is also not requesting normal acquisition and procurement activities during the crisis and will support agencies if they push back certain acquisition and development milestones given limitations of staffing on-site amid the pandemic.

Both DOD and ODNI guidelines are in authority until Sept. 30, the last day of the government’s current fiscal year.

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