White House outlines how agencies can help contractors during pandemic

The White House budget office is advising federal agencies to consider reimbursing paid leave for government contractors so they can keep their workforce in a “ready state” amid the COVID-19 pandemic.

In a memo sent to agencies Friday, the Office of Management and Budget said they have “considerable discretion to treat paid leave as a reimbursable cost” under a section of the massive coronavirus economic relief legislation signed in March.

Such reimbursement could occur if telework is not suitable for a contract and that work has not been deemed essential and exempt from a stay-at-home or similar order handed down by a state or other jurisdiction. Telework is not an option for many contractor jobs and particularly those in sensitive or classified areas, even though OMB has advised agencies to maximize that option.

OMB Acting Deputy Director for Management Michael Rigas wrote the agencies can use any funds made available to the agency by contractors to reimburse for any lost time between March 27 and September 30, if that contractor gives leave to stay in a ready state for when employees are called back or can return to work.

Contracts can be modified to “reimburse at the minimum applicable contract billing rates” up to an average of 40 hours per week, according to the memo. Agencies were also reminded of the challenges small businesses particularly face, which has been highlighted by accelerated payment strategies from the Defense Department and General Services Administration announced within the past month.

Government contractors tout reliable and steady cash flow as core to their business and the move to accelerate payments is an effort to keep that going in the event invoice payments are disrupted.

Rigas’ memo comes nearly a day after nine trade associations including some that represent government contractors asked OMB to step in and make sure all agencies know what they can do regarding relief for contractors and apply it consistently.

In a letter sent Thursday to Acting Office of Management and Budget Director Russell Vought, the groups asked OMB issue implementation guidance of its own to resolve what they call the “unintentional result of creating the inconsistent or contradictory implementation” of Section 3610 of the Coronavirus Aid, Relief and Economic Security Act.

Some guidance out of the Defense Department and several intelligence agencies has related to implementing part of the coronavirus economic relief legislation that allows for reimbursing contractors whose employees cannot get to work because of the pandemic.

The groups refer to the guidance that DOD has issued to date as the most comprehensive and recommended OMB adopt a similar approach. Potential applications include when facilities are closed or other restrictions such as limiting the numbers of staff on-site to practice social distancing.

Groups that signed the letter were the American Council of Engineering Companies, AFCEA International, Associated General Contractors of America, CompTIA, Center for Procurement Advocacy, Information Technology Industry Council, Intelligence and National Security Alliance, National Defense Industrial Association and the Professional Services Council.