Federal Contractor Relief Under the CARES Act

In late March, the Coronavirus Aid, Relief, and Economic Security Act (CARES) was signed into law, becoming the largest economic stimulus package in American history. Under certain provisions of the CARES act, qualifying federal contractors may be eligible for financial relief to keep employees and subcontractors “in a ready state”, ensuring contractors are available to support the federal government going forward.

Section 3610 of CARES allows federal agencies, at their discretion, to use available funds to modify existing contracts and authorize reimbursement to contractors for paid leave of employees unable to perform job duties due to the health emergency. To qualify for reimbursement, the contractor’s employees or subcontractors must be unable to work due to “facility closures or other restrictions” or because employees “cannot telework because their job duties cannot be performed remotely” during the public health emergency. Reimbursements are “at the minimum applicable contract billing rates” for up to an average of 40 hours per week for paid leave, including sick leave.

These relief funds are available only until September 30, 2020. Until further guidance is available, legal experts advise qualifying contractors to act swiftly. Reach out to your legal counsel and notify the contracting officer of changes in operations and understand what documentation to begin preparing in order to apply for relief under the CARES act.