President Trump and Vice President Pence meet with supply chain distributers in response to the coronavirus pandemic on March 29 in the Cabinet Room of the White House.

President Trump and Vice President Pence meet with supply chain distributers in response to the coronavirus pandemic on March 29 in the Cabinet Room of the White House. Official White House Photo by Andrea Hanks

Industry Groups Welcome Stimulus Provisions for Federal Contractors

Agencies may reimburse contractors for paid or sick leave if they can’t telework.

Industry groups welcomed provisions in the $2.2 trillion CARES Act that allow agencies flexibility in how they administer federal contracts when workers are affected by COVID-19.

On March 27, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act, which is aimed at supporting individuals and businesses struggling with the economic fallout from the spread of the novel coronavirus. Under the law, federal agencies can use their funds to give contractors sick or paid leave during the pandemic if they are not able to access their worksites or telework. Although the administration advised agencies to “maximize telework” for contractors in guidance issued on March 20, that is not possible for many contractor jobs, including some involving sensitive or classified work. 

For applicable contractors, agencies can “modify the terms and conditions of a contract, or other agreement” to “reimburse at the minimum applicable contract billing rates” up to an “average of 40 hours per week [for] any paid leave (including sick leave) a contractor provides to keep its employees or subcontractors in a ready state,” according to the legislation. This flexibility runs until September 30, 2020, which is the end of the fiscal year. 

The Professional Services Council, a trade association that represents 400 companies that contract with the federal government, applauded the act. “We believe this act makes a good start in addressing PSC’s priorities,” which include: keeping the government and contractors working and ensuring that contractors get paid. The group called for “swift implementation” of the law in a press release

“This legislation is a positive step in the process of ensuring the defense industrial base can weather the pandemic’s disruptions,” said the National Defense Industrial Association, which represents about 1,700 defense companies. “We recognize there are limitations to the depth of support included in the legislation and encourage the Department of Defense and other agencies to provide consistent equitable relief and adjustments to all contractors whose ability to perform their functions is impacted.”

Frank Spampinato, who is a program manager for a General Services Administration contract and previously held top federal procurement positions, echoed these sentiments. While Spampianato was not authorized to speak on behalf of GSA, the legislation “is a great start,” in protecting and advocating for contractors during this disruptive time, he told Government Executive. As “a government person for almost 30 years,” he said he knows “contractors are in a tough position because if you don't work, you don't get paid. It's as simple as that.” 

Similar to government shutdowns, obtaining clarity from the government about work and payment recently has been a struggle for contractors who don’t always get the same attention as federal employees. Earlier in March, the trade groups, along with lawmakers, made repeated requests for more guidance from the government. They were pleased when the Trump administration finally did so on March 20. 

“Federal contractors play a vital role in helping agencies meet the needs of our citizens, including the critical response efforts to COVID-19,” wrote Office of Management and Budget Deputy Director for Management Margaret Weichert in the guidance memo. “The health and safety of all Americans, including our federal contractors, remains a top priority. 

After being contacted by GSA, this story was updated to note that Frank Spampinato was not authorized to speak on behalf of GSA.