Redstone Government Consulting Blog | COVID-19 (2)

We Lifted the Vail

A few months back we submitted a request to DCAA under Freedom of Information Act. Based on the DPC guidance referencing both DCAA and DCMA as playing a key role in support of the rest of the DoD Acquisition Community, we expected DCAA would have a significant number of documents disclosing this key role. Turns out, not so much. All we got was a single document listing 13 frequently asked questions (FAQs) DCAA has been fielding from their auditors, dated July 31, 2020.

For the past 10+ weeks, we have focused on how to work remotely, compensate employees who are unable to work due to COVID-19 related reasons, and how to interpret and implement the new laws applicable to the pandemic, such as the Families First Coronavirus Response Act, the Paycheck Protection Program, and CARES. As many states begin to loosen the “shelter at home/social distancing” guidelines, it is time to consider – how do we return to work safely?

SBA Extends the Repayment Date Again – May 18, 2020

On May 13^th the Small Business Administration (SBA) updated its Frequently Asked Questioned (FAQs) – adding Questions 46 and 47.  Question 47 extends the safe harbor (repayment) date to May 18th.  Question 46 is very interesting; it lays out the SBA and Department of Treasury plan to review certifications of the necessity of the loans. 

For those of you who may have thought there could be a silver lining to coronavirus restrictions from reduced audit effort, think again! Actual postponement of audits will be rare.

UPDATE:  On May 5th, SBA added FAQ #43 extending the safe harbor to May 14, 2020 and stating “SBA intends to provide additional guidance on how it will review the certification prior to May 14, 2020.”

On April 8, 2020, Acting Principal Director for Defense Pricing and Contracting issued a memo providing guidance in support of DFARS Class Deviation 2020-O0013 – CARES Act Section 3610 Implementation.  The Class Deviation provides language for DFARS 231.205-79, CARES Act Section 3610 – Implementation.  The cost principle language makes costs of paid leave (including sick leave) allowable at the appropriate rates under the contract for up to an average of 40 hours per week and may be charged as direct to a contract.

Although the COVID-19 Pandemic and its impact on everyone is absolutely serious business, the nature of this “special day” blog is not necessarily serious business.   At times like these we hope that an element of levity will be accepted for what it is and not be misinterpreted as diminishing the serious nature of the pandemic. We also hope that everyone reading this is safe, healthy and adhering to the federal guidelines to limit the spread of COVID-19.

On March 20, 2020, Acting Principal Director for Defense Pricing and Contracting issued a memo increasing the progress payment rate from 80% to 90% for large businesses and 90% to 95% for small businesses.  The intent to increase cash flow to contractors running low on cash due to the impact of COVID-19.  See DoD Class Deviation 2020-O0010 for details.  The Defense Contract Management Agency is working to modify contracts as efficiently as possible.  Clients may want to contact their respective ACO to assist by providing a complete listing of all impacted contracts.

The President has announced he has invoked the 1950 Defense Production Act (DPA).  This act provides the Government with the ability to direct businesses to accept contracts and increase the production of necessary goods and services.  The act has been used numerous times since 1950 to support emergencies, including natural disasters and the war on terrorism.  The current fight with COVID-19 has necessitated it once again.  A July 28, 2014, Congressional Research Service paper titled “The Defense Production Act of 1950: History, Authorities, and Reauthorization” summarized the current act to include:

As every government contractor is no doubt aware, no business is immune (no pun intended) from the potentially devastating economic impact of the global coronavirus outbreak. As we confront new restrictions, with the possibility of more to come, on both businesses and employees that could last for months, the costs continue to mount.