The authority granted by Congress that lets agencies pay certain contractors even if they can’t work due to the pandemic is set to expire in just over a month. And while it’s unclear how much agencies are taking advantage of Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), federal acquisition experts believe the extension is critical.
“If companies are faced with the choice of keeping a person on payroll and not getting reimbursed or losing the person to another job, the company loses either way. Without 3610, companies face the threat of not being a viable business or losing the ability to perform on contract,” said David Berteau, the president and CEO of the Professional Services Council, an industry association. “Section 3610 is by far the best solution to address these challenges. It’s flexible and doesn’t require additional funding. It can be scaled up or down as needed as long as the statutory authority is there.”
This is why Sens. Mark Warner (D-Va.) and Marco Rubio (R-Fla.) are pressing Senate leadership to extend 3610 authorities through Sept. 30.
“We believe extending this authority given the prolongation of the global pandemic is critically important to the resilience of our national security industrial base,” the lawmakers wrote in a letter, which Federal News Network obtained, to Majority Leader Chuck Schumer and Minority Leader Mitch McConnell on Feb. 25. “Section 3610 has proven to be an important means of providing necessary relief during the pandemic to critical intelligence community partners — particularly to small businesses that provide highly specialized capabilities — to retain key national security capabilities.”
PSC wrote a letter to House and Senate lawmakers on Feb. 16 asking for an extension.
“Time is of the essence,” Berteau said. “If it goes away, jobs are at risk.”
PSC also joined nine other industry associations on Feb. 25 sending a letter to House and Senate leadership asking them to extend the 3610 authority.
“Despite increasing vaccination rates, COVID-19 is still with us and the United States remains in a declared national emergency. Access to government facilities and remote work options continue to face uncertainties and frequent changes. Until agencies allow all contractors back to their worksites and we are past the need for quarantines shutting down workspaces, Section 3610 continues to be a critical tool for retaining highly skilled workers supporting operations across the government,” the associations wrote. “Agencies are not mandated to utilize Section 3610, and the authority’s extension does not require additional appropriations. Instead, it is a tool the government can employ when needed to maintain their contractor workforce when COVID-19 forces facility closures, the implementation of social distancing measures, and staggered shift work for those who are physically in the workplace.”
By and far, the Defense Department has taken the most advantage of the authorities to ensure the national security industrial base remains in a ready state. The DoD inspector general found in December that the Pentagon’s use of section 3610 authority was limited. As of Sept. 30, the IG said only 96 of the 781 DoD affected contractors received assistance.
But the IG also says “Tracking and identifying DoD contracts using section 3610 was not easy. Not all contracts using section 3610 authority were clearly identified in DoD information systems and some contracts were mislabeled as using section 3610 authority when they did not use it.”
The Government Accountability Office also reported in early September that DoD spent about $18.3 million to reimburse contractors, by far the most out of the seven agencies who received the authorization from Congress.
Berteau said that more agencies than just DoD are using the powers to reimburse contractors. He said agencies and contractors at the program level are ensuring they can keep key personnel on the contract to stop companies from moving them to another job or losing them.
“You will not get these folks back because they have in-demands skills whether it’s high tech lab work or skill touch labor like nuclear welding,” he said. “It’s not being picked up by the systems that capture large expenditures. We’ve talked to GAO and we believe they understand that the big systems will not capture all the ways 3610 is being applied.”
In June, DoD officials told Congress it expected to pay out billions under 3610.
In testimony before the House Armed Services Committee, Ellen Lord, the former undersecretary of Defense for acquisition and sustainment, declined to provide an exact figure, saying only that it’s likely to be in the double-digit billion dollar range. In any event, the bill is expected to be so large that DoD can’t pay it out of its existing budget without affecting other programs, she said.