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COVID-19 Contracting: Observations on Contractor Paid Leave Reimbursement Guidance and Use

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[Technical Report, Congressional Report]

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Section 3610 of the Coronavirus Aid, Relief, and Economic Security CARESAct generally authorizes agencies at their discretion to reimburse a contractor for the cost of paid leave incurred during the pandemic so that it can maintain its workforce in a ready state. Between March 2020when the CARES Act was enactedand early July 2020, the Office of Management and Budget OMB and each of the seven other agencies in GAOs review issued guidance to implement section 3610. While largely similar, GAOs work identified some differences across these guidance documents, including the extent to which the rates used to calculate these reimbursements could include profit or fees. OMB issued additional guidance on July 14, 2020, that addressed these differences and clarified how agencies should handle each situation. For example, OMB noted that profit or fees should generally not be reimbursed but provided options for addressing situations in which removing profit or fees would be burdensome. OMB advised agencies to report the amount reimbursed using section 3610authority via contract modifications to the Federal Procurement Data System Next Generation FPDS-NG. After excluding reported obligations identified by agency officials as not associated with section 3610 authority, the reported data indicated that agencies made relatively little use of the authority through July2020 see figure. However, the Department of Energy DOE reimbursed contractors for almost 550 million in paid leave costs, stating it used existing obligations rather than adding funding via a contract modification. As a result, these amounts were not reported to FPDS-NG as section 3610 reimbursements.

Subject Categories:

  • Administration and Management
  • Economics and Cost Analysis

Distribution Statement:

[A, Approved For Public Release]