Government contractors have the opportunity to secure relief under the Coronavirus Aid, Relief, and Economic Security (CARES) Act or Paycheck Protection Program (PPP) and they should prepare for emerging rules and regulations around compliance, reporting, auditing, and accounting. In order to provide financial assistance as quickly as possible during this crisis, not all of the details were fleshed out in advanceSo, the Department of Defense (DoD) recently provided guidance for contracting officers (COs) to help bring clarity by issuing a Class Deviation – CARES Act Section 3610 Implementation document.
These guidelines emphasize the critical need for GovCons to prioritize their relationship with their CO during this unusual time, and have strong control measures in place, the survival of effected businesses may depend on two way communication and collaboration .
First, here are a few basic highlights from this recent guidance:
If a facility is closed or work can’t be done via telework the COs must put in writing that the GovCon cannot perform its contracted work at a government facility.
Paid leave for employees idled by the facility closure, including sick leave, may be direct charged to the affected contract, and not as regular leave that would have been recorded as fringe expense in the normal course of business, so long as it can be attributed to the Covid-19 outbreak from Jan. 31 – Sept. 30, 2020.
It is very important that the leave charged to the contract must be necessary to maintain the workforce in a ready state to permit a return to work upon facility re-opening and to ensure the safety of the workers.
The 3610 guidance is very clear that in order to be eligible for reimbursement of the cost of paid leave, GovCons must segregate these specific costs and actions so that compliance with these terms can be reasonably identified. The guidelines say, “segregation and identification of costs can be performed by any reasonable method, as long as the results provide a sufficient audit trail.”
GovCons can do this simply and effectively? This article in Compliance Week: Preparing for the compliance caveats that accompany CARES Act, PPP, gives good advice and counsel on the value of ERP to resolve this segregation issue. Your Unanet platform will enable your business to accurately track, manage, and segregate costs associated with the Covid-19 outbreak so you can specifically demonstrate to your CO precisely where your business incurred costs that are eligible for reimbursement.
About Kim Koster
Kim Koster serves as Unanet’s vice president of Product Marketing. Koster has more than 25 years of experience in product marketing and accounting. She joined Unanet as the director of Product Marketing in May 2017 before assuming her current role in May 2019. In addition, she’s also served in senior leadership positions with Deltek, ATK, Raytheon Missile Systems and JAVELIN Joint Venture. Her accolades include the 2016 Champions Award for Values, the 2012 President Club Award and was the Product Marketer of the Year in 2012.
