We have been keeping you up to date on the effects of COVID-19 on local government contracting. Now, the federal government has taken a huge step forward. On March 27, President Trump signed the Coronavirus Aid, Relief and Economic Security Act, providing billions in funds for private individuals, businesses, and government contracts. With respect to government contracts, the CARES Act provides $3.8 million for a defense health program, $1 billion for defense purchases pursuant to the Defense Production Act of 1950 over the next two years, and funds to improve information technology services at numerous federal government departments. These funds will provide a host of opportunities for existing and prospective government contractors.
The CARES Act also authorizes agencies to modify federal contracts with contractors whose employees cannot perform work (at a federally approved site) or telework. Agencies are permitted to amend contracts, without consideration, to require the government to reimburse paid sick or family leave paid between January 1, 2020, and September 30, 2020. The reimbursement cannot exceed an average of 40 hours per week per employee, and cannot exceed the minimum billing rates stated in the contract. Importantly, contractors must work with the agency to obtain this relief as it is not mandated by the CARES Act, but rather it is within the agency’s discretion.
This is just one facet of the CARES Act. Bilzin Sumberg is hosting a webinar on April 1 to update you on each part of the CARES Act. Please join us to have the most up to date information and an in-depth analysis of these issues going forward.
This information is intended to inform our clients and other friends about legal developments, including recent decisions of various municipalities, legislative, and administrative bodies. Because of the rapidly changing landscape related to COVID-19, we intend to send out regular updates. The information we provide is not intended as legal advice and viewers/readers should not rely on information contained in these materials to make business or legal decisions. Before making any legal decisions, consult your lawyer. Please do not hesitate to contact us should you need assistance responding to the many issues which have arisen, and will continue to arise, out of this situation.