DoD Implements Section 3610 of CARES Act by Converting It Into a Cost Principle: Reflections and Best Practices
On April 8, 2020, the Office of the Undersecretary of Defense issued a “Class Deviation” to the Defense Federal Acquisition Regulation Supplement, by issuing a cost principle governing the allowability of paid leave—including sick leave—incurred under certain circumstances arising from the COVID-19 pandemic. This provision enhances the ability of defense contractors to recover extraordinary labor expenses from the Federal government, the entitlement to which would otherwise be uncertain. Significantly for contractors in immediate need and eligible for recovery under CARES Act Section 3610, the class deviation reflects the steady pressure from Congress and others for DoD to provide guidance and help to affected, covered contractors. In the Memorandum issuing the deviation, the Acting Principal Director, Defense Pricing & Contracting (APD,DP&C) provides guidance to contracting officers declaring that “[i]t is imperative that we support affected contractors, using the acquisition tools available to us, to ensure that, together, we remain a healthy, resilient, and responsive total force.” The Memorandum, however, immediately tempers that imperative guidance with clarification about the limited circumstances triggering the relief, specification that eligibility for any other relief should be pursued first (or at least calculated and subtracted from any claim under Section 3610), and a reminder that contracting officers must act as “good stewards of taxpayer funds.”
