12 Steps for Reducing CARES Act Enforcement Risks

William E. Lawler III, Gregory F. Linsin, Justin A. Chiarodo, Dominique L. Casimir, and Sara N. Gerber

The Coronavirus Aid, Relief and Economic Security, or CARES, Act provides more than a trillion dollars in relief to both small and large businesses in the form of loans, grants and tax credits, designed to quickly stabilize the economy during the ongoing crisis.

But this is not free money: The CARES Act also includes a robust oversight and enforcement regime to enable the government to combat fraud, waste and abuse. Experience shows that when this much government money is being spent, there will be investigations and enforcement actions.

The CARES Act is complex with evolving regulatory guidelines, and this increases the potential for missteps by companies trying to take advantage of the program’s benefits while navigating program requirements. How can companies manage this uncertainty and reduce the risk of becoming an enforcement target?

We offer 12 suggested steps.

To read the full article that was published in Law360 on May 11, 2020, please click here.

Implementation Guidance for Section 3610 of the CARES Act

Brian S. Gocial and Dominique L. Casimir

As we summarized on March 31, 2020, CARES Act Section 3610 throws an immediate lifeline to qualifying firms whose workforce has been displaced by coronavirus COVID-19 shutdowns. On April 8, 2020, the U.S. Department of Defense (“DOD”) issued Class Deviation 2020-O0013 authorizing contracting officers to immediately use a new cost principle, DFARS 231.205-79, to implement section 3610; and on April 9, 2020, the Office of the Under Secretary of Defense issued Implementation Guidance for Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act and Frequently Asked Questions. This blog post summarizes the new Federal Acquisition Regulation Supplement (“DFARS”) clause and guidance.

What is the purpose of CARES Act Section 3610 and DFARS 231.205-79?

Deviation 2020-O0013 establishes a new cost principle that will allow recovery of employee leave costs related to the COVID-19 pandemic where appropriate. The Class Deviation recognizes that “contractors are struggling to maintain a mission-ready workforce due to work site closures, personnel quarantines, and state and local restrictions on movement related to the COVID-19 pandemic that cannot be resolved through remote work.” To that end, contracting officers are instructed to use DFARS 231.205-79 “to appropriately balance flexibilities and limitations” and are directed to “consider the immediacy of the specific circumstances of the contractor involved and respond accordingly. The survival of many of the businesses the CARES Act is designed to assist may depend on this efficiency.” Continue reading “Implementation Guidance for Section 3610 of the CARES Act”

Veterans Affairs Granted Unprecedented Procurement Authority under P.L. 85-804

John M. Clerici and Merle M. DeLancey Jr.

On April 10, 2020, the President issued a Memorandum to the Secretary of the Department of Veterans Affairs (“DVA”) authorizing the exercise of authority under Public Law 85-804, 50 U.S.C. §§ 1431-35. (See Memorandum on Authorizing the Exercise of Authority under Public Law 85-804.) This is a significant action that contractors must understand and be prepared to use for their benefit.

P.L. 85-804’s expansive powers are rarely invoked, used only in unique circumstances that require “extraordinary contractual actions.” See FAR Part 50. President Obama relied on P.L. 85-804 in 2014 when he granted the Administrator of the United States Agency for International Development (“USAID”) the authority to indemnify companies from lawsuits related to contracts performed in Africa in support of USAID’s response to the Ebola outbreak. Because there are now other legal authorities the U.S. Government may use to offer liability protection in certain circumstances (e.g., the SAFETY Act of 2002; the PREP Act of 2005), conferring liability protection under P.L. 85-804 is uncommon. The use of the law to broadly expand the U.S. Government’s contracting powers is truly extraordinary. Continue reading “Veterans Affairs Granted Unprecedented Procurement Authority under P.L. 85-804”

A Federal Contractor’s Five-Part Guide to the CARES Act

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law. This massive $2.2 trillion economic package provides a host of opportunities and resources for all varieties of federal contractors—from those who need financial assistance through the coronavirus pandemic to those who can leverage their resources to assist the federal government in its response.

The five timely posts below discuss discrete portions of the CARES Act, how they might affect federal contractors, and what federal contractors can do to take advantages of the many programs and opportunities offered under the Act. Please contact us for assistance with any of these, or other components, of the Act.

1. The CARES Act Provides Much Needed Financial Relief for Small Businesses

Michael Joseph Montalbano
This article discusses the expanded $349 billion loan program set aside for small businesses under the CARES Act.

2. CARES Act § 3610: An Immediate Lifeline for Qualifying Federal Contactors Displaced by COVID-19

Michael J. Slattery
This article discusses § 3610 of the CARES Act, which provides funds that federal agencies can use to alleviate disruptions to federal contractors caused by the coronavirus pandemic.

 3. CARES Act Grant Programs: Searching for Opportunity in the Coronavirus Relief Effort

Tjasse L. Fritz
This article discusses the wealth of grant programs available to federal contractors and other businesses under the CARES Act.

4. CARES Act: Significant Funds for Defense Department and Defense Contractors

Adam Proujansky
This article discusses the billions of dollars in loans, loan guarantees, and other financial assistance available through the Department of Defense to defense industry contractors.

5. New Contracting Authorities and Preferences Established under the CARES Act

Albert B. Krachman
This article discusses new contracting authorities delegated under the CARES Act as well as sole source opportunities available under the Act.

As COVID-19 issues permeate virtually all aspects of commerce nationally and internationally, we stand ready to help. Blank Rome’s Coronavirus (“COVID-19”) Task Force includes interdisciplinary resources across every business sector from insurance recovery to HR.

The CARES Act Provides Much Needed Financial Relief for Small Businesses

Michael Joseph Montalbano

On March 27, 2020, Congress passed, and the President signed into law, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act is a massive $2.2 trillion law designed to stabilize the United States’ economy as the country deals with the novel coronavirus COVID-19.

One major component of the CARES Act is the $349 billion set-aside to provide relief for small businesses in the form of loans and other financial resources. Here we discuss the major components of this program that all small businesses need to know before deciding whether they should apply for one of these loans. Continue reading “The CARES Act Provides Much Needed Financial Relief for Small Businesses”

CARES Act § 3610: An Immediate Lifeline for Qualifying Federal Contactors Displaced by COVID-19

Michael J. Slattery

The recently enacted Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides $2.2 trillion to stabilize the American economy as the country deals with the novel coronavirus COVID-19. In addition to directly providing many American families with cash stimulus payments, the CARES Act provides federal funds, grants, loan guarantees, and other resources to a wide variety of entities to help them combat the virus and weather the storm of its effects. These include state, local, and tribal governments; hospitals and healthcare workers; law enforcement and first responders; scientific research institutions; small businesses; local schools and universities; and federal contractors.

While contractors should note that the relief window is not open ended and agencies can only provide relief up to September 6, 2020, for federal contractors, the CARES Act provides potential new business opportunities, and throws an immediate lifeline to qualifying firms whose workforce has been displaced by COVID-19 shutdowns.

Continue reading “CARES Act § 3610: An Immediate Lifeline for Qualifying Federal Contactors Displaced by COVID-19”

CARES Act Grant Programs: Searching for Opportunity in the Coronavirus Relief Effort

Tjasse L. Fritz

The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act” or “the Act”) is a $2.2 trillion legislative package designed to stabilize the United States’ economy as the country deals with the novel coronavirus COVID-19. Included in the Act are a wealth of grant programs that may hold opportunities for companies able to position themselves appropriately during this crisis.

Of particular interest are grant programs related to healthcare, technology, and workforce sustainment, which include:

1. Entrepreneurial development grants

Section 1103 of the CARES Act provides a $240 million grant fund for development of programs to provide education, training, and advising to covered small business concerns. Training topics include:

    • How to apply for Small Business Administration (“SBA”) resources, including business resiliency programs;
    • COVID-19 transmission prevention practices; and
    • How to manage and practice teleworking.

An additional $25 million grant is available for development of a centralized information hub where these educational materials may be accessed. Continue reading “CARES Act Grant Programs: Searching for Opportunity in the Coronavirus Relief Effort”