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”

DoD Urges Contracting Officer Transparency in COVID-19 Impacts

Albert B. Krachman and Dominique L. Casimir

The Department of Defense’s (“DoD”) Office of Under Secretary of Defense for Acquisition and Sustainment issued Guidance on March 10, 2020, addressing internal and external communications in response to the coronavirus COVID-19 pandemic. See Planning for Potential Novel Coronavirus Contract Impacts.

The Guidance states that the Contracting Officers (as distinguished from Program personnel) hold the contractual authority to address contract performance impacts related to COVID-19. Moreover, the Guidance encourages close communication between Contracting Officers and contractors, and stresses Contracting Officer transparency, a term not normally seen in contract administration guidance. In pertinent part the Guidance states as follows:

Communication between the Government and contractors is key to total workforce safety and mission continuity. Therefore, contracting officers should be as transparent as possible as they make decisions potentially impacting contract performance or contractor personnel. Contracting officers should also encourage their contractor site leads/leadership to engage with their employees as soon as possible to share information and discuss any COVID-19 concerns they have, and ask their contractors to identify potential impacts to the welfare and safety of their workforce or contract performance, which impacts our total force. Continue reading “DoD Urges Contracting Officer Transparency in COVID-19 Impacts”

Examining and Dispelling Common Misconceptions about Suspension and Debarment

Dominique L. Casimir

Contractors are well aware that being suspended or debarred renders them ineligible for federal contracts and subcontracts. Many contractors may believe that suspension and debarment are not realistic risks for them if they already have a robust ethics and compliance program or strong internal controls. Nevertheless, the risk of suspension and debarment can crop up suddenly and unexpectedly, such as when misconduct has been concealed or errors have gone undetected. For this reason, contractors should have a baseline understanding about what to do if they must engage with a Suspending and Debarring Official (“SDO”). This post explores ten common misconceptions about suspension and debarment, with the aim of helping contractors understand the landscape and respond effectively.

Common Misconception #1: We have already settled with another agency and paid a fine, so we will not be suspended or debarred. Continue reading “Examining and Dispelling Common Misconceptions about Suspension and Debarment”