OMB follows DOD with guidance on paying idled contractors

The Office of Management and Budget followed the Department of Defense in issuing guidelines reminding agency heads that the recent relief and stimulus bill supports continued pay to idled contractors who are not telework eligible.

Section 3610 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act expressly permits such paid leave.

The guidance from Michael Rigas, acting deputy director for management at OMB, came a day after a letter from a consortium of trade groups requesting "implementation guidance to ensure that all federal agencies understand the acquisition tools available and have a consistent approach to ensuring resilience across the total force as our nation weathers this crisis."

Rigas's memo tells agencies to consider keeping contractors in a "ready state" by reimbursing paid contractor leave. Contractors that might be unable to perform their work remotely, or have not been ruled essential "may face unprecedented hardships" because of COVID-19, it said. As such, the memo said contractor paid leave could be in the best interests of federal agencies looking to keep missions on track.

OMB also included guidance on tracking payment under the provision to prevent double-dipping and to make sure contracts are appropriately modified to accommodate It recommended modifying contracts to reimburse allowable paid leave costs.

The memo also advises contracting offices to work closely with their Small and Disadvantaged Business Utilization offices to insure small business contractors understand the resources that are available to them – including the loan programs outside the section 3610 policies that cover federal contractors in particular.

"Be mindful of the challenges faced by small businesses. Small businesses whose work must be stopped because of COVID-19 may face the most difficult economic hardships," Rigas wrote.