A Government Accountability Office (GAO) report cites estimates from Department of Defense (DoD) officials that defense contractors have over $4 billion in paid leave costs that are potentially eligible for reimbursement under the CARES Act.

Section 3610 of the CARES Act authorized Federal agencies to reimburse contractors for paid leave provided to contractor personnel and subcontractors during the COVID-19 pandemic. GAO reviewed four agencies that reported the use of Section 3610, totaling at least $882.8 million over 14 months.

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The four agencies that GAO reviewed are DoD, Department of Energy, Department of Homeland Security (DHS) and NASA. The range of potentially reimbursable expenses varies from $1.4 million at DHS to $760.7 million at Energy.

Defense contractors, DoD officials estimate, have more than $4 billion in paid leave costs that are potentially eligible for reimbursement under section 3610.

“Defense officials also noted, however, that the department does not plan to reimburse this full amount using existing funding,” wrote GAO. “Agencies also based their reimbursement decisions on the nature of the work performed by contractors, such as whether telework was an option.”

The four agencies that GAO reviewed implemented policies and tracked reimbursements in different ways, and GAO recommends that the Office of Management and Budget (OMB) collects and shares “lessons learned about reimbursing contractors to help inform future Federal response to emergencies.”

OMB concurred with this recommendation.

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Jordan Smith
Jordan Smith
Jordan Smith is a MeriTalk Staff Reporter covering the intersection of government and technology.
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