WASHINGTON ― Trade groups are urging lawmakers to extend the window for reimbursing government contractors for costs related to COVID-19 as Congress works to reach a deal on its next stimulus package.
The current window is set to close Sept. 30.
Government contractors, “are continuing to face the same ‘ready state’ workforce sustainment challenges that justified” the initial authorization of reimbursements under Section 3610 of the CARES Act, the National Defense Industrial Association and seven other groups said in the latest letter Friday to lobby top congressional leaders.
The group called for the deadline to be moved to Dec. 31, 2020, in the letter to House Speaker Nancy Pelosi, House Minority Leader Kevin McCarthy, Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer, as well as House Majority Leader Steny Hoyer.
“Such an extension will support the continuity of government operations while preserving the option to assess the impact of COVID-19 on federal operations in the new fiscal year,” the letter reads.
The trade groups also asked that Congress use the next aid package to fund a request for $11 billion from the Defense Department, and a less publicized request from the intelligence community, to make reimbursements from. Defense officials have warned they cannot absorb the costs without jeopardizing modernization and readiness accounts.
Among the Washington trade groups that signed the letter: the Armed Forces Communications and Electronics Association, Center for Procurement Advocacy, Associated General Contractors of America, Computing Technology Industry Association, Intelligence and National Security Alliance, Professional Services Council and U.S. Chamber of Commerce.
The pandemic has created weapons program slowdowns, temporary factory closures and cash flow problems, particularly for smaller firms. The Pentagon was been working in close communication to respond to the problems, largely by making billions of dollars in advance payments to contractors.
Because the federal government has only in recent weeks released guidance for the 3610 reimbursements, and Congress has not appropriated for them, companies have held back filing applications, according to NDIA’s director of legislative policy, Kea Matory.
“Once that expiration has transpired, if you have to have a closure, you have to eat that cost, which will further damage companies already struggling to survive with all the impacts of COVID,” Matory said. “Companies need this money and they need the extension.”
Joe Gould is senior Pentagon reporter for Defense News, covering the intersection of national security policy, politics and the defense industry.