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OFFICE OF THE UNDER SECRETARY OF DEFENSE
3000 DEFENSE PENTAGON
WASHINGTON, DC 20301-3000
ACQUISITION
AND SUSTAINMENT
In reply refer to
DARS Tracking Number: 2020-O0013, Revision 4
MEMORANDUM FOR COMMANDER, UNITED STATES CYBER
COMMAND (ATTN: ACQUISITION EXECUTIVE)
COMMANDER, UNITED STATES SPECIAL OPERATIONS
COMMAND (ATTN: ACQUISITION EXECUTIVE)
COMMANDER, UNITED STATES TRANSPORTATION
COMMAND (ATTN: ACQUISITION EXECUTIVE)
DEPUTY ASSISTANT SECRETARY OF THE ARMY
(PROCUREMENT)
DEPUTY ASSISTANT SECRETARY OF THE NAVY
(PROCUREMENT)
DEPUTY ASSISTANT SECRETARY OF THE AIR FORCE
(CONTRACTING)
DIRECTORS, DEFENSE AGENCIES
DIRECTORS, DEFENSE FIELD ACTIVITIES
SUBJECT: Class Deviation—CARES Act Section 3610 Implementation
Effective immediately, this class deviation revises and supersedes Class Deviation 2020-
O0013 Revision 3 issued on January 13, 2021. The purpose of this revision is to extend the date
through which paid leave may be taken to be eligible for reimbursement under section 3610,
pursuant to section 4015 of the American Rescue Plan Act of 2021 (Pub. L. 117-2), enacted on
March 11, 2021. Where appropriate, the time period for which paid leave must be taken is
changed from March 27, 2020, through March 31, 2021, to March 27, 2020, through
September 30, 2021.
Pursuant to FAR 31.101, Objectives, this class deviation to FAR 31 and DFARS 231 is
effective immediately and authorizes contracting officers to use the attached DFARS 231.205-
79, CARES Act Section 3610 Implementation, as a framework for implementation of section
3610, Federal Contractor Authority, of the Coronavirus Aid, Relief, and Economic Security
(CARES) Act (Pub. L. 116-136).
The CARES Act was enacted on March 27, 2020, in response to the Coronavirus Disease
2019 (COVID-19) national emergency. Section 3610 of the CARES Act allows agencies to
reimburse, at the minimum applicable contract billing rates (not to exceed an average of 40 hours
per week), any paid leave, including sick leave, a contractor provides to keep its employees or
subcontractors in a ready state from March 27, 2020, through September 30, 2021, including to
protect the life and safety of Government and contractor personnel, during the public health
emergency declared for COVID–19 on January 31, 2020.
As expressed in the OUSD(A&S) Defense Pricing and Contracting Memorandum,
Managing Defense Contracts Impacts of the Novel Coronavirus, dated March 30, 2020, it is
important that our military, civilian, and contractor communities work together to withstand the
Class Deviation 2020-O0013, Revision 4
CARES Act Section 3610 Implementation
effects of COVID-19 and maintain mission readiness. Currently, many Department of Defense
(DoD) 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. It is imperative that we
support affected contractors, using the acquisition tools available to us, to ensure that, together,
we remain a healthy, resilient, and responsive total force.
It is also important that our contracting officers are good stewards of taxpayer funds
while supporting contractor resiliency. Therefore, contracting officers shall use the attached
DFARS 231.205-79, CARES Act Section 3610—Implementation, when implementing section
3610, to appropriately balance flexibilities and limitations.
Some contractors may receive compensation from other provisions of the CARES Act, or
other COVID-19 relief scenarios, including tax credits, and contracting officers must avoid
duplication of payments. For example, the Paycheck Protection Program (PPP) established
pursuant to sections 1102 and 1106 of the CARES Act may provide, in some cases, a direct
means for a small business to obtain relief. A small business contractor that is sheltering-in-
place and unable to telework could use the PPP to pay its employees and then have the PPP loan
forgiven, pursuant to the criteria established in the interim rule published by the Small Business
Administration. In such a case, the small business should not seek reimbursement for the
payment from DoD using the provisions of section 3610.
Contractors are responsible for supporting any claimed costs, including claimed leave
costs for their employees, with appropriate documentation and for identifying credits that may
reduce reimbursement under section 3610. Contracting officers are encouraged to work with
contractors to understand how they are using or plan to use the COVID-19 relief provisions and
encourage contractors to use existing contract terms or the relief provisions available to them in
response to COVID-19. In addition, it is important that contracting officers secure
representations from contractors regarding any other relief claimed or received stemming from
COVID-19, including an affirmation that the contractor has not or will not pursue reimbursement
for the same costs accounted for under their request, to support their requests for reimbursement
under section 3610.
When implementing section 3610, contracting officers shall 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. For
example, the impact of COVID-19 on a contractor providing labor services will differ from the
impact on a contractor that develops information systems. Some contractors may be unable to
conduct any business during the COVID-19 pandemic. As a result, such contractors would
generate no new revenue, and may have difficulties making payroll, retaining employees, and
meeting other financial obligations. In contrast, other contractors may still have incoming
revenue, and be able to conduct work remotely. While impacts will certainly be experienced by
many contractors, some will have a more immediate need for relief than others.
Section 3610 seeks to provide many flexibilities for contracting officers, including the
authority to:
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Class Deviation 2020-O0013, Revision 4
CARES Act Section 3610 Implementation
• Enable the contractor to stay in a ready state (i.e., able to mobilize in a timely manner) by
treating as allowable paid leave costs a contractor incurs to keep its employees and
subcontractor employees in such a state.
• Use any “funds made available to the agency” by Congress to reimburse contractors for
workers’ lost time, not otherwise reimbursable, between March 27, 2020, and September
30, 2021, if the contractor provides leave to its employees or subcontractor employees “to
maintain a ready state, including to protect the life and safety of Government and
contractor personnel,” which include, but are not limited to, quarantining, social
distancing, or other COVID-19 related interruptions, as discussed in Office of
Management and Budget Memorandum M-20-18, Managing Federal Contract
Performance Issues Associated with the Novel Coronavirus, dated March 20, 2020;
• Modify contracts to provide for reimbursement of allowable paid leave costs, not
otherwise reimbursable, without securing additional consideration; and
• Provide such reimbursement on any contract type.
Section 3610 also provides limitations on reimbursements:
• A contractor may only receive reimbursement if its employees or subcontractor
employees:
Cannot perform work on a government-owned, government-leased, contractor-
o
owned, or contractor-leased facility or site approved by the Federal Government for
contract performance due to closures or other restrictions; and
Are unable to telework because their job duties cannot be performed remotely during
o
the public health emergency declared on January 31, 2020, for COVID–19.
• Reimbursement is authorized only:
At the appropriate rates under the contract for up to an average of 40 hours per week;
o
and
For contractor or subcontractor payments made for costs incurred, not otherwise
o
reimbursable, not earlier than March 27, 2020, and not later than September 30, 2021;
• The Government must reduce the maximum reimbursement authorized by the amount of
credit the contractor is allowed pursuant to division G of the Families First Coronavirus
Response Act (Pub. L. 116–127) and any applicable credits the contractor is allowed
under the CARES Act or other credit allowed by law that is specifically identifiable with
the public health emergency declared on January 31, 2020 for COVID–19; and
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Class Deviation 2020-O0013, Revision 4
CARES Act Section 3610 Implementation
• Reimbursement is contingent upon the availability of funds.
We anticipate the need for additional guidance and will continue to provide answers to
frequently asked questions and provide additional implementation information and guidance as
appropriate.
This class deviation remains in effect until rescinded. My point of contact is Mr. Greg
Snyder, who is available by telephone at (703) 614-0719 or by email at
gregory.d.snyder.civ@mail.mil.
John M. Tenaglia
Principal Director,
Defense Pricing and Contracting
Attachment
As stated
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Attachment
Class Deviation 2020-O0013, Revision 4
CARES Act Section 3610 Implementation
Changes are indicated by a change bar in the right-hand margin.
DFARS 231.205-79 CARES Act Section 3610 - Implementation
(a) Applicability.
(1) This cost principle applies only to a contractor:
(i) That the cognizant contracting officer has established in writing to be an affected
contractor;
(ii) Whose employees or subcontractor employees:
(A) Cannot perform work on a government-owned, government-leased, contractor-
owned, or contractor-leased facility or site approved by the federal government
for contract performance due to closures or other restrictions, and
(B) Are unable to telework because their job duties cannot be performed remotely
during the public health emergency declared on January 31, 2020, for
Coronavirus (COVID–19).
(2) The maximum reimbursement authorized by section 3610 shall be reduced by the amount
of credit a contractor is allowed pursuant to division G of the Families First Coronavirus
Response Act (Pub. L. 116– 127) and any applicable credits a contractor is allowed under
the CARES Act (Pub. L. 116-136) or other credit allowed by law that is specifically
identifiable with the public health emergency declared on January 31, 2020 for COVID–
19.
(b) Allowability.
(1) Notwithstanding any contrary provisions of FAR subparts 31.2, 31.3, 31.6, 31.7 and
DFARS 231.2, 231.3, 231.6, and 231.7, costs of paid leave (including sick leave), are
allowable at the appropriate rates under the contract for up to an average of 40 hours per
week, and may be charged as direct charges, if appropriate, if incurred for the purpose of:
(i) Keeping contractor employees and subcontractor employees in a ready state,
including to protect the life and safety of Government and contractor personnel,
notwithstanding the risks of the public health emergency declared on January 31,
2020, for COVID-19, or
(ii) Protecting the life and safety of Government and contractor personnel against risks
arising from the COVID-19 public health emergency.
(2) Costs covered by this section are limited to those that are incurred as a consequence of
granting paid leave as a result of the COVID-19 national emergency and that would not
be incurred in the normal course of the contractor’s business. Costs of paid leave that
would be incurred without regard to the existence of the COVID-19 national emergency
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Attachment
Class Deviation 2020-O0013, Revision 4
CARES Act Section 3610 Implementation
Changes are indicated by a change bar in the right-hand margin.
remain subject to all other applicable provisions of FAR subparts 31.2, 31.3, 31.6, 31.7
and DFARS 231.2, 231.3, 231.6, and 231.7. In order to be allowable under this section,
costs must be segregated and identifiable in the contractor’s records so that compliance
with all terms of this section can be reasonably ascertained. Segregation and
identification of costs can be performed by any reasonable method as long as the results
provide a sufficient audit trail.
(3) Covered paid leave is limited to leave taken by employees who otherwise would be
performing work on a site that has been approved for work by the Federal Government,
including on a government-owned, government-leased, contractor-owned, or contractor-
leased facility approved by the federal government for contract performance; but
(i) The work cannot be performed because such facilities have been closed or made
practically inaccessible or inoperable, or other restrictions prevent performance of
work at the facility or site as a result of the COVID-19 national emergency; and
(ii) Paid leave is granted because the employee is unable to telework because their job
duties cannot be performed remotely during public health emergency declared on
January 31, 2020, for COVID-19.
(4) The facility at which work would otherwise be performed is deemed inaccessible for
purposes of paragraph (b)(3) of this subpart to the extent that travel to the facility is
prohibited or made impracticable by applicable Federal, State, or local law, including
temporary orders having the effect of law.
(5) The paid leave made allowable by this section must be taken no earlier than March 27, 2020,
and no later than September 30, 2021.
(6) Costs made allowable by this section are reduced by the amount the contractor is eligible
to receive under any other Federal payment, allowance, or tax or other credit allowed by
law that is specifically identifiable with the public health emergency declared on January
31, 2020, for COVID–19, such as the tax credit allowed by division G of Public Law
116–127.
(7) The allowable amount is limited to the amount of funds specifically obligated on a
separate line item that cites the purpose of the funds is for reimbursement under section
3610 of the CARES Act.
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