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How Does the $2 Trillion Coronavirus Stimulus Package (CARES Act) Affect Government Contractors? Blog Feature
Bradley Wyatt

By: Bradley Wyatt on March 30th, 2020

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How Does the $2 Trillion Coronavirus Stimulus Package (CARES Act) Affect Government Contractors?

GSA Schedule | Government Business Development | Government | COVID-19 | 3 Min Read

On Friday, March 27th, President Trump signed a historic $2 Trillion Dollar Coronavirus aid package into law. This legislation, otherwise known as the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), will provide emergency relief to several groups including individuals, small businesses, large corporations, public health facilities, state and local governments, and education institutions. The CARES Act provides the largest emergency stimulus package in United States history as a result of bipartisan legislation negotiated by Democrats and Republicans to provide an immediate response to the growing COVID-19 crisis sweeping the nation.

What does the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) do?

The CARES Act provides much needed relief to American businesses and families through a myriad of policy solutions that include key provisions such as direct cash payments to consumers, relief for small businesses, infrastructure and personal protective equipment for public health officials, funding for education institutions, and direct aid for those state and local governments ravished by COVID-19 response efforts.

The CARES Act is 880 pages long, consisting of several different Divisions and Titles:

  • Division A—Keeping Workers Paid and Employed, Health Care System Enhancements, and Economic Stabilization
    • Title I—Keeping American Workers Paid and Employed Act
    • Title II—Assistance for American Workers, Families, and Businesses
    • Title III—Supporting America's Health Care System in the Fight Against the Coronavirus
    • Title IV—Economic Stabilization and Assistance to Severely Distressed Sectors of the United States Economy
    • Title V—Coronavirus Relief Funds
    • Title VI—Miscellaneous Provisions
  • Division B—Emergency Appropriations for Coronavirus Health Response and Agency Operations

Americans making $75,000 or less will receive up to $1,200 in direct cash payment ($150,000 for joint returns and $112,500 for single head of households), while children will receive $500 each. The emergency stimulus package also expands the ability for small businesses, 501(c)(3) non-profits, or physician practices to obtain loans to continue paying employees and maintain operations under Section 7(a) of the Small Business Act as a result of the $349 billion Paycheck Protection Loan Program. These loans may be forgivable if companies retain employees through the covered period. Equally important, the CARES Act provides up to $500 billion worth of taxpayer money to ensure loans and loan guarantees to eligible businesses, states, and municipalities struggling with enough funding needed to keep fighting COVID-19.

What Does This Mean for Government Contractors?

While the CARES Act provides much needed assistance to American families, businesses, and government institutions, it is important to note how the legislation will directly impact federal contractors. As detailed in a previous blog, the Defense Production Act (DPA) is the primary source of Presidential authority to expedite and expand the supply of resources from the U.S. Industrial Base to support military, energy, space, and homeland security programs. Included in the CARES Act is modified language that allows for certain funding limitations on purchases and commitments to create, maintain, protect, expand, or restore domestic industrial base capabilities to be removed under the DPA. Section 3610 of the CARES Act is extremely important for government contractors, as federal agencies are now granted authority to modify contracts or agreements to ensure contractors remain in a “ready state” and are paid if their job duties are unable to be performed remotely during this public health emergency. If you are looking to support the Governments effort against COVID-19, registering now with System for Award Management under the Disaster Response Registry in accordance with FAR Subpart 4.11 may help expedite your ability to receive a subsequent award.

State and Local Governments are also receiving increased funding from the CARES Act. The legislation designates $339.8 billion for programs to be instituted by state and local governments to fight the Coronavirus. Of the $339.8 billion provided in funding to state and local government, $274 billion is intended for specific COVID-19 response efforts, meaning increased demand for services and goods at the state and local level, which could result in more opportunity for your business to provide support. The other $150 billion in direct aid will go to state and local governments that are running out of funds as a result of the growing number of cases across the United States.

Winvale is Here to Help

While a large amount of uncertainty remains in these challenging times as a result of the growing Coronavirus pandemic, now is the time for contractors to continue to support the governments war against this dangerous disease. For more Coronavirus resources for government contractors, check out our new COVID-19 Resource Page. If you think your company can support the government’s efforts against COVID-19, please contact our team of experts today.

For more details about how the Coronavirus affects government contracting, register for our new webinar on April 22, Federal Contracting During the Coronavirus (COVID-19).

 

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About Bradley Wyatt

Bradley Wyatt is an Account Manager for Winvale’s Public Sector Technology department where he manages partner accounts as part of Winvale’s Schedule 70 Information Technology. Bradley is a native of Fredericksburg, Virginia and a graduate from James Madison University with his Bachelor’s of Science in Public Policy and Administration.