The only constant is change. If we have learned anything during this unprecedented time, it's that new information and updates are being disseminated almost daily. We want to assure our community of federal contractors that we are here to support you and we are in this together. As communities are taking precautions to stop the spread of COVID-19 and disrupting supply chains, we want to provide you with resources designed to assist small businesses through this difficult time.
There are two programs in the CARES Act intended to assist government contractors to respond to the economic conditions caused by COVID-19. These programs include both a loan and grant program under the Small Business Administration.
Economic Injury Disaster Loan Emergency Advance (EIDL)
Small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The process for government contractors to apply for financial assistance is very simple. look at the FICO score of the owner and take annual gross profit of 2019 by 2 and that will be the loan amount that would be received. At this point that are the only two items, they are considering when determining relief amount.
EIDL loans are on a 30-year term at either 3.75% for non-profit or 2.5% for-profit organizations. Payments are deferred for 1 year.
The Paycheck Protection Program (PPP)
The program is designed to provide incentives directly to small businesses to keep their staff on payroll by providing a loan of up to $10 million for essential operating expenses. The form is simple enough as any loan application, but some intricacies warrant an in-depth understanding of current state laws and regulations when making requests.
You can apply for the PPP at any lending institution that is approved to participate in the program through the existing U.S. Small Business Administration (SBA) 7(a) lending program and additional lenders approved by the Department of Treasury. It's very likely the bank you currently work with is a participant. Thousands of banks make up the SBA’s lending programs. To apply you can simply call your bank or find SBA-approved lenders their online Lender Match tool.
Service Contract Act (SCA)
Since this is unprecedented, there are no provisions in the SCA regarding current events. It's recommended that employees need to be in constant conversation with their employers. The contractor needs to contact the government and the employees need to be in conversation with employers.
If the Service Contract Act (SCA) or state or local laws regulating the payment of wages also apply, nothing in the FLSA or its regulations or interpretations overrides or nullifies any higher standards provided by such other laws or authority. (See the U.S. Department of Labor, Wage and Hour Division for additional information on the SCA or call 1-866-487-9243.)
Impact on Acquisitions
If you have current contracts in place, there are certain things you can be doing to protect and retain them. The most important thing you'll want to do is to make sure you have open communication with your contracting officers.
Have open conversations on the status of your business and if you are considered as essential personnel. It's paramount that you be available and responsive during this time. If you have made the transition to work remotely, you'll want to be sure that all of your systems are functioning properly to ensure smooth delivery and transactions.
OFCCP Continues Operations During COVID-19
Department of Labor Office of Federal Contract Compliance Programs are remaining open during the coronavirus pandemic. The have stated:
If contractors are experiencing difficulty in having their employees accessible during a review or experiencing any other challenges related to the health crisis, OFCCP will remain flexible by coordinating with them and providing reasonable extensions where needed. Contractors and complainants should reach out to their local OFCCP point of contact to check the status of open evaluations and investigations.
If you need assistance with any other OFCCP matters related to the health crisis, you can submit an inquiry online here.
DCAA Compliant & Audit Ready Accounting
Remember that health is of the utmost importance at this time and we are here to help you nurture the financial health of your company. Our team is ready to help you through these uncertain times and beyond. We believe in providing timely, accurate financials to give you the tools to make the best decisions possible for your unique situations.