House Panel’s Annual Defense Policy Bill Includes Leave Flexibility for Pentagon Contractors

The version of the annual defense policy bill approved by a House panel this week includes a provision to enact permanent leave flexibility for defense contractors, as industry associations had advocated. 

The House Armed Services Committee included language in the fiscal 2022 National Defense Authorization Act approved early on Thursday that would make permanent the ability to keep contractors in a ready state that was originally established in the March 2020 CARES Act for coronavirus relief. 

The massive defense package included the Just In Case Act, which “establishes special emergency reimbursement authority for the [Department] of Defense, similar to that provided by Sec. 3610 of the CARES Act, to allow contractors to be reimbursed if they are unable to work on-site due to a pandemic,” said the office of Rep. Rob Wittman, R-Va., vice ranking member of the House Armed Services Committee and ranking member of the panel’s Sea Power and Projection Forces subcommittee. Wittman and Rep. Anthony Brown, D-Md., introduced the standalone act in August. “The Secretary of Defense would have discretion to reimburse contractors in the event a disaster prevents on-site work by federal contractors,” said the office. 

The Professional Services Council, a trade association that represents over 400 companies that contract with the federal government, “is grateful for the efforts of Reps. Wittman and Brown and the Armed Services Committee members to include this provision in the House [authorization act],” said David Broome, executive vice president for government relations, in a statement on Thursday. 

This is “a great first step,” said Broome. The contractor association “looks forward to working with Congress to strengthen and expand this authority to all federal contractors for when the next emergency happens—be it a pandemic, cyber-attack, or natural disaster.”

In introducing the provision in August, Wittman said, “This will enable contractors—particularly small innovative businesses—to keep their workforces intact and weather the crisis when unable to perform on their contracts due to state, county and local government restrictions.”

Brown, a retired colonel in the U.S. Army Reserve, said upon introducing the bill that “ensuring continuity and resiliency within our broader defense workforce is essential to our national security and heading off threats to our homeland and citizens.” 

Over the summer, the Professional Services Council and other groups, such as the National Defense Industrial Association, called on Congress to enact the leave flexibility permanently. 

The Government Accountability Office reported in July that the Defense, Energy and Homeland Security departments and NASA used Section 3610 for a total of at least $882.8 million from January 31, 2020 to March 31, 2021, but the degree to which each used it varied. As part of the review, GAO interviewed 15 contractors with a variety of sizes, ownerships and structures as well as five industry associations (which included PSC). 

“Contractor representatives noted that the availability of paid leave reimbursement under Section 3610 reinforced workforce retention by boosting employee morale, allowing employees to maintain health benefits and paychecks during a time of uncertainty, and increasing safety by encouraging possibly sick employees to stay at home,” GAO said. “Contractors noted the effect of Section 3610 reimbursement on the ability of subcontractors—sometimes also small businesses—to remain viable and able to perform.” 

GAO recommended the Office of Management and Budget’s Office of Federal Procurement Policy share lessons learned from use of the leave provision, and OMB agreed.