U.S. Intelligence Contractors Say Virus Relief Funding Rules Fall Short

WASHINGTON — Federal contactors complained on Thursday that they were being given short shrift by guidelines released by the intelligence community for paying employees with coronavirus relief funds.

The guidelines from the Office of the Director of National Intelligence allow intelligence agencies to fund contractors for lost hours from March 27, the date President Trump signed the $2 trillion relief package into law. But federal contractors say the rules are far more restrictive than the Pentagon’s guidelines, which allow relief from losses the companies began to suffer starting at the end of January, when a national emergency was declared.

Because many of the nation’s intelligence agencies, like the Defense Intelligence Agency and the National Security Agency, are part of the military, it is not clear which set of rules applies.

At stake are millions of dollars to help intelligence contractors recover from losses in recent weeks, when their workers with top-secret clearances have been blocked from going to work. Because they work with classified material, which generally can be viewed only in secured rooms or on secured electronic systems, they have been unable to perform their jobs, putting the contracts at risk.

The Pentagon, in a memo on Wednesday, said its contractors could apply for relief for costs incurred from the end of January when a federal emergency was declared.

“Many Department of Defense contractors are struggling to maintain a mission-ready work force 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,” the Pentagon memo said. “It is imperative that we support affected contractors.”

The rules published by the intelligence director do allow contractors to apply for relief for costs incurred before the law went into effect. But that will require contractors to use a process that is widely seen as cumbersome and can take longer than a year to resolve.

“We are talking of tens of millions of dollars,” said David Berteau, the head of the Professional Services Council, a trade organization for government contractors. “Particularly for small companies, they won’t have the resources.”

Some government lawyers have said the funding law prohibits blanket payments from before the time it was enacted. Outside experts dispute that reading of the law. The White House’s budget office is expected to issue further guidance about federal contracts and the relief law.

Many intelligence contactors work inside the intelligence agencies they support. As the government put into practice social distancing guidelines, they were difficult to carry out inside national security agencies.

Working with classified material from home is not possible. So the intelligence agencies worked to slow the spread of the virus by limiting how many people could work in often-cramped classified work spaces.

The first people told to go home were contractors. Because they could not do their work, the payments of their contracts were put in jeopardy.

Some federal agencies, like NASA, have acted quickly to continue to pay on contracts, even when companies were not able to send their workers to their job sites, intent on keeping their highly trained work force in place.

Mr. Berteau said the congressional relief act was intended to assist companies doing national security work in retaining their work force and said agencies needed to ensure that adequate funds flowed to the contractors.

“The act was designed to keep people on the payroll because the economy needs that,” Mr. Berteau said. “Particularly for the federal contracting work force where it takes a long time to build up a skilled work force, we want to keep those workers working for the government.”

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