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ARTICLE · 25 MAY 2020

PPP And Section 3610: Can Government Contractors Accept Both?

Small businesses impacted by the coronavirus (COVID-19) pandemic may apply for forgivable loans under the Coronavirus Aid, Relief, and Economic Security Act's (CARES Act) Paycheck Protection Program.

United StatesCoronavirus (COVID-19)

Highlights

  • The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides relief for certain payroll-related costs to small businesses under the Paycheck Protection Program (PPP) and authorizes (but does not require) an adjustment for government contractors of up to 40 hours per week of leave for certain employees unable to work because of COVID-19-related restrictions under Section 3610 of the CARES Act.
  • Government contractors that qualify for both forgivable loans under the PPP and an adjustment under Section 3610 face complex and sometimes conflicting guidance on whether they are permitted to accept funds under both CARES Act programs.
  • Most agency guidance recognizes contractors' ability to access both programs, so long as the funds are not applied to cover the same costs. However, some agency regulations and contract modifications suggest that Section 3610 relief must be reduced by the amount of PPP or other COVID-19 funding for which a

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