Coronavirus Contractors Double-Dip Government Funds, Receiving Relief Money And Contracts

Government Contracts Partner Eric Crusius was quoted in USA Today about vendors acquiring both contracts from the federal government and relief money from the Paycheck Protection Program (PPP), citing economic strain from the coronavirus pandemic. It’s the kind of double-dipping federal auditors fear could be rampant, a collision between the need for supplies and a separate hastily created program aimed at keeping small businesses afloat. An analysis of $522 billion PPP spending data matched with $19.5 billion in federal coronavirus response shows that at least 700 vendors that scored federal coronavirus contracts also received emergency aid. Together those vendors received hundreds of millions of dollars in contracts – and at least $618 million in PPP loans through the Small Business Administration. The loan program does not preclude those with federal contracts from receiving or keeping the relief money, which has a low interest rate and a liberal loan forgiveness clause: if you use it to pay employees, you don’t have to repay it. Applicants need only certify their need based on self-reported “economic uncertainty.”  

“There’s some nuance and space for some type of post-audit recovery where the government could claw back the money,” said Mr. Crusius. “But it comes down to the smell test and it’s really not a good look when you’re getting millions in government contracts on top of PPP money.”

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