Certified Cost and Pricing Data Thresholds to Increase July 1, 2018

Scott Arnold and Sara N. Gerber

On July 1, 2018, the threshold for obtaining certified cost and pricing data increases substantially from $750,000 to two million dollars. The change was authorized by the Department of Defense pursuant to a class deviation, pending official rulemaking and publication in the Federal Acquisition Regulation (“FAR”). The class deviation implements Section 811 of the National Defense Authorization Act (“NDAA”) for Fiscal Year 2018, which raised the certified pricing threshold contained in the Truthful Cost or Pricing Data Act (still commonly referred to as “TINA” based on the former name of the relevant statute, the Truth in Negotiations Act). The Civilian Agency Acquisition Council recently followed suit, advising other federal agencies that they “may authorize a class deviation to implement the threshold change.” In addition to the increase under the NDAA, the TINA threshold is also subject to adjustment every five years to keep pace with inflation. See 41 U.S.C. § 1908. The last adjustment for inflation, made in 2015, raised the threshold by $50,000. Continue reading “Certified Cost and Pricing Data Thresholds to Increase July 1, 2018”

Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?

Merle M. DeLancey

Recently, the United States District Court for the District of Columbia dismissed a qui tam action involving allegations of fraud in connection with country of origin requirements imposed by the Trade Agreements Act (“TAA”). United States ex rel. Folliard v. Comstor Corp., __ F. Supp. 3d __, 2018 WL 1567620 (D.D.C. 2018).

Comstor involved a False Claims Act (“FCA”) action filed by a serial whistleblower who alleged two contractors violated the FCA by selling non-TAA compliant products on their General Services Administration (“GSA”) Federal Supply Schedule (“FSS”) contracts to federal government customers. Depending on the dollar value of the acquisition, most procurements are subject to either the Buy American Act (“BAA”) or TAA. Currently (2018), the BAA applies to supply procurements valued at or below $180,000. Accordingly, the TAA currently applies to such procurements valued in excess of $180,000. GSA has determined the TAA applies to FSS contracts. Continue reading “Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?”

Helping Get Deals Done: 10 Tips to Assess Rep and Warranty Insurance Language in Government Services M&A Transactions

Justin A. Chiarodo and James S. Carter

Representations and Warranties (“R&W”) insurance has burst into the market in the last five years and now plays a key role in mergers and acquisitions (“M&A”) involving government contractors. Both private equity and strategic buyers use R&W insurance to improve their competitive position, and sellers benefit by avoiding escrows and holdbacks. In short, it can help get deals done. R&W insurance continues to evolve, and government contracts deals present unique challenges.

Below we discuss the basic aspects of this important insurance product and provide 10 tips for potential R&W policyholders to consider when evaluating policies. Continue reading “Helping Get Deals Done: 10 Tips to Assess Rep and Warranty Insurance Language in Government Services M&A Transactions”

GAO’s New Bid Protest Regulations in Effect Now

Scott Arnold

Many of you are aware of the Government Accountability Office’s (“GAO’s”) new bid protest regulations; this is a reminder that they went into effect today, May 1, and include several significant changes. You can see the April 2, 2018, Federal Register text of the revisions here, and in addition to the changes themselves, the background and discussion of comments received in response to GAO’s earlier proposed changes are worth reading to fully understand the new rules and where GAO is coming from.

A quick summary of the most important changes: Continue reading “GAO’s New Bid Protest Regulations in Effect Now”

New DOD Class Deviation Changes Debriefing Process

Scott Arnold

The United States Department of Defense (“DOD”) has amended the process for debriefings required under Federal Acquisition Regulation (“FAR”) 15.506 to allow for offeror questions related to the debriefing. Offerors are allowed up to two business days following a debriefing to submit written questions, and the agency has up to five business days after receipt of the questions to submit written responses. The agency must hold the debriefing open until it delivers its written responses to the disappointed offeror. The new process applies to all DOD debriefings required under FAR 15.506.

The purpose of this new rule implementing section 818 of the 2018 National Defense Authorization Act (“NDAA”) is to improve the quality of debriefings and reduce the number of situations where disappointed offerors feel compelled to protest because the information they receive in debriefings is insufficiently detailed to convince them that the selection decision was fair. More fulsome debriefings should allow offerors to make more informed decisions about whether to protest. Continue reading “New DOD Class Deviation Changes Debriefing Process”

New Medicaid Rebate Agreement

Merle M. DeLancey

On March 23, 2018, the Centers for Medicare & Medicaid Services (“CMS”) announced the introduction of a new Medicaid National Drug Rebate Agreement. The new Agreement incorporates legislative and regulatory changes, including, for example, the Affordable Care Act, which have occurred since the original Agreement was published in 1991.

Manufacturers currently participating in the Medicaid Program have until October 1, 2018, to sign the new Agreement. Failure to enter into a new Agreement by October 1, will result in termination of a manufacturer’s existing Agreement.

While the new Agreement does not contain significant changes from the existing Agreement, several changes are worth noting and repeating: Continue reading “New Medicaid Rebate Agreement”

Do Federal Supply Schedule Contracts Still Have Value?

Merle M. DeLancey

Over the past several months, there has been a confluence of congressional and agency actions that will have a significant impact on Federal Supply Schedule (“FSS”) contract holders. These changes are so significant that they will likely cause companies with FSS contracts to question whether having an FSS makes sense. These changes could also cause companies to restructure the segments of their companies that are responsible for selling to the federal government.

Order Level Materials

In late January 2018, the General Services Administration (“GSA”) issued its Order Level Materials (“OLM”) final rule. This rule allows agencies to purchase supplies or services in direct support of a task or delivery order placed against FSS contract or Blanket Purchase Agreement (“BPA”). OLMs are subject to special ordering procedures. See GSAR 552.238-82. For example, the OLMs cannot have been known when an FSS contract or BPA was awarded. OLMs (excluding travel) cannot exceed 33.33 percent of the total value of the applicable task or delivery order. Whether an FSS holder is required to obtain competitive quotes for an OLM order depends upon the value of the order and the FSS holder’s purchasing system. Continue reading “Do Federal Supply Schedule Contracts Still Have Value?”