DFARS Cybersecurity Compliance Countdown: Are You Ready?

Justin A. Chiarodo and Carolyn Cody-Jones

It’s almost here. After years of rulemaking, covered defense contractors will soon be fully subject to heightened cybersecurity standards for covered defense information (“CDI”) on IT systems under DFARS 252.204-7012, and contractors submitting new proposals will be representing that their systems are compliant with these security requirements pursuant to DFARS 252.204-7008. We discuss in this post seven compliance tips beyond the basics that are worth revisiting during this final compliance push. Continue reading “DFARS Cybersecurity Compliance Countdown: Are You Ready?”

Risk Management in the Export Controls Minefield (Part 2 in a Series)

David Yang

As the recent Bright Lights USA case demonstrates, export violations continue to be met by aggressive enforcement actions by U.S. government authorities. In Bright Lights USA, the U.S. State Department’s Directorate of Defense Trade Controls (“DDTC”) charged and fined a small manufacturer $400,000 for violating the International Traffic in Arms Regulations (“ITAR”) by exporting, without obtaining a license, engineering designs and drawings abroad for minor vehicle spare parts (such as rubber seals, gaskets and grommets, etc.) in connection with bids sent to foreign manufacturers to produce the parts for Bright Lights to resell to its commercial and public sector customers. Although the parts were commercial items and many other similar parts in the category in which Bright’s Lights conducted business had transitioned off of the U.S. Munitions List, the company had failed to update its list for parts that were still controlled. The DDTC found that the violations had occurred in large part due to the company’s “significant training and compliance program deficiencies.” Continue reading “Risk Management in the Export Controls Minefield (Part 2 in a Series)”

Senate Proposes Major Overhaul to the GAO Bid Protest Process

David Yang

On September 18, 2017, the Senate passed its version of the 2018 National Defense Authorization Act (“NDAA”). The proposed bill, which heads into conference with the House to resolve the competing bills, will implement significant changes to the federal bid protest practice at the U.S. Government Accountability Office (“GAO”), should the bill emerge more or less intact from conference and if it is signed into law by the President. Continue reading “Senate Proposes Major Overhaul to the GAO Bid Protest Process”

Disaster Relief Contracting: How to Avoid the Pitfalls

Justin A. Chiarodo and Stephanie M. Harden

Hurricane Harvey’s damage to Texas and other areas is virtually unprecedented and is already estimated to be in the tens of billions of dollars. And Hurricane Irma, hurtling towards Florida, could likewise cause catastrophic damage. Though every disaster presents unique recovery challenges, a common theme in disaster relief efforts is the key role of the Federal Emergency Management Administration (“FEMA”) and a federal law known as the Stafford Act. Contractors eager to assist with relief and rebuilding efforts should pay close attention to the legal landscape underpinning the public funding behind disaster relief efforts, particularly given the scrutiny these efforts will receive in the wake of Hurricane Katrina. Continue reading “Disaster Relief Contracting: How to Avoid the Pitfalls”

Compounding Pharmacies Should Expect Greater Scrutiny as Government Healthcare Budgets Get Squeezed

Merle DeLancey

As Congress continues to grapple over healthcare reform, there are many uncertainties. However, one thing is clear: as government healthcare funding shrinks, federal and state enforcement agencies will continue to target compounding pharmacies for potential fraud.

Compounded drug use and related government spending, particularly on topical creams and ointments, has skyrocketed. Many argue that drug compounding regulation remains murky, making it too easy to prosecute traditional compounders. Compounding advocates suggest regulation of compounders has been heavy-handed and ignores the multiple benefits associated with compounding. Continue reading “Compounding Pharmacies Should Expect Greater Scrutiny as Government Healthcare Budgets Get Squeezed”

NDAA Section 811: New Waiver Authority—What Does It Mean?

Scott Arnold

The Senate’s markup of the 2018 National Defense Authorization Act (“NDAA”) adds new language to 10 U.S.C. § 2304 that would give the Secretary of Defense authority to waive provisions of law that result in only one responsible bidder for a contract for purposes of expanding competition. However, the new provision, which appears in Section 811 of the bill and which, if enacted, would be part of a new subsection (m) added to 10 U.S.C. § 2304, contains a significant carve-out such that it would not permit the Secretary of Defense to impose additional competition in connection with the Small Business Administration’s 8(a) program.

Continue reading “NDAA Section 811: New Waiver Authority—What Does It Mean?”

ASBCA Grants $253 Million Northrop Post-Retirement Benefits Claim

David Yang

Pension and other post-retirement benefit expenses have long constituted a substantial obligation on the part of contractors under cost-type contracts and are often the subject to disputes with the government as to the calculation and allowability of such costs. While court and board decisions regarding pension-related disputes have tended to be a mixed bag, the decisions have more often sided with the government. However, the Armed Services Board of Contract Appeals’ (“ASBCA” or “Board”) July 13, 2017, decision in Northrop Grumman Corp., ASBCA No. 60190, may signal a more favorable trend for contractors in connection with such issues. In this case, Northrop filed a claim for $253 million in retiree health benefits over an 11-year period from 1995 to 2006, which the Defense Contract Management Agency (“DCMA”) disallowed because Northrop used an outdated accounting practice for accruing such costs under the relevant Federal Acquisition Regulation (“FAR”) cost accounting requirements. Continue reading “ASBCA Grants $253 Million Northrop Post-Retirement Benefits Claim”