Author: Blank Rome LLP

ISDC Report Highlights New Flexibilities as Alternative Remedies Increase

Dominique L. Casimir and Tjasse L. Fritz


The Interagency Suspension and Debarment Committee (“ISDC”) has released its annual Section 873 Report to Congress for FY2020. The data in this report provides a big picture view of trends in suspension and debarment. Here’s what you need to know:

1. Debarments Increased in FY2020.

Debarments were up slightly, with 1,256 debarments in 2020 compared with 1,199 in 2019, bucking the downward trend of the previous six years. It is reasonable to expect that the increase in debarments will continue, particularly as the Government progresses in investigating CARES Act fraud.

2. Suspensions and Proposed Debarments Decreased.

Suspensions decreased, after a brief uptick in 2019, from 722 in 2019 to 415 in 2020, consistent with the general downward trend of years prior. Similarly, proposed debarments fell from 1,437 in 2019 to 1,317 in 2020. Interestingly, the ISDC attributes these decreases, “in part, to delays in mail service, travel restrictions, and postponements in court proceedings,” which means the FY2020 decrease is likely due to the COVID-19 pandemic rather than an actual Governmentwide downward trend in activity. And the decrease was not uniform: 13 of the 29 agencies reporting their FY2020 metrics actually increased the number of suspensions.

Continue reading “ISDC Report Highlights New Flexibilities as Alternative Remedies Increase”

New Government Contracts Associate in Washington, D.C.

Blank Rome LLP is pleased to announce that David L. Bodner has joined the firm’s Washington, D.C., office in the Government Contracts practice group, which continues to expand following the recent additions of partner Elizabeth Jochum and associates Samarth Barot and Amanda DeLaPerriere.

Learn more about David on our website.

Proposed Bill Would Bar Contractors from Conducting Business in Russia

Robyn N. Burrows

On March 21, 2022, Representative Carolyn B. Maloney (D-NY), Chairwoman of the House Oversight and Reform Committee, introduced the “Federal Contracting for Peace and Security Act” (H.R. 7185). In light of Russia’s military invasion of Ukraine, the proposed bill would prohibit federal agencies from contracting with companies operating in Russia. The Committee approved an amended version on April 6, and the bill will be sent to the House of Representatives for further consideration. If passed, the bill would have a significant impact on government contractors that continue to operate in Russia by terminating existing contracts and barring them from further contracting opportunities.

We provide below an overview of the key elements of the bill. We anticipate further clarifications as the bill proceeds through the legislative process. Contractors should closely monitor these developments as this legislation will likely pose challenges to companies seeking to quickly disentangle themselves from any ongoing Russian business.

Continue reading “Proposed Bill Would Bar Contractors from Conducting Business in Russia”

DoD’s Final Rule on Enhanced Post-Award Debriefings Provides Offerors Clarity on Automatic Stay Deadlines and Access to Agency’s Redacted Source Selection Decisions

Robyn N. Burrows and Luke W. Meier


The Department of Defense (“DoD”) recently issued its final rule amending the Defense Federal Acquisition Regulation Supplement (“DFARS”) to provide offerors enhanced post-award debriefing rights. DoD has provided these enhanced debriefing procedures since 2018 through a FAR Class Deviation, allowing offerors to submit additional questions after receiving the post-award debriefing. Four years later, DoD’s final rule clarifies when the clock for an automatic stay begins in an enhanced debriefing and provides greater transparency by allowing unsuccessful offerors in certain procurements access to the agency’s redacted source selection decision.

We highlight below several key elements of the final rule:

Access to Redacted Source Selection Decision Document

The final rule requires DoD to provide the source selection decision document in certain circumstances, redacted to remove confidential and proprietary information of other offerors. For awards over $100 million, DoD must automatically provide the source selection decision during the debriefing. Small businesses and nontraditional defense contractors on procurements resulting in awards over $10 million and up to $100 million are also entitled to a copy of the decision but must specifically request it—the agency will not automatically provide it to offerors.

Continue reading “DoD’s Final Rule on Enhanced Post-Award Debriefings Provides Offerors Clarity on Automatic Stay Deadlines and Access to Agency’s Redacted Source Selection Decisions”

GSA Relaxes Price Increase Limitations for FSS Contractors

Merle M. DeLancey Jr. and Sara N. Gerber


The General Services Administration (“GSA”) Office of Governmentwide Policy recently authorized contracting officers to provide relief to GSA contractors experiencing cost increases due to surging inflation. See Acquisition Letter. To assist struggling contractors, GSA issued a temporary moratorium on the enforcement of certain limitations contained in GSA economic price adjustment (“EPA”) clauses.

GSA issued the moratorium in response to an uptick in contractors’ requests for price increases and removal of items from their Federal Supply Schedule (“FSS”) contracts to avoid selling at a loss. In issuing the moratorium, GSA recognized that inflationary pressures and price volatility, caused by supply chain disruptions, strong demand, and labor shortages, are ongoing concerns unlikely to abate in the near term. GSA acknowledged that it must help contractors weather this “unusual time”—especially small businesses and new market entrants—to ensure a resilient and diverse federal industrial base and the government’s continued access to critical “products, services, and solutions.”

Continue reading “GSA Relaxes Price Increase Limitations for FSS Contractors”

The Medicaid Drug Rebate Program and Value-Based Purchasing

Merle M. DeLancey Jr.

On March 23, 2022, the Centers for Medicare and Medicaid Services (“CMS”) issued long-awaited guidance regarding how drug manufacturers are to report multiple best prices (“BPs”) to the Medicaid Drug Rebate Program (“MDRP”) under value-based purchasing (“VBP”) arrangements. See Manufacturer Release 116 (medicaid.gov/prescription-drugs/downloads/mfr-rel-116.pdf). CMS delayed issuing the guidance to allow states, payers, and manufacturers to administratively prepare for multiple BP reporting in connection with VBP arrangements. The regulatory amendments are effective July 1, 2022.

VBP Arrangements and Medicaid’s Best Price Rule

VBP arrangements consist of additional rebates or price concessions that states may be able to earn based on a drug’s clinical outcomes in Medicaid beneficiaries. CMS’ challenge was reconciling Medicaid’s long-standing BP reporting rule used to calculate manufacturer rebate payments to states with anticipated low prices available under VBP arrangements. Since 1991, the MDRP agreed to cover every drug a manufacturer sells regardless of price. In exchange for this unprecedented access, manufacturers agreed to pay rebates ensuring that Medicaid programs paid no more than the “best prices” paid by manufacturers’ commercial customers. Many argued that Medicaid’s BP rule prevented states from accessing innovative manufacturer programs involving cutting-edge therapies.

Continue reading “The Medicaid Drug Rebate Program and Value-Based Purchasing”

New Federal Circuit Guidance Regarding Patent and Latent Ambiguities

Stephanie M. Harden, Patrick F. Collins, and Ustina M. Ibrahim*

Stephanie Harden's Headshot Photo

Ambiguities in a solicitation or contract have long been one of the greatest traps for unwary contractors. At the solicitation phase, a failure to identify a “patent” (i.e., obvious) ambiguity often results in the contractor losing the competition with no viable bid protest challenge. This is because such ambiguities are construed in the agency’s favor. A contractor seeking to recover added costs based upon an ambiguous contract term will be unable to recover such costs if the ambiguity is “patent” and the Government disagrees with the contractor’s interpretation.

Traditional Test for Patent vs. Latent Ambiguities

So how does one distinguish between “patent” and “latent” ambiguities? Numerous Federal Circuit authorities tell us that a patent ambiguity arises where there is “an obvious omission, inconsistency or discrepancy of significance” that “could have been discovered by reasonable and customary care.” E.g., Per Aarsleff A/S v. United States, 829 F.3d 1303, 1312-13 (Fed. Cir. 2016) (internal quotations omitted). By contrast, a latent ambiguity is a “hidden or concealed defect which is not apparent on the face of the document, could not be discovered by reasonable and customary care, and is not so patent and glaring as to impose an affirmative duty on plaintiff to seek clarification.” Id. (internal quotations omitted).

Continue reading “New Federal Circuit Guidance Regarding Patent and Latent Ambiguities”

60-Second Sustains: Eccalon, LLC

Elizabeth N. Jochum

Eccalon, LLC
B-420297; .2

  • GAO sustained the protester’s challenge where the Defense Department considered a factor that was not reasonably encompassed within the evaluation criteria.
  • The RFQ provided that the agency would evaluate technical approach to determine the extent to which the approach demonstrated understanding of the requirements, feasible methods to accomplish required tasks, and reliable methods for ensuring quality deliverables.
  • In comparing the protester and awardee’s quotations, though, the agency found that the protester’s approach was only “somewhat superior” because it relied on “experience and not necessarily innovation.”
  • GAO found this conclusion inconsistent with the RFQ’s evaluation criteria, which did not put offerors on notice that their approach would be devalued if rooted in experience rather than innovation.
  • GAO found no clear nexus between the identified evaluation criteria and the agency’s consideration of experience and innovation and sustained the protest accordingly.

Report on the State of Competition within the Defense Industrial Base

Brian S. Gocial, Sara N. Gerber, and Tjasse L. Fritz

As the federal government prepares to roll out infrastructure grants and contracts in amounts not seen since the New Deal and the defense industrial base (“DIB”) gears up to support billions in new spending to support Ukraine, a new Department of Defense (“DoD”) report raises serious concerns about the state of competition within the DIB. The report recently released by the Office of the Under Secretary of Defense for Acquisition and Sustainment analyzes the state of competition within the DIB and concluded that it can be summarized in one word: poor. The report discusses the causes for the lack of competition and makes recommendations for improving the solicitation process to increase competition, inspire innovation, reduce prices, and improve quality.

Consolidation

Foremost among the causes for the lack of competition identified by the report is consolidation of the DIB. Of 51 aerospace and defense prime contractors in the 1990s only five exist today. Although the report failed to find significant correlation between this consolidation and increased pricing, the consolidation raises additional concerns for DoD, such as national security, mission risk, and strategic technology innovation. The report notes that “having only a single source or a small number of sources for a defense need can pose mission risk and, particularly in cases where the existing dominant supplier or suppliers are influenced by an adversary nation, pose significant national security risks.” The report recommends that when a merger is likely to harm one of these interests, DoD work closely with the Federal Trade Commission and Department of Justice to take structural or behavioral measures deemed necessary, up to and including blocking the merger.

Continue reading “Report on the State of Competition within the Defense Industrial Base”

Blank Rome Welcomes New Government Contracts Associate in Washington, D.C.

Blank Rome LLP is pleased to announce that Amanda C. DeLaPerriere has joined the firm’s Washington, D.C., office in the Government Contracts group, which recently welcomed partner Elizabeth Jochum and associate Samarth Barot.

Amanda joins Blank Rome from Smith Pachter McWhorter PLC. She focuses her practice on government contracts law, related construction law, and white collar matters, including advising clients on regulatory, counseling, and litigation matters. Amanda also brings notable experience representing contractors in accounting, cost, and pricing matters.

Admitted to practice in Virginia, Amanda received her J.D. from The George Washington University Law School, and her B.A. from the University of Georgia. During law school, Amanda served as a law clerk at the U.S. Civilian Board of Contract Appeals and as a legal intern at the U.S. Department of Health & Human Services. Amanda also served as a notes editor at the Public Contracts Law Journal.