Author: Blank Rome LLP

Buy American Act – More Big Changes Ahead

Scott Arnold

“Buy American” is one of few policy areas where the Biden and Trump administrations appear to generally agree. The Trump administration expressed support for strengthening regulatory implementation of the Buy American Act (“BAA”), and, in Executive Order 13881 (July 15, 2019), directed the Federal Acquisition Regulatory Council (“FAR Council”) to consider proposed regulations to increase and create new domestic content thresholds required for a product to qualify for domestic preference treatment. We wrote four months ago about the FAR Council’s proposed regulations to do just that, and to increase the price evaluation credit given to domestic products subject to the BAA. (See Proposed Rule Portends Increased Contractor BAA Obligations.) On January 19, 2021, the FAR Council published its final rule, largely adopting the proposed version.

Ironically, these changes were issued on the last full day of the Trump administration and went into effect January 21, 2021—the first full day of the Biden administration. And while there is no indication that the Biden administration believes the new BAA thresholds were bad ideas, President Biden wasted no time signaling his desire for further strengthening of the BAA as well as domestic content requirements in federal procurement and grant programs generally. President Biden’s Executive Order on Ensuring the Future Is Made in All of American by All of America’s Workers (“EO”) issued on January 25, 2021, makes this clear. Continue reading “Buy American Act – More Big Changes Ahead”

Biden Administration Prioritizing Federal Contractor Workforce Protections

Merle M. DeLancey Jr.

Protection of the workforce is a major focus of the Biden Administration. Rather than attempting to pass new legislation or amend existing statutes, the path of least resistance in the short term appears to be the use of executive orders to implement or, as here, rescind Trump Administration Executive Orders and put into effect many of the same policies as the Obama Administration. The starting point for the Biden Administration is to take the steps to implement rules with respect to the federal workforce and the workforce performing federal government contracts.

One of President Biden’s first actions in office was to direct federal government agencies to start the work to permit implementation of certain changes within the first 100 days of the administration through further executive action. These initiatives most likely will include an increased federal contractor minimum wage, requirements to offer employment to employees of an incumbent contractor, perhaps requiring contractors to disclose labor violations when seeking federal contracts, and increased Service Contract Act (“SCA”) enforcement.

      • President Biden’s Executive Order 14003 on Protecting the Federal Workforce issued on January 22, among other requirements, directed the Office of Management and Budget to make recommendations regarding establishing a $15 minimum wage for federal employees and federal contractors and subcontractors (the current federal contractor minimum wage is $10.95) and to provide employees with emergency paid leave.

      • President Biden’s Executive Order 13985 on Advancing Racial Equity and Support for Underserved Communities Through the Federal Government issued on January 20 revoked President Trump’s controversial Executive Order prohibiting certain types of workplace diversity trainings for federal government contractors.
Continue reading “Biden Administration Prioritizing Federal Contractor Workforce Protections”

GAO Report Suggests DOE Should Identify More Instances of Contractor Fraud

Luke W. Meier and Robyn N. Burrows

Last week, the Government Accountability Office (“GAO”) issued a report on Department of Energy (“DOE”) contracting, Improvements Needed to Ensure DOE Assesses Its Full Range of Contracting Fraud Risks. The thrust of the report is that DOE should do more to prevent and detect fraud, particularly in less-examined areas such as bid-rigging, misrepresentation of eligibility, kickbacks and gratuities, and conflicts of interest.

DOE relies on contractors to carry out its missions at laboratories and other facilities, spending approximately 80 percent of its $41 billion in total obligations on contracts. In March 2017, GAO reviewed DOE’s approach to managing its risk of fraud and found DOE did not use leading practices, resulting in missed opportunities to mitigate the likelihood and impact of fraud.

Continue reading “GAO Report Suggests DOE Should Identify More Instances of Contractor Fraud”

A Conversation with Our Newest Partner, Stephanie Harden

Justin A. Chiarodo, Dominique L. Casimir, and Stephanie M. Harden

Stephanie Harden's Headshot Photo

We are thrilled to share that Stephanie Harden—a long-time and integral member of our practice group—has been elected to the partnership. For those who haven’t had the chance to connect or work with Stephanie—which we highly recommend!—we wanted to share the highlights of our virtual chat with Stephanie (edited for the blog) to help everyone get to know her better.

First of all, congratulations on your promotion! This is obviously the culmination of many years practicing in the field—but how did you first get interested in government contracts law?

Thank you! I’m very excited about this milestone and helping our clients succeed in my new role.

I spent one of my law school summers at GAO’s Office of General Counsel, where I was first exposed to bid protest litigation. I loved the fast-paced nature of bid protests and was interested in learning more about the field. After law school, I clerked for Judge Victor Wolski on the U.S. Court of Federal Claims, where I learned about a host of government contracts issues and really solidified my interest in government contracts law. Being able to observe and learn from the Judge and the advocates practicing before the Court (both from the Justice Department and private bar) gave me a strong foundation for success.

What do you enjoy most about your practice area?

I love that every day brings new challenges and the opportunity to learn about something new. Whether it’s learning about a new technology or researching a novel legal question or a FAR clause you’ve never examined before, there is rarely a dull moment in this field. Continue reading “A Conversation with Our Newest Partner, Stephanie Harden”

Majority of FY 2020 Protests Find Some Success at GAO

Luke W. Meier and Scott Arnold

The Government Accountability Office (“GAO”) has released its Annual Report to Congress summarizing bid protest activity for Fiscal Year 2020 (GAO-21-281SP). The report shows that, in a unique year where COVID-19 altered procurement practices and priorities, protest activity at GAO was remarkably stable. Of note, GAO’s “effectiveness rate” this year topped 50 percent, meaning most protests resulted in some form of relief. The number of task order protests continues to increase, despite a modest dip in overall protests. Unsurprisingly, again there were very few hearings.

The chart below summarizes the GAO protest statistics from FY 2015 to FY 2020.

Here are four key takeaways from the latest report.

Continue reading “Majority of FY 2020 Protests Find Some Success at GAO”

Blank Rome’s Justin Chiarodo Named 2020 Client Service All-Star by BTI Consulting Group

Blank Rome Partner Justin A. Chiarodo has been named to the BTI Client Service All-Stars 2020, which recognizes leaders in superior client service identified exclusively by corporate counsel. The 2020 All-Stars were selected for their keen understanding of business impacts and unwavering commitment to client objectives, which BTI Consulting Group praises as “an astounding feat when also assessing a global pandemic alongside growing client expectations of law firms.” Justin notably joins the ranks of only three Government Contracts attorneys nationwide recognized in this year’s report.

Now in its 19th year of publication, BTI Client Service All-Stars 2020 features 475 individual attorneys from 181 law firms across the United States. The All-Stars designation, which is used by corporate counsel and law firms alike to identify the attorneys delivering the best client service, is a data-driven ranking based solely on in-depth telephone interviews with leading legal decision makers. To see the full list of 2020 All-Stars, please click here. 

At Blank Rome, Justin serves as co-chair of the Firm’s nationally recognized Government Contracts practice group. He focuses his practice on all aspects of federal, state, and local procurement law, and has spent his entire career helping leading and emerging government contractors successfully navigate high-stakes litigation, compliance, and regulatory matters. Earlier this year, Justin was named a Government Contracts MVP by Law360, and he is annually ranked for Government Contracts Law in Chambers USA, The Legal 500, and Super Lawyers.

 

What Could a DHHS Secretary Becerra Mean for the Pharmaceutical Industry?

Jay P. Lessler, John M. Clerici, and Merle M. DeLancey Jr.







President-elect Biden plans to nominate California Attorney General Xavier Becerra to serve as Secretary of the U.S. Department of Health and Human Services (“DHHS”). The current Administration has frustrated the pharmaceutical industry with numerous Executive Orders and proposed rules and regulations trying to impact drug pricing. DHHS’s interim final rule implementing a Most Favored Nations Model (i.e., an international pricing index) for reimbursement of certain Medicare Part B drugs is the most recent example.

Numerous pundits suggested that pharmaceutical companies manufacturing vaccines and other drugs to respond to the COVID-19 pandemic waited until after the November election to announce their progress. The rationale was that the companies would prefer working with a Biden Administration rather than suffer through four more years of acrimony with the Trump Administration. The Becerra announcement, however, could indicate the pharmaceutical industry is not yet out of the woods. Continue reading “What Could a DHHS Secretary Becerra Mean for the Pharmaceutical Industry?”

Blank Rome Represents Qbase LLC in Successful GAO Protest of DOJ Award Bid for IT Support Contract

A Blank Rome government contracts team obtained relief for Qbase LLC in a protest before the U.S. Government Accountability Office (“GAO”) involving the Department of Justice’s (“DOJ”) failure to award a $4.5 billion IT support contract to Qbase, a computer-related services and consulting provider.

The GAO concluded that the DOJ’s determination of which contract proposal provided the best value to the government was unreasonable because the DOJ failed to meaningfully consider the price of the proposals. Moreover, in its assessment of the proposals’ technical merit, instead of performing the required qualitative assessment of each offeror’s technical proposal, the DOJ unreasonably based its determination on a mechanical comparison of adjectival ratings (“very good,” “satisfactory”) between the offerors. In its decision, the GAO stated, “In sum, the agency’s best-value determination is unreasonable because the agency performed a mechanical tradeoff analysis that failed to meaningfully consider price and resulted in the exclusion of technically acceptable proposals from consideration for award.” The GAO sustained the protest, recommended that the DOJ conduct a new best-value analysis giving proper weight to pricing, and awarded Qbase its attorneys’ fees.

For more information, please read GAO Says DOJ Unfairly Assessed Bids On $4.5B IT Deal (Law360, November 20, 2020).

The Blank Rome team included Richard J. Conway, Adam Proujansky, and Michael J. Slattery.

Fifty Ways to Lose Your Federal Contract Award – Part 1: Failing to Secure Your Key Person Supply Chain

Albert B. Krachman

With apologies to Paul Simon, this is Part 1 of a series of articles on the many ways contractors can lose awards on federal contracts. These cautionary tales should inform anyone in a contractor organization with responsibility for authorizing, preparing, or negotiating competitive federal proposals.

Like a prize-winning recipe, the ingredients for losing an award are well known: one part carelessness, a pinch of greed, and some lack of attention to detail. Throw in a dash of procrastination, a late proposal revision, and then garnish it with an 11th-hour e-mailing of your proposal. Voila—you have cooked up a complete waste of proposal resources! 

We kick off this series with a story of an incumbent contractor who lost a billion-dollar follow-on contract by failing to contractually secure the services of a key person designated in the proposal.

Continue reading “Fifty Ways to Lose Your Federal Contract Award – Part 1: Failing to Secure Your Key Person Supply Chain”

What Qualifies as a “False” Claim? Supreme Court May Clarify

Luke W. Meier and Carolyn R. Cody-Jones

Until recently, it was well-accepted that a violation of the False Claims Act (“FCA”) occurs only when there is a misrepresentation that is objectively false. Four circuits—the Fourth, Seventh, Tenth and Eleventh—had adopted this “objective falsity” standard. In March 2020, however, the Third and Ninth Circuits issued decisions departing from this view, holding that objective falsity is not required and “legal falsity” can suffice. These decisions created a stark circuit split with profound implications for government contractors, and there is now a pending petition to the Supreme Court to address and clarify the matter.

First, a refresher: The FCA does not define “false or fraudulent,” leaving courts to look to common law to interpret what constitutes a “false” claim. Many circuits had found that a representation must be objectively false to qualify as a false claim, meaning that a false claim cannot arise where there is a genuine dispute and a claim is alleged to be false based on a subjective assessment. The Third Circuit was among those endorsing this view, holding that under the FCA “a statement is ‘false’ when it is objectively untrue,” United States ex rel. Thomas v. Siemens AG, 593 F. App’x 139, 143 (3d Cir. 2014), and that “expressions of opinion, scientific judgments or statements as to conclusions which reasonable minds may differ cannot be false.” United States ex rel. Hill v. Univ. of Med. & Dentistry of N.J., 448 F. App’x 314, 316 (3d Cir. 2011). Continue reading “What Qualifies as a “False” Claim? Supreme Court May Clarify”