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”
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.
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.
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. 
A recent federal court decision vacating a staggering 15-year debarment based on shortcomings in the administrative record offers a glimmer of hope to contractors facing exclusion from federal programs, and reinforces the importance that any final debarment decision be based on a fulsome record—particularly in “fact-based” debarments where there are disputed material facts. The big takeaway for contractors facing an exclusion is to ensure that the administrative record on which a debarment decision is based reflects all information showing why an exclusion is unwarranted (or unnecessary) to protect the Government.
For years, states and the federal government focused their drug pricing enforcement efforts on higher priced and more expensive branded drugs. Not surprisingly, private qui tam lawyers followed on the coattails of these government enforcement efforts. The focus on branded drugs was not wrongheaded. States, the federal government, and qui tam plaintiffs were handsomely rewarded for such efforts, as in the multiple Average Wholesale Price (“AWP”) cases against brand manufacturers. However, while regulators focused on brands, they subsequently found that the pricing for generic drugs had increased unimpeded. In more recent years, the focus has shifted to generic drug price increases. For example, effective for the first time at the start of 2017, the Medicaid Program applied an inflation penalty component to Medicaid rebate payments for generic drugs. Historically, the inflation penalty applied only to branded drugs. The inflation penalty provides that when a drug’s price increases faster than the increases in the Consumer Price Index for All Urban Consumers, a manufacturer is required to pay an additional Medicaid rebate amount to state Medicaid programs. 
The government continues to seek ways to rein in healthcare costs. Now it has set its sights on the Medicare Advantage Program. Medicare Advantage Plans, sometimes called “Part C” or “MA Plans,” are offered by private companies approved by Medicare. If you join a Medicare Advantage Plan, you still have Medicare, but you get your Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) coverage from the Medicare Advantage Plan and not original Medicare. Medicare Advantage Plans may also offer extra coverage like dental, vision, hearing, and wellness programs. 
On April 13, 2017, President Trump’s federal hiring freeze will be lifted—at least in part. The hiring freeze was instituted by a presidential memorandum signed on January 23, 2017, and prevents federal agencies from filling vacant federal government positions that existed at that time, or creating new positions. President Trump included certain exceptions, including military personnel and other positions deemed “necessary to meet national security or public safety responsibilities.” The memorandum requests that agencies use existing personnel efficiently and does not prohibit reallocation of resources for the highest priority concerns. 