Author: Blank Rome LLP

Three Major Features of the New Final Rule on Suspension and Debarment

Dominique L. Casimir ●


Introduction

On January 3, 2025, the Federal Acquisition Regulatory Council (“FAR Council”) published a long-awaited final rule to update suspension and debarment procedures. 90 Fed. Reg. 507. The final rule takes effect January 17, 2025.

As a refresher, suspension and debarment are non-punitive administrative actions by which the federal government excludes non-responsible contractors from eligibility to receive new government contracts and other federal awards. Suspension is a temporary measure, often imposed pending the outcome of an investigation or legal proceedings, when immediate exclusion is necessary to protect the government’s interests. Debarment is a longer-term exclusion, typically lasting up to three years, imposed when, after due process, the Suspending and Debarring Official (“SDO”) finds the contractor non-responsible. Both actions aim to ensure that the government only engages with responsible and reliable contractors.

Suspension and debarment procedures are codified in two distinct regulatory regimes: the Federal Acquisition Regulation (“FAR”), codified in 48 CFR, applies to procurement transactions, which involve the federal government’s acquisition of goods and services; and the Nonprocurement Common Rule (“NCR”), found in 2 CFR part 180, which applies to transactions such as grants, cooperative agreements, and other forms of federal assistance. While both regulatory frameworks aim to protect the government’s interests by excluding unreliable contractors, they differ in their specific procedures and immediate effects.

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Fiscal Year 2024 GAO Protest Statistics: Course Correction from Fiscal Year 2023 Shows Continued Slow Decline in GAO Protests

Luke W. Meier and Shane M. Hannon ●

The Government Accountability Office (“GAO”) released its Annual Report to Congress for Fiscal Year 2024 (B-158766), summarizing bid protest activity during the 2024 fiscal year. The FY24 bid protest statistics reflect a continuation of recent trends, and course correction after the FY23 statistics were skewed by the 100+ protests challenging the Department of Health and Human Services’ government-wide acquisition contract, the Chief Information Officer-Solutions and Partners 4 (“CIO-SP4”).

Overall, the number of protests is fairly steady, the effectiveness rate remains high (over 50 percent), and hearings are increasingly rare (just one in the last year).

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Department of Defense Issues Final CMMC Rule

Michael Joseph Montalbano ●

On October 11, 2024, the Department of Defense (“DoD”) issued the first part of its final rule establishing the Cybersecurity Maturity Model Certification (“CMMC”) program. As expected, the final rule requires companies entrusted with national security information to implement cybersecurity standards at progressively advanced levels, (CMMC level 1, CMMC level 2, and CMMC level 3) depending on the type and sensitivity of the information. While the final rule largely tracks the proposed rule issued in December 2023, we outline below several notable updates DoD included in the final rule and their potential impacts on DoD contractors.

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Blank Rome Attorneys Appointed to American Bar Association’s Public Contract Law Section Leadership for the 2024–2025 Term

Blank Rome LLP is pleased to announce that eight attorneys from the firm’s nationally recognized Government Contracts group have been appointed to leadership roles in the American Bar Association’s Public Contract Law Section for the 2024–2025 term.

Visit our website to learn more about their roles and the Section of Public Contract Law.

BIS Issues New Export Controls Targeting GAAFET, Quantum, and Additive Manufacturing, and Ushers in New Age of Plurilateral Export Controls: 5 Key Takeaways

Anthony Rapa, Alan G. Kashdan, and Brendan S. Saslow ●

The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) recently issued an interim final rule (“IFR”) under the Export Administration Regulations (“EAR”) imposing licensing requirements for exports to all destinations worldwide of certain gate all-around field effect transistor (“GAAFET”) technology, quantum computing items, advanced semiconductor manufacturing equipment (“SME”), additive manufacturing equipment, and aerospace coating systems technology.

The new measures are notable not only for their restrictive application to all destinations in the world—an unusual type of control under the EAR—but also for their institution of a new license exception, “Implemented Export Controls” (“IEC”), that allows for exports of the newly controlled items to specified “like-minded” countries that have instituted comparable export controls that are harmonized with U.S. controls.

The new controls are effective immediately as of September 6, 2024, with the exception of controls over certain quantum items, which take effect November 5, 2024, the cutoff date for public comment on the IFR.

Read the full client alert on our website.

Upcoming Blank Rome-Hosted ABA Public Contract Law Committee Meetings

Blank Rome is pleased to host two upcoming American Bar Association (“ABA”) Public Contract Law (“PCL”) Committee meetings in September.

Tuesday, September 17, 2024
12:00–1:15 p.m. EDT

Blank Rome’s Washington, DC office will host the annual ABA PCL Bid Protest Committee “Back to School” panel, with a virtual option. This will be followed by a Vice-Chair Planning Session from 1:15 to 2:00 p.m. Committee co-chair and Blank Rome Government Contracts partner Elizabeth N. Jochum will serve as a panelist, along with Samantha Lee (Deputy Assistant General Counsel, Government Accountability Office), Kayleigh Scalzo (Partner, Covington & Burling LLP), Andy Smith (Chief of Bid Protests, U.S. Army), and Evan Williams (Counsel, Mayer Brown LLP). Panelists will discuss important bid protest decisions and developments that you may have missed over the summer. For more information, and to register, please visit: Bid Protest Committee: Annual “Back to School” Panel.

Thursday, September 26, 2024
12:00–1:00 p.m. EDT

Blank Rome’s Washington, DC office will host a meeting of the ABA PCL Intellectual Property Committee, with a virtual option. Committee co-chair and Blank Rome Government Contracts attorney David Bodner will serve as panel moderator, and the panel will include Ted Jung (PEO IWS Chief Architect, Naval Sea Systems Command Headquarters), Rizlane Riahi (Deputy Section Head OGC, Naval Sea Systems Command Headquarters), and Chinedum Okparaeke (Legal Counsel, Anduril Industries). The panel will discuss the topic, “Consider This When Purchasing or Selling Software,” including pre-award data rights considerations when purchasing software as required by the 2023 changes to DFARS Subpart 227.72. For more information, and to register, please visit: Consider This When Purchasing or Selling Software.

60-Second Sustains: Sparksoft Corporation

Elizabeth N. Jochum ●

Sparksoft Corporation
B-422440;.2

  • The awardee’s Systems Security Officer (“SSO”) was awarded a positive finding for holding a certified information systems security professional (“CISSP”) certification. The protester alleged that their SSO held the same certification, as demonstrated in the proposal, but was not awarded an equal positive finding.
  • The agency admitted the unequal treatment was an evaluation error but argued Sparksoft was not prejudiced by the “oversight.” 
  • GAO disagreed, noting that the contemporaneous record showed that when the source selection authority (“SSA”) compared the awardee’s proposal to Sparksoft, the SSA highlighted the awardee’s SSO CISSP certificate as a discriminator between the two proposals.
  • When performing the best-value tradeoff, the SSA acknowledged the price differential between the two proposals was “significant” but concluded that “distinguishing positive features” in the awardee’s proposal justified this premium.
  • GAO found that it was not clear the SSA would have come to the same conclusion if not for the unequal treatment of the offerors’ SSOs.
  • Accordingly, GAO sustained the protest and recommended the agency reevaluate both offerors under the key personnel factor and perform a new best value tradeoff.

Blank Rome’s Government Contracts Practice and Attorneys Highly Ranked in Chambers USA and The Legal 500

We are thrilled to share Blank Rome’s Government Contracts practice was recently highly ranked by two prestigious annual legal rankings publications:

Chambers USA 2024

Blank Rome’s Government Contracts practice was ranked in Band 2 in Government Contracts: The Elite, USA in the Chambers USA 2024 rankings, placing our team among the very top group of fewer than 50 law firms in the nationwide rankings.

Chambers quoted a government contracts reference as saying that “Blank Rome is a sophisticated firm that knows the commercial implications of the activities for which they … provided legal support.”

To view all of Blank Rome’s Chambers USA 2024 rankings, please visit our website.

The Legal 500 United States 2024

Blank Rome was again highly ranked among the top nationwide firms as a “Recommended Firm” in the area of “Government Contracts” in The Legal 500 United States 2024. Testimonials about our practice included:

“The Blank Rome Government Contracts practice group is uncommonly business-oriented.”

“Great people, great communication, creative approaches to legal arguments.”

“Excellent communication, always available when you need them.”

To view all of Blank Rome’s Legal 500 United States 2024 rankings, please visit our website.

Open the Floodgates: Divided Federal Circuit Panel Expands Access to Court of Federal Claims

Shane M. Hannon and Scott Arnold ●

The Federal Circuit last Friday issued a decision that is, as the dissent put it, “a very important government contract case.” In Percipient.ai v. United States, the Federal Circuit adopted a narrow construction of the FASA task order bar, which prohibits the Court of Federal Claims (“COFC”) from hearing a protest challenging the issuance of a task order. At the same time, the Federal Circuit held that under certain circumstances—such as in this case—potential subcontractors can challenge an agency’s violation of procurement law at the COFC.

The Federal Circuit effectively kicked down the drawbridge to the COFC. It increased the variety of cases the COFC can hear and the classes of government contractors—particularly subcontractors—that can bring those cases. Percipient.ai will have significant ramifications on the government contracting community.

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60-Second Sustains: ITility, LLC

Elizabeth N. Jochum ●

ITility, LLC
B-421871.3

  • The protester argued that the Department of Homeland Security had unreasonably assessed the awardee a “positive” based on an incorrect understanding of what the awardee had proposed.
  • Specifically, the protester argued that, while the Agency assigned a positive for an element of the awardee’s proposal relating to enterprise risk management (“ERM”), the awardee’s proposal actually used ERM to refer to enterprise resource management.
  • According to the Government Accountability Office (“GAO”), the Agency did not substantively refute this allegation, so GAO sustained the protest.
  • GAO also agreed with the protester that the Agency unreasonably evaluated offers in two other respects:
    1. First, the Agency unreasonably found that both the protester and awardee met key personnel requirements, when the protester had offered personnel that met qualifications identified in the RFP as “preferred.”
    2. Second, the Agency found that the protester’s transition plan “met the requirements,” but failed to document any qualitative evaluation of the proposed plan, including the protester’s plan to have the contract fully staffed by Day 1 as the incumbent.
  • In both instances, GAO agreed that the Agency had ignored a potential discriminator in favor of the protester and sustained the protest grounds.