Category: Merle M. DeLancey Jr.

New Rules Affecting Veteran-Owned Small Businesses (Important to Large Businesses, Too)

Merle M. DeLancey Jr.

Effective October 1, 2018, verification of Veteran-Owned Small Businesses (“VOSBs”) and Service-Disabled Veteran-Owned Small Businesses (“SDVOSBs”) now rests with the Small Business Administration (“SBA”). (See, VA Veteran-Owned Small Business (VOSB) Verification Guidelines.) Previously, the SBA and the Department of Veterans Affairs (“VA”) had concurrent jurisdiction over VOSB/SDVOSB “ownership” and “control” determinations. This led to the confusing and inconsistent results. Now, the VA will no longer vet (pun intended) contractors to determine if they are eligible VOSBs or SDVOSBs. Exclusive authority to verify these businesses is now with the SBA. The new rule clarifies the VA verification process and makes VA and SBA regulations concerning VOSB and SDVOSB joint ventures consistent. The new rule stems from the Fiscal Year 2017 National Defense Authorization Act, Public Law 114-840, which called for the SBA and VA to eliminate inconsistent regulatory interpretations of “ownership” and “control” requirements for VOSBs and SDVOSBs. Continue reading “New Rules Affecting Veteran-Owned Small Businesses (Important to Large Businesses, Too)”

OFCCP Is Staying Busy—So Should Government Contractors

Merle M. DeLancey Jr.

In February, the Office of Federal Contract Compliance Programs (“OFCCP”) sent Corporate Scheduling Announcement Letters (“CSALs”) to 1,000 contractor establishments. Shortly thereafter, in March, OFCCP mailed follow-up compliance review scheduling letters (“Scheduling letters”). On September 7, 2018, OFCCP sent a second round of CSALs to an additional 750 contractor establishments.

Further, on September 19, 2018, OFCCP issued Directive 2018-08: Transparency in OFCCP Compliance Activities. The purpose of the Directive is to “ensure transparency in all stages of OFCCP compliance activities to help contractors comply with their obligations and know what to expect during a compliance evaluation, and to protect workers from discrimination through the consistent enforcement of OFCCP legal authorities.” The Directive identifies the “Roles and Responsibilities” of OFCCP and contractors during a compliance review and the “Policies and Procedures” that will be followed. Continue reading “OFCCP Is Staying Busy—So Should Government Contractors”

Trade Agreements Act Enforcement Loses a Couple More Teeth

Merle M. DeLancey Jr.

Two recent judicial decisions involving the Trade Agreements Act (“TAA”) build on a trend reflecting a more favorable enforcement climate for contractors grappling with domestic preference regimes. Earlier this year, the U.S. District Court for the District of Columbia dismissed a qui tam action that alleged fraud in connection with country of origin requirements imposed by the TAA. United States ex rel. Folliard v. Comstor Corp., 308 F.Supp.3d 56 (D.D.C. 2018) (finding the relator failed to adequately plead that the alleged TAA noncompliance was “material” to the Government’s payment decision). The decision marked a welcome early defeat of a False Claims Act case based on the enhanced materiality and scienter requirements of the Escobar decision (as we wrote about here).

Two recent federal court decisions appear to extend the trend of taking some of the bite out of TAA enforcement, and potential exposure for alleged noncompliance. Despite this welcome news, domestic preference programs remain a key legal obligation for government contractors (and an area likely to remain under scrutiny with the Administration’s professed focus on Buy American and Hire American initiatives). Continue reading “Trade Agreements Act Enforcement Loses a Couple More Teeth”

Drug Manufacturer Pricing Disclosures: Mid-Year 2018 Update

Merle M. DeLancey Jr.

Earlier this year, I commented on state drug pricing transparency laws in effect and/or enacted during 2017.[1] I also opined that it was likely more states would pass similar transparency laws requiring drug manufacturers to disclose pricing and/or price increases during 2018. While proposed drug pricing transparency and disclosure legislation has been introduced and is pending in numerous states, during the first half of 2018 only two states (Oregon and Connecticut) passed new laws imposing price disclosure requirements on drug manufacturers. Maine expanded its existing disclosure law. Also of note was the United States Court of Appeals for the Fourth Circuit finding Maryland’s Anti-Gouging law unconstitutional. Continue reading “Drug Manufacturer Pricing Disclosures: Mid-Year 2018 Update”

Department of Veterans Affairs Updates Pharmaceutical Federal Schedule Supply

Merle M. DeLancey Jr.

The Department of Veterans Affairs (“VA”) National Acquisition Center (“NAC”), which administers the VA Federal Supply Schedule (“FSS”) Program, has already had a busy year. Among other procurement streamlining activities, the NAC currently is in the process of refreshing all nine (9) of its FSS solicitations to incorporate the most recent regulations and provide updates and clarifications.

Last month, the NAC updated the open and continuous Solicitation for Pharmaceuticals—Schedule 65 I B Pharmaceuticals FSS contract. The NAC issued Mass Modification 0006 and Solicitation Refresh 8. The Modification and Refresh update and incorporate procurement regulations and update or clarify FSS Program policy changes since the last refresh in February 2014, as amended. Refresh 8 applies to all companies submitting FSS proposals (for new contracts and renewals) after June 21, 2018. The Mass Modification is a standard bilateral modification to existing FSS terms and conditions, which the NAC is requesting manufacturers sign and return by July 30, 2018. Continue reading “Department of Veterans Affairs Updates Pharmaceutical Federal Schedule Supply”

Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?

Merle M. DeLancey Jr.

Recently, the United States District Court for the District of Columbia dismissed a qui tam action involving allegations of fraud in connection with country of origin requirements imposed by the Trade Agreements Act (“TAA”). United States ex rel. Folliard v. Comstor Corp., 308 F.Supp.3d 56 (D.D.C. 2018).

Comstor involved a False Claims Act (“FCA”) action filed by a serial whistleblower who alleged two contractors violated the FCA by selling non-TAA compliant products on their General Services Administration (“GSA”) Federal Supply Schedule (“FSS”) contracts to federal government customers. Depending on the dollar value of the acquisition, most procurements are subject to either the Buy American Act (“BAA”) or TAA. Currently (2018), the BAA applies to supply procurements valued at or below $180,000. Accordingly, the TAA currently applies to such procurements valued in excess of $180,000. GSA has determined the TAA applies to FSS contracts. Continue reading “Trade Agreements Act Compliance: Some Welcome News for Some Federal Contractors, But Will It Last?”

New Medicaid Rebate Agreement

Merle M. DeLancey Jr.

On March 23, 2018, the Centers for Medicare & Medicaid Services (“CMS”) announced the introduction of a new Medicaid National Drug Rebate Agreement. The new Agreement incorporates legislative and regulatory changes, including, for example, the Affordable Care Act, which have occurred since the original Agreement was published in 1991.

Manufacturers currently participating in the Medicaid Program have until October 1, 2018, to sign the new Agreement. Failure to enter into a new Agreement by October 1, will result in termination of a manufacturer’s existing Agreement.

While the new Agreement does not contain significant changes from the existing Agreement, several changes are worth noting and repeating: Continue reading “New Medicaid Rebate Agreement”

Do Federal Supply Schedule Contracts Still Have Value?

Merle M. DeLancey Jr.

Over the past several months, there has been a confluence of congressional and agency actions that will have a significant impact on Federal Supply Schedule (“FSS”) contract holders. These changes are so significant that they will likely cause companies with FSS contracts to question whether having an FSS makes sense. These changes could also cause companies to restructure the segments of their companies that are responsible for selling to the federal government.

Order Level Materials

In late January 2018, the General Services Administration (“GSA”) issued its Order Level Materials (“OLM”) final rule. This rule allows agencies to purchase supplies or services in direct support of a task or delivery order placed against FSS contract or Blanket Purchase Agreement (“BPA”). OLMs are subject to special ordering procedures. See GSAR 552.238-82. For example, the OLMs cannot have been known when an FSS contract or BPA was awarded. OLMs (excluding travel) cannot exceed 33.33 percent of the total value of the applicable task or delivery order. Whether an FSS holder is required to obtain competitive quotes for an OLM order depends upon the value of the order and the FSS holder’s purchasing system. Continue reading “Do Federal Supply Schedule Contracts Still Have Value?”

The Government’s Use of Data Analytics to Identify Healthcare Fraud

Merle M. DeLancey Jr.

No one knows exactly how much fraudulent conduct costs the United States healthcare system. Some suggest it may cost Medicare, Medicaid, and private insurers $100 billion each year. Regardless of the exact amount, everyone agrees that the fraudulent activities result in more expensive healthcare and possibly the deprivation of healthcare for some.

The Department of Justice (“DOJ”) and agency inspectors general have recovered billions of dollars based upon demonstrated or alleged healthcare fraud. These cases and investigations, however, have generally been limited to a specific company or class of providers. Government investigators have struggled for years with how to identify fraudulent practices in government healthcare programs involving large volumes of claims. Continue reading “The Government’s Use of Data Analytics to Identify Healthcare Fraud”

Buy American, Hire American: Will It Impact a Government Contractor’s Ability to Store Data Offshore?

Merle M. DeLancey Jr. and Lyndsay A. Gorton

Buy American and hire American. The concept is easy, but the implementation can be far more complicated, particularly in the current government contracting world where waivers to those requirements have become common. In an attempt to strengthen the commitment to buying American and hiring American, on January 26, 2018, a bipartisan group of ten Senators sent a letter to President Trump urging him to “keep the promises” that he had made in April 2017 to buy American and hire American. The letter follows Senators Rob Portman (R-OH), Sherrod Brown (D-OH), Lindsey Graham (R-SC), and Chris Murphy’s (D-CT) introduction of the bipartisan BuyAmerican.gov Act of 2018 on January 9, 2018. This new legislation seems to be an effort to codify President Trump’s April 18, 2017, Buy American and Hire American Executive Order (the Executive Order), and slow what the BuyAmerican.gov Act Press Release calls the “excessive number of waivers” to the Buy American laws. Since President Trump signed the Executive Order, much has been written about the potential effects of that Executive Order. However, the potential impacts on government contractors who maintain or store data relating to their performance of federal government contracts have been largely disregarded. Continue reading “Buy American, Hire American: Will It Impact a Government Contractor’s Ability to Store Data Offshore?”

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