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.
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.
For years, the Government Accountability Office (“GAO”) has been moving towards an increasingly draconian position on offerors’ obligations to notify agencies when the availability of proposed personnel changes after proposal submission. A recent decision by the Court of Federal Claims (“COFC”) in Golden IT, LLC v. United States expressly addressing and departing from the GAO precedent may give hope to offerors struggling with GAO’s requirement.
Golden IT, LLC (“Golden”) protested the Department of Commerce’s award of a single blanket purchase agreement to Spatial Front, Inc. (“SFI”). Among its many protest grounds, Golden claimed that SFI’s quote contained a material misrepresentation regarding key personnel because it proposed an employee who had allegedly left SFI after it submitted its bid and before receiving award. Golden claimed that SFI was obligated to notify the agency of the individual’s unavailability after submitting its proposal.
On October 6, 2021, the U.S. Department of Justice (“DOJ”) announced a new Civil Cyber-Fraud Initiative to pursue cybersecurity fraud matters using the enforcement mechanisms of the False Claims Act (“FCA”).
This initiative follows DOJ’s four-month effort to review its cybersecurity strategy and reflects the government’s increased focus on contractor data security. Led by the Civil Division’s Commercial Litigation Branch, Fraud Section—i.e., the DOJ Section responsible for investigating and litigating FCA matters—the initiative targets government contractors and grant recipients that “put U.S. information or systems at risk” by “knowingly”:
providing deficient cybersecurity products or services;
misrepresenting the company’s cybersecurity practices or protocols; or
violating their obligations to monitor and report cybersecurity incidents and breaches.
We discuss the cybersecurity landscape preceding the new initiative, possible impacts and focus areas of the initiative, and how contractors should prepare for potential enforcement.
To read the full client alert, please visit our website.
The ABA Section of Public Contract Law serves to provide balanced recommendations on procurement policy, provide a forum to engage with colleagues across all segments of the procurement industry, and gain insight into and develop unique perspectives of federal, state, and local public contract law. For more information, please visit the Section’s webpage.
As directed in President Biden’s January 25, 2021, Executive Order we discussed six months ago, last week the FAR Council proposed increases to the Buy American Act (“BAA”) domestic content requirements, and previewed enhanced price preferences and reporting obligations for “critical” domestic products and components under the BAA.
The proposed rule, issued on July 30, 2021, contains three key elements: (1) Phased increases in domestic content thresholds from the current 55% to 75% by 2029, (2) enhanced price preferences for critical products and components, and (3) post-award reporting requirements for critical products and components.
A virtual public meeting to discuss the proposed rule will be held on August 26, 2021, and comments are due by September 28, 2021. The DAR Council also has an open DFARS Case relating to BAA provisions (2019-D045).
We provide an overview of the rule below along with practical takeaways for contractors to consider in light of these potentially significant changes.
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.
About two months have passed since the August 13, 2020, effective date of Part B of Section 889 of the FY 2019 National Defense Authorization Act. Part B, sometimes referred to as the Chinese telecommunications equipment ban, broadly prohibits the federal government from contracting with entities that use certain Chinese telecommunications (including video surveillance) equipment and services.
After the FAR Council published its July 10, 2020, Interim Rule, contractors, large and small, spent countless hours working to be able to certify compliance by August 13. This deadline was critical because the Interim Rule said that absent such a certification, a contractor was ineligible for future contract awards. That is, government agencies were prohibited from renewing or extending existing contracts with contractors unable to certify Part B compliance. Indeed, agencies were prohibited from issuing an order under an existing contract to a contractor that failed to certify compliance.
On September 29, 2020, the Department of Defense (“DoD”) issued a long-awaited, interim rule to strengthen cybersecurity protections throughout the Defense Industrial Base. The new rule establishes how DoD will assess contractors under current cybersecurity regulations set out by the National Institute of Standards and Technology Special Publication 800-171 (“NIST Requirements”) and the newly established Cybersecurity Maturity Model Certification (“CMMC”) program. The interim rule goes into effect on November 30, 2020; although, as we have discussed in earlier posts, DoD will gradually roll out the CMMC over the next five years.
NIST Self-Assessment Requirements
The first part of the new rule applies to contracts that incorporate DFARS 252.204-7012, which requires contractors and subcontractors that have access to covered defense information to comply with the NIST Requirements. Under the new rule, these entities will need to conduct a “Basic” self-assessment of their compliance with the NIST Requirements, and submit the results of that assessment to DoD through the Supplier Performance Risk System (“SPRS”). Contractors will need to update this self-assessment every three years or sooner if required by a contract. Starting November 30, 2020, contractors will not be eligible for new contracts (including task orders and delivery orders) or for options on existing contracts, unless the self-assessment score is posted on SPRS. DoD expects that it will take 30 days from submission to have the self-assessment score posted on SPRS, so it is important for contractors to submit their assessment at least 30 days prior to the November 30, 2020 implementation date. Continue reading “New Department of Defense Regulations Clarify Contractors’ Responsibilities to Comply with NIST SP 800-171 and CMMC Requirements”
We previously discussed key elements of the newly released interim rule (“the interim rule” or “the rule”) implementing Part B of Section 889 (“Part B”), which prohibits the federal government from contracting with entities that use certain Chinese telecommunications equipment. This post provides a more detailed analysis of the scope and application of the rule, as well as five compliance recommendations given the impending August 13th deadline.
Rule Applies to All Contracts Effective August 13, 2020
Part B applies to all solicitations, options, and modifications on or after August 13th, including contracts for commercial items, commercially available off-the-shelf (COTS) items, and contracts at or below both the micro-purchase and simplified acquisition thresholds. Like it did with respect to Part A, GSA intends to issue a Mass Modification requiring contractors to certify compliance with Part B. GSA has also released Q&As and FAQs to assist contractors with Part B implementation. The interim rule acknowledges that Part B will have a broad impact across contractors in a range of industries, including healthcare, education, automotive, aviation, and aerospace. The rule, however, does not apply to federal grant recipients (which are subject to a separate rulemaking). Continue reading “Part B Interim Rule Bans Contractors from Using Covered Technology Starting August 13th: 5 Steps for Meeting the Compliance Deadline”