Examining and Dispelling Common Misconceptions about Suspension and Debarment

Dominique L. Casimir

Contractors are well aware that being suspended or debarred renders them ineligible for federal contracts and subcontracts. Many contractors may believe that suspension and debarment are not realistic risks for them if they already have a robust ethics and compliance program or strong internal controls. Nevertheless, the risk of suspension and debarment can crop up suddenly and unexpectedly, such as when misconduct has been concealed or errors have gone undetected. For this reason, contractors should have a baseline understanding about what to do if they must engage with a Suspending and Debarring Official (“SDO”). This post explores ten common misconceptions about suspension and debarment, with the aim of helping contractors understand the landscape and respond effectively.

Common Misconception #1: We have already settled with another agency and paid a fine, so we will not be suspended or debarred. Continue reading “Examining and Dispelling Common Misconceptions about Suspension and Debarment”

5 Tips for Complying with New Section 889 Supply Chain Regulations

Justin A. Chiarodo and Robyn N. Burrows

As part of a recent wave of supply chain requirements, Section 889 of the 2019 National Defense Authorization Act (“NDAA”) imposed major new limitations on the use of certain Chinese telecommunications products and services in federal procurement, and recent implementing regulations mandate a range of compliance actions relating to the ban. This blog post provides practical guidance on the new rules and five compliance tips.

Ban against Procuring “Covered Telecommunications Equipment or Services”

The Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) recently released an interim rule implementing the first part of Section 889. This ban, which became effective August 13, 2019, sweeps broadly by prohibiting agencies from procuring the following “covered telecommunications equipment or services”:

  1. Telecommunications equipment produced by Huawei and ZTE Corporation;
  2. Video surveillance and telecommunications equipment used for public safety, surveillance of “critical infrastructure,” or national security purposes and produced by Hytera Communications Corporation, Hangzhou Hikvision Digital Technology Company, or Dahua Technology Company;
  3. Telecommunications or video surveillance services provided by such entities for any purpose; or
  4. Telecommunications or video surveillance equipment produced or provided by an entity that the Secretary of Defense determines is owned or controlled by, or otherwise connected to, the government of the People’s Republic of China.

The ban includes all affiliates and subsidiaries of the listed companies. Continue reading “5 Tips for Complying with New Section 889 Supply Chain Regulations”

The Supreme Court Expands the Meaning of “Confidential” Information under FOIA Exemption 4

Robyn N. Burrows

The Supreme Court in Food Marketing Institute v. Argus Leader Media, No. 18-481 (U.S. June 24, 2019) recently relaxed the standard for withholding confidential information under Exemption 4 of the Freedom of Information Act (“FOIA”)—a major win for contractors that regularly submit sensitive business information to the government.

Exemption 4 protects from disclosure trade secrets and commercial or financial information that is privileged or confidential. For the past 45 years, courts have been guided by the stringent “competitive harm” test first enunciated in National Parks & Conservation Association v. Morton, 498 F.2d 765 (D.C. Cir. 1974). This test allowed an agency to withhold information as “confidential” only if disclosure would (1) impair the government’s ability to obtain necessary information in the future, or (2) cause substantial harm to the competitive position of the person from whom the information was obtained. Many businesses objected to this test as overly burdensome and causing confusion about the showing required to establish substantial competitive harm. Continue reading “The Supreme Court Expands the Meaning of “Confidential” Information under FOIA Exemption 4”

What Contractors Should Know about DOJ’s Revised Guidance on Evaluations of Corporate Compliance

Brian S. Gocial and Stephanie M. Harden

As government contractors know well, a robust compliance program can be critical—both in preventing, detecting, and resolving compliance problems and in working with agencies and/or the Department of Justice (“DOJ”) to resolve compliance issues when they arise. Though DOJ has previously issued guidance on how it evaluates corporate compliance programs, on April 30, 2019, it greatly expanded upon its earlier guidance with a lengthy new guidance document. The document is notable for its emphasis not just on the design of compliance programs, but also on their effectiveness in practice. The document is a useful benchmark for contractors to evaluate their compliance programs, as well as to demonstrate their affirmative responsibility to agencies when facing agency-level investigations.

The guidance document focuses on three central questions:

  1. Is the corporation’s compliance program well designed?
  2. Is the corporation’s compliance program implemented effectively?
  3. Does the compliance program actually work in practice?

The following outline provides a summary of the various factors DOJ discusses in connection with each of these questions—and more information on each topic can be found here.

Contractors should assess how their own compliance programs measure up against these factors: Continue reading “What Contractors Should Know about DOJ’s Revised Guidance on Evaluations of Corporate Compliance”

Spring Cleaning for Government Contractors? Think Compliance.

Merle M. DeLancey Jr.

If you’re like me, it’s the time of year when you clean out your garage and closets and do all those outside projects you delayed until the weather warmed up. If you are a government contractor, you should consider this to be the season to do some spring cleaning in terms of your government contract compliance programs and procedures. Not to be an alarmist, but there are numerous areas you can review now and, if you should find some compliance deficiencies, you still have ample time to get your house in order before an agency audit or the deadline for submission of certain government reports.

Set forth below is a list of areas you may want to clean up: Continue reading “Spring Cleaning for Government Contractors? Think Compliance.”

OFCCP Releases FY 2019 CSAL

Merle M. DeLancey Jr.

On March 25, 2019, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a Corporate Scheduling Announcement List (“CSAL”) for FY 2019. As it announced in February, OFCCP changed how it notifies government prime contractors and subcontractors that they may be subject to a compliance review. Rather than sending the traditional advanced notification letters, OFCCP posted the FY 2019 CSAL on its website. In addition to the CSAL, OFCCP also posted its Scheduling Methodology, CSAL Frequently Asked Questions (“FAQs”), Corporate Management Compliance Evaluation (“CMCE”) FAQs, and a link to its Section 503 Focused Review page.

OFCCP significantly increased the number of contractors potentially subject to review to more than 3,500. OFCCP’s CSALs for FY 2018 and 2017 identified 1,003 and 802 contractors, respectively. Continue reading “OFCCP Releases FY 2019 CSAL”

Renewed Focus on Contractor Business System Reviews

Sara N. Gerber

According to a recent U.S. Government Accountability Office (“GAO”) report, the Defense Contract Audit Agency (“DCAA”) and the Defense Contract Management Agency (“DCMA”) have taken certain steps to improve the contractor business system (“CBS”) review process and are forecasting that CBS reviews will increase significantly over the next four years. Contractor business systems include a contractor’s accounting, earned value management, estimating, purchasing, material management, and property management systems. These systems require contractors to maintain internal controls that, as GAO noted, “act as the first line of defense against fraud, waste and abuse of federal funding.” Given their importance, the renewed focus on ensuring CBS reviews are conducted in a timely and consistent manner is not surprising, and contractors should prepare for a new wave of audit activity. Continue reading “Renewed Focus on Contractor Business System Reviews”