How to Manage a Potential Whistleblower

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Dominique L. Casimir, Jennifer A. Short, and Michael Joseph Montalbano 

Jennifer A. Short headshot image

The federal False Claims Act (“FCA”) is one of the United States’ most effective tools to detect and prevent fraud against the Government. One reason the FCA is so effective is that it encourages the employees of an organization to come forward as claimants and receive a share of any financial recovery to the Government. Recognizing the central role of these whistleblowers in the FCA’s enforcement scheme, Congress included an anti-retaliation provision in the statute that protects them when they report suspected fraudulent conduct. Under the FCA’s anti-retaliation provision, employees, contractors, or agents can sue for damages on their own behalf if they are “discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done” in connection with a reported FCA violation. 31 U.S.C. § 3730(h)(1). Likewise, nearly every state also affords some degree of whistleblower protection, either statutorily or in the common law.

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Proposed Rule for PLA Will Substantially Shift Federal Construction Landscape

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Carolyn R. Cody-Jones and Luke W. Meier  ●

The FAR Council recently published a proposed rule mandating the use of project labor agreements (“PLAs”) on federal construction projects where the total estimated cost to the government is $35 million or more. See FAR Case 2022-003, 87 FR 51044 (Aug. 19, 2022). The proposed rule codifies President Biden’s February 4, 2022, Executive Order No. 14063. 87 FR 7363 (Feb. 9, 2022). Certain exceptions apply, and for projects below $35 million whether to mandate PLAs is left to the discretion of each federal agency. A PLA is a pre-hire collective bargaining agreement with one or more labor organizations that establishes the terms and conditions of employment for a specific construction project.

Why it’s significant: The proposal rule, and the underlying Executive Order, further enhance an Obama-era Executive Order that encouraged PLAs on federal construction projects over $25 million, but did not require it. 74 FR 6985 (Feb. 11, 2009). The new Executive Order puts forth the new rule to seek increased “economy and efficiency,” arguing that large-scale construction projects can create “special challenges” for efficient and timely procurement, and contractor labor disputes can cause significant project delays. During the Obama and Trump Administrations, construction industry trade groups sought revocation of the Obama Executive Order, arguing it increases taxpayer costs and filing pre-award bid protests against agencies implementing a PLA requirement, in order to have it removed. During the time that rule was in effect, between 2009 and 2021, the FAR Council estimated that a PLA was used only 12 times despite there being roughly 2,000 eligible contracts. The new Biden Executive Order and proposed rule firmly moves the industry requirements on federal projects in the opposite direction and establishes a clear federal prerogative for PLAs on large construction projects.

Effects on the industry: Once in effect, the proposed rule will cause a significant shift in the federal construction industry. Recent Bureau of Labor Statistics estimates show that only 12.6 percent of the construction work force belong to unions. This means a contractor may face staffing challenges arising from a restricted pool of potential candidates. The FAR Council notes in the proposed rule that the average number of construction awards valued at $35 million or more, from Fiscal Year 2019 through Fiscal Year 2021, was approximately 119 annually, with an average cost of $114 million per award.

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Federal Contractor Vaccine Mandate Still in Limbo

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Merle M. DeLancey Jr. and Samarth Barot 

Merle M. DeLancey Jr. headshot image
Samarth Barot headshot image

Since December 2021, after a Federal District Court for the Southern District of Georgia issued a nationwide injunction against the federal contractor vaccine mandate, compliance with the federal contractor vaccine mandate has been in limbo. Many hoped that, on appeal, the Eleventh Circuit would bring some clarity to vaccine requirements. Unfortunately, that is not the case. On August 26, 2022, the Eleventh Circuit agreed that a preliminary injunction was warranted, however the Court narrowed the applicability of the injunction. The court held that the injunction should only apply to the specific plaintiff-states and trade associations in the case, and should not “extend[] nationwide and without distinction to plaintiffs and non-parties alike.” Georgia v. President of the United States, No. 21-14269 (11th Cir. Aug. 26, 2022).

The Eleventh Circuit agreed with the lower court that a preliminary injunction was warranted, stating that while “Congress crafted the Procurement Act to promote economy and efficiency in federal contracting, the purpose statement does not authorize the President to supplement the statute with any administrative move that may advance that purpose.” Therefore, the Court held that “the President likely exceeded his authority under the Procurement Act when directing executive agencies to enforce” the vaccine mandate.

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

Brian S. Gocial and Stephanie M. Harden

Stephanie Harden's Headshot Photo

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”

Top 10 Trends and Compliance Obligations in the Evolving World of Commercial Item Procurement

Blank Rome Partner Justin A. Chiarodo will be a presenter at BDO’s Winter 2019 Marketplace Outlook Update for Government Contractors, “Top 10 Trends and Compliance Obligations in the Evolving World of Commercial Item Procurement.” This live webinar will take place Thursday, February 28, 2019, from 12:30 to 1:30 p.m. EST.

For more information, please visit our website.

Government Contractor Shutdown Advisory

Justin A. Chiarodo and Albert B. Krachman

With yet another government shutdown looming, contractors face a number of uncertainties and challenges that warrant close attention—regardless of whether a shutdown takes place or how long it lasts. Among other challenges, contractors may face a lack of incremental funding; the inability to enter into new contracts or contract modifications; closed government facilities; furloughed government employees; delayed payments; increased indirect costs; and unexercised and deferred contract options. Below we offer six suggestions to help address key areas impacted by a shutdown, including contract funding, internal and external communications, recordkeeping, and deadlines.

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