On May 28, 2015, the Obama Administration published the highly-anticipated Proposed Rule and Proposed Guidance implementing the “Fair Pay and Safe Workplaces” Executive Order, (E.O.) which President Obama issued on July 31, 2014. The proposed rule adds a new subpart to the Federal Acquisition Regulations (FAR) – subpart 22.20 “Fair Pay and Safe Workplaces” – which “incorporate[s]” proposed guidance issued by the Department of Labor (DOL) titled “Guidance for Executive Order 13673, ‘Fair Pay and Safe Workplaces.’ ” (“Proposed Guidance”). These regulations will not take effect until the final rule and final guidance are issued, but the proposed rule and guidance trigger a 60-day period to comment on the proposed rule and guidance, and offer insight into the onerous compliance and reporting burdens that contractors and subcontractors will face under the Proposed Rule. Below is a summary of several key provisions.
Earlier this year, Crowell & Moring assembled an interdisciplinary team of attorneys to begin reporting on legal developments regarding whistleblowers. The result is the Whistleblower Watch blog (whistleblowerwatch.com), on which more than 15 contributing authors post about everything from the False Claims Act to Sarbanes-Oxley to the SEC. They monitor legislation and case law at the federal and state levels, and keep tabs on agency actions that affect whistleblowers and their employers.
We hope you will find Whistleblower Watch a valuable resource as you navigate the complex areas of whistleblower law. You can also follow the blog’s updates on Twitter: @CMWhistleblower.
Congress v. White House – who will win the fight? As they duke it out on policies and legislation that will impact government contractors, our legal team will help you identify vulnerabilities as well as possible opportunities. We will cover a variety of topics, including:
- The New Fair Pay and Safe Workplaces Executive Order
- Developments and trends for contractor claims and terminations
- The changing landscape of internal investigations
- Protecting your intellectual property
- Cybersecurity risk management
- And so much more!
Our keynote speaker will be Professor Steven Schooner who will discuss “ A Decade of Ethics Scandals.”
Federal agencies (and their government contractors) are about to embark on a second generation of sustainability upgrades to federal government facilities, procurement and operations. On March 19, 2015, President Obama released an executive order titled “Planning for Federal Sustainability in the Next Decade” (“EO”). The EO establishes next generation greenhouse gas (GHG) reduction and sustainability targets and mandates that agencies develop plans to deploy clean energy and resource efficiency measures to improve resilience and environmental performance throughout their supply chains. The EO mandates the establishment of a new Chief Sustainability Officer for each agency charged with overseeing implementation and compliance with EO. The 7 largest federal procuring agencies will also be required to submit a plan to implement at least five new procurements each year that will include requirements considering government contractor GHG profiles and management practices.
Climate Risk Management. Within 90 days of the EO (approximately June 16th), the head of each federal agency must propose agency-wide, 2025 GHG emission reduction plans for scope 1 (direct greenhouse gas emissions from sources owned controlled by the agency), scope 2 (direct greenhouse gas emissions resulting from the generation of electricity, heat, or steam purchased by the agency) and scope 3 (greenhouse gas emissions from sources not owned by the agency but related to agency activities, including vendor supply chains). The targets will not include emissions from certain vehicles and equipment, and electric energy generation produced and sold commercially to other parties as the primary business of the agency. Continue Reading
On April 8, Crowell & Moring lawyers will present “The World of Sponsored Claims – Being Caught in the Middle,” at a forum hosted by the Association of Corporate Counsel of the National Capital Region. This forum will be of interest to prime contractors and subcontractors alike, and will focus on some of the key considerations that companies face with respect to litigating a sponsored claim. Join us for a lively discussion, CLE credit, and a refresher on the jurisdictional and practical elements of a sponsored claim from the prime and subcontractor perspective.
ACC members and other in-house counsel can click here to register for the webcast or to attend in-person. Clients of Crowell & Moring who are interested in attending, please contact Dean Mosones at firstname.lastname@example.org for complimentary registration.
The General Services Administration (“GSA”) is rolling out two modifications to its Contractor Assistance Visits (“CAVs”), in-person or virtual meetings between GSA’s Industrial Operations Analysts (“IOAs”) and GSA Schedule holders to assess compliance, identify potential problems, and test the contractor’s system controls and processes. Tom Brady, the Director of the Supplier Management Division, GSA Office of Acquisition Management, presented on these changes during The Coalition for Government Procurement’s webinar on March 12, 2015.
First, GSA will no longer grade contractors on report cards. GSA’s current practice is to issue a MAS Administrative Report Card following each CAV. This grade was supposed to reflect how well a contractor was complying with its contract’s terms and conditions. But contractors had expressed concern that some interpreted the grade more generally to contract performance. In response to this concern, GSA will discontinue grading its contractors on report cards (and relatedly, commits to providing contractors feedback from the CAV more expeditiously). Continue Reading
On March 5, OMB and DoL circulated a Memorandum to federal agencies regarding the “Fair Pay and Safe Workplaces” Executive Order (previously discussed here, and here), providing “guidance” with respect to the Labor Compliance Advisor role created by the EO, and directing agencies to designate within 90 days a senior-level official to serve as LCA. The memo, which reiterates the troubling scope and nature of the new position (i.e., “providing assistance to contracting officers” during the procurement process, “advising … contracting officers and other agency officials regarding recommended actions to be taken in response to labor law violations,” and “sending any relevant information to suspending and debarring officials”), also states that GSA will create a new web site for the labor compliance reporting requirements identified in the EO, and indicates that FAR Council regulatory action and additional DoL guidance will be forthcoming.
In EM Logging v. Department of Agriculture, 2014-1227 (Feb. 20, 2015), the Federal Circuit reversed the Civilian Board of Contract Appeals, holding that substantial evidence did not support the Board’s conclusion that the US Forest Service had properly terminated a timber sale contract for the Kootenai National Forest in Northern Montana for “flagrant disregard” of the terms of the contract. On appeal, the court found that the record supported only four instances of route deviation, load limit violations, or delayed notifications, and held that the contractor’s actions did not justify termination because termination for “flagrant disregard” must be “predicated on more than technical breaches of minor contract provisions or isolated breaches of material contract provisions which caused no damage.”
On January 7, 2015, DCAA issued guidance to auditors for determining whether certain costs are “expressly unallowable” – and therefore subject to penalties – even when the regulations “do not state in direct terms that the cost is unallowable.” This guidance, which is intended to “enhance” the equally troubling December 18 guidance to similar effect, is inconsistent with the CAS 405 definition of “expressly unallowable cost” (i.e., “a particular item or type of cost which, under the express provisions of an applicable law, regulation, or contract, is specifically named and stated to be unallowable“) and will likely lead to confusion in the audit process and undoubtedly result in DCAA auditors assessing more penalties against contractors on dubious grounds.
On February 12, 2015, the Federal Circuit issued an opinion in K-CON Building Systems, Inc. v. United States, addressing jurisdiction over contractor claims under the Contract Disputes Act (“CDA”).
Specifically, K-CON Building Systems explores the implications of claim identification, and whether a contractor can add a new claim to a pending matter when the new claim seeks a different remedy or is based upon a different legal theory. In this case, K-CON Building Systems, Inc. (“K-CON”) contracted with the federal government to construct a “cutter support team building” for the U.S. Coast Guard. The contract included a liquidated damages clause and obligated K-CON to pay $589 for each day of delay. When K-CON completed the building 186 days after the contract’s completion date, the Coast Guard withheld $109,554 in liquidated damages due to alleged delay. Continue Reading