Government Contracts Legal Forum

DoD and NASA Propose New Rule for Uniform Line Item Identification Structure in Gov’t Contracts – Comment Period Ends October 6th

Posted in Legal Developments
Edward Goetz

DoD, NASA, and the GSA have proposed a new rule that would change the federal acquisition regulation to establish a uniform line item structure for the Federal procurement system.  The rationale for the change is that a uniform line item identification structure would improve the accuracy, traceability, and usability of procurement data.  It is also part of the effort to implement the objectives of the Federal Funding Accountability and Transparency Act of 2006, including promoting achievement of rigorous accountability of procurement dollars and processes.

The new rule would apply to solicitations, government-wide acquisition contracts, multi-agency contracts, purchase orders, agreements involving pre-priced supplies or services, and delivery orders.  If approved, the change would become effective in FY 2016. Continue Reading

“Fair Pay and Safe Workplaces Executive Order” Increases Focus on Contractor Compliance With Labor Laws

Posted in Legal Developments
Steve McBrady

On July 31, 2014, the Obama Administration issued a new Executive Order targeting contractor compliance with Federal labor laws.  The order, dubbed the “Fair Pay and Safe Workplaces Executive Order,” creates several new obligations for contractors and subcontractors doing business with the Federal government.  In the coming months, the FAR Council and several other agencies will be preparing and issuing guidance and regulations to implement the substantive provisions of the Executive Order, which are summarized below.

Prior to Award.  Contractors bidding on procurement contracts in excess of $500,000 will be required to “represent, to the best of the [their] knowledge and belief, whether there has been any administrative merits determination, arbitral award or decision, or civil judgment” rendered against the contractor within the preceding 3-year period for violations of a slew of labor laws (including the FLSA, Service Contract Act, Davis-Bacon, ADA, ADEA, FMLA, NLRA, OSHA, Title VII of the Civil Rights Act and others, as well as equivalent State laws).  This information will be factored into the Contracting Officer’s (“CO’s”) responsibility determination (i.e., “whether an offeror is a responsible source that has a satisfactory record of integrity and business ethics”).  In addition, the Executive Order will require contractors to disclose similar information for subcontractors on subcontracts (other than commercially available off-the-shelf items) valued over $500,000, and will require contractors to include provisions in their subcontracts requiring subcontractors to disclose and update such information. Continue Reading

New Rule Seeks to Limit Allowability of Whistleblower-related Costs

Posted in Legal Developments
Steve McBrady

On July 25, DoD, GSA and NASA issued a final rule implementing a section of the FY 2013 NDAA addressing the allowability of legal costs incurred by a contractor or subcontractor related to whistleblower proceedings. The new rule, which amends the cost principle at FAR 31.205-47 to make costs incurred in connection with any proceeding brought by contractor or subcontractor employees submitting a whistleblower complaint under 41 U.S.C. 4712 or 10 U.S.C. 2409 unallowable if the contractor is found liable for fraud or similar misconduct in the whistleblower proceeding, modifies the proposed rule published on September 30, 2013. Specifically, the final rule adds adding language to FAR 31.205-47(c) to provide for the same treatment of costs for settled whistleblower complaints as is currently provided for settlement of proceedings brought by a third party under the False Claims Act in which the United States does not intervene intervene (i.e., legal defense costs may be allowable if the government determines that there was very little likelihood that the whistleblower would have been successful on the merits). Continue Reading

Join Us for a Legal and Accounting Webinar

Posted in Cost Accounting
J. Catherine Kunz

On Wednesday, July 23rd from 11:30 am -1:30 pm, Cathy Kunz will join Rubino & Company to discuss critical issues in cost law. As contractors face more scrutiny and review of their cost and accounting practices, we will address recent cost-related court decisions and legal changes including the new caps on executive compensation, application of statute of limitations in government audits and cost claims, recent DCAA audit policies and practices, and important court interpretations of the Cost Accounting Standards and cost principles. The webinar is free, but registration is required – click here.

Join Us for a False Claims Act Webinar

Posted in False Claims
Robert Rhoad

On Tuesday, July 1st from 1-2 pm, Bob Rhoad will join Bates White as moderator on a panel entitled “False Claims Act: Seeking Clarity on Damages and Penalties.” The discussion will center around the more prominent issues where the measurement of FCA damages and penalties remains a matter of close scrutiny, including:

  • The landscape of government loss under the FCA: what types of loss does the FCA redress?
  • When does the government’s loss equal the full value of the government’s payments? When should value received off-set that loss?
  • Are there meaningful constitutional limits to FCA penalties when there is minimal or no FCA loss? Will the Supreme Court weigh in next term on this critical issue?
  • Is the current state of the law on FCA damages and penalties consistent with the FCA’s policy objectives?

To register for this free webinar, click here.

Join us for an U.S.-Israel Business Networking and Discussion

Posted in Legal Developments
Peter J. Eyre

On Thursday, May 29 from 6:00-9:00 pm, Crowell & Moring is hosting an Israel-related program for US companies to join industry-leading individuals from US and Israeli companies. The discussion will feature three sectors, specifically defense technology, life sciences, and TMT, and you will hear their perspectives on opportunities and challenges for and with Israel-based companies. The program will highlight Israel-based emerging companies as sources for R&D and sub-contracting relationships. This event is for lawyers, executives and investors affiliated with Israel-based businesses, as well as those exploring relationships with Israeli businesses. The event is free – please click here for more information and registration.

New York Sets Six-Percent Contracting Goal for Veteran-Owned Small Businesses

Posted in Small Business
Mary Gilbert

New York became the first state in the nation to establish a six-percent goal for participation in state contracts for service-disabled veteran-owned small businesses when Governor Andrew Cuomo signed into law the Service Disabled Veteran-Owned Business Act last week. Similar to the federal government’s procurement program for Service-Disabled Veteran-Owned Small Business Concerns (SDVOSBC), New York’s law is designed to promote small businesses – in New York defined as companies with 300 employees or less – that are majority-owned and independently operated by a service-disabled veteran. Notably, the legislation doubles the federal government’s three-percent goal for awarding contracts to veteran-owned small businesses. However, the most recent data from the U.S. Small Business Administration’s Fiscal Year 2012 Goaling Report reflects that at the federal level, the three-percent goal was just barely achieved at 3.0324 percent.

The Act creates the Division of Service Disabled Veterans’ Business Development within the New York Office of General Services to oversee the program and certify eligible businesses. It calls for the new office to “develop a comprehensive statewide plan and operational guidelines to promote service-disabled veteran-owned business enterprises and to assist them in obtaining opportunities to participate in the procurement of goods and services by the state.” Rules and regulations detailing how the six-percent goal will be achieved are due out within 90 days from May 12. But, the legislation specifies in advance that the rules will provide for a set-aside of certain procurements by state agencies as one means of promoting the participation goal. Continue Reading

Federal Circuit Requires Government to Indemnify Contractors for CERCLA Remediation Costs Based on “Taxes” Provision in WWII Contracts

Posted in Legal Developments
Rob SneckenbergJonathan M. BakerSteve McBradyThomas Humphrey

Last month, the Federal Circuit decided a case over 70 years in the making.  Following the bombing of Pearl Harbor in 1941 and full-scale U.S. entrance into World War II, the government entered into a series of contracts with oil companies to ramp up production of aviation gasoline (“avgas”) desperately needed for the war effort.  But along with increased production came increased waste and toxic byproducts, notably spent alkylation acid and “acid sludge.”  Safe waste disposal could not keep up with production, and much of the waste was eventually dumped at a site in Fullerton, California. 

Until last week, the oil companies were on the hook for the cleanup costs.  Thanks to the Federal Circuit’s recent ruling, though, the government must now reimburse the contractors for their remediation costs.  The discussion below traces the course of the litigation, outlines the Federal Circuit’s legal analysis, and discusses how the decision represents but one potential avenue for U.S. government contractors to recover environmental remediation costs. Continue Reading

C&M Lawyers Conduct Live Webinar on IP Rules on Wednesday, April 23

Posted in Intellectual Property
John E. McCarthy Jr.Jonathan M. BakerDerek MullinsMargaret Nielsen

On Wednesday, April 23rd at 1 PM Eastern, join our government contracts attorneys for a webinar entitled: “Intellectual Property Rules in Government Contracts Legal Update: Know Your Technical Data and Patent Rights.” During this 90-minute webinar, we will provide an overview of the key principles governing the rules and regulations relating to rights in technical data, computer software, and patents. We will include a discussion of recent and impending changes to these rules, particularly as they relate to commercial items and major weapons systems. You will also pick up practical pointers to help contractors avoid traps for the unwary that could inadvertently compromise your intellectual property rights.

Please note that L2 Federal Resources charges a fee for this webinar. Registration information can be found here.

GSA Schedule Contracting: Has Selling to DoD Just Gotten Harder?

Posted in GSA Schedule
J. Catherine Kunz

On March 13, 2014, the Department of Defense issued a memorandum titled “Class Deviation – Determination of Fair and Reasonable Prices When Using Federal Supply Schedule Contracts.”  This memorandum directs DoD contracting officers to make their own determination of fair and reasonable pricing when using Federal Supply Schedules (also known as GSA or VA Schedule contracts), rather than rely on the fair and reasonable price determination made by GSA when GSA awards Schedule contracts.   

Specifically, the memorandum establishes a class deviation to FAR 8.404(d) that will be applicable to DoD entities buying off Schedule contracts.  This deviation provides that “GSA has determined the prices of supplies and fixed-price services, and rates for services offered at hourly rates, to be fair and reasonable for the purpose of establishing the schedule contract.”  But then it states: Continue Reading