Government Contracts Legal Forum : Government Contracts Lawyers & Attorneys for Litigation & Counseling

On Thursday, January 19, 2012, from 2:00 - 3:30 pm EST, please join us for this webinar, "What Will the New Year Bring for Government Contractors? Top Headlines, Headaches, and Legal Developments to Watch in 2012.” As we begin the new year, government contractors are facing significant unknowns that could have a direct impact on the bottom-line:

• How will the continuing budget pressures impact contractors? Will we see more terminations because of these budget realities? How will the shrinking procurement budget impact the number of protests? Will there be more in-sourcing?
• Will the recent uptick in investigations continue? How about suspension and debarment activity?
• Will the SBA crackdown on enforcement continue to impact teaming relationships with small businesses?
• How will the presidential election influence the climate for government contractors? What will the vacancy at OFPP mean for contractors?
• How should contractors prepare for potential revisions to OFCCP’s affirmative action and nondiscrimination obligations regarding veterans and individuals with disabilities? What can contractors expect in an audit under OFCCP’s proposed revised scheduling letter and how should they prepare?
• What do the new personal conflict of interest regulations mean for your company?
• How has the treatment of technical data for major systems changed?

Join Crowell & Moring’s team of government contracts attorneys for a special free webinar that examines the answers to these questions and many more. Our team invites you to participate in a discussion of what we believe are likely to be many of the key issues facing government contractors in 2012, including topics such as terminations, suspension & debarment, bid protests, conflicts of interest, data rights, OFCCP, grants, compliance & ethics, international, small business, cyber security, and procurement fraud. The presenters include some of the most experienced attorneys in the field, and we hope you can make it.

Please click here to register for this free event. 

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On January 3, 2012, the FAR Council issued a final rule to implement a congressional mandate that the public have access to all information (excluding past performance reviews) in the Federal Awardee Performance and Integrity Information System ("FAPIIS"). FAPIIS was created in 2010 as a one-stop shop for contracting officers to review information about contractors' business ethics, integrity, and performance.

In response to concerns raised about the disclosure of a contractor's proprietary and confidential information, the final rule added an immediately effective requirement that contractors be given a seven-calendar-day review period to object to the public release of information on the grounds that such information is exempt from disclosure under FOIA. If a contractor objects, the information will be removed by the Government and the issue will be resolved in accordance with agency FOIA procedures. If there is no objection, the entry will be automatically released to the public part of the FAPIIS site within 14 calendar days after the review period began.
 

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On November 16, hundreds of government contractors joined us for a webinar about the new personal conflicts of interest (“PCI”) requirements and the new implementing FAR provision, 52.203-16. It was a lively discussion and we explored some of the questions and challenges relating to this new requirement. In case you missed it, a recording of the webinar is now available in its entirety, along with a copy of the presentation. Hope you enjoy it.

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On September 16, 2011, DoD issued a final rule that requires contractors to prominently display fraud hotline posters prepared by the DoD Office of the Inspector General. These posters must be displayed in common work areas within business segments performing work on DoD contracts. The current posters from the DoD IG can be found here and here.

This requirement to display posters applies, unless the contract is for the acquisition of a commercial item, will be performed entirely outside the United States, or does not exceed $5 million. In addition, this requirement must be flowed down to all subcontracts that similarly qualify.

Some government contractors are concerned that this final rule will undermine the role that company hotline posters have in internal contractor compliance and ethics programs. For many in the industry, these company programs have a proven track record of indentifying and addressing improper conduct. There is a concern that the mandatory use of the DoD IG hotline posters may usurp the company’s position as the first line of defense against waste and fraud as well as health and safety issues and, instead, place the DoD IG in that role.
 

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On September 13, 2011, the Office of Government Ethics proposed amendments to the regulation governing the acceptance of gifts by executive branch employees. The purpose of the amendments is to (a) implement the lobbyist gift ban already applicable, by Executive Order of the President, to most political appointees; and (b) impose limits on the use of gift exceptions by all executive branch employees (not merely political appointees).

The proposed rule would render existing exceptions to the gift restrictions inapplicable when the gift giver is both a prohibited source (e.g., a person doing business with the employee’s agency) and a lobbyist or lobbying organization, thus limiting the use of exceptions such as the $20 de minimis exception, the widely attended gathering exception, the social invitation exception, and the exception for meals, refreshments, and entertainment from private entities in a foreign area. Under the proposed amendments, viable exceptions to the gift restrictions would include: gifts based on a personal relationship, discounts and similar benefits, gifts resulting from a spouse’s business or employment, customary gifts provided by prospective employers, gifts authorized by an OGE-approved supplemental regulation, gifts accepted under specific statutory authority, awards and honorary degrees, gifts resulting from an employee’s outside business or employment, and for certain benefits in connection with permissible political activities.

Written comments must be received by OGE before November 14, 2011.
 

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On May 16, 2011, GSA published a Notice to clarify whether information contractors input into the Federal Awardee Performance and Integrity Information System (“FAPIIS”) is exempt from disclosure under the Freedom of Information Act (“FOIA”). Presumably this Notice was prompted by a recent flood of FOIA requests. In essence, the Notice provides that Information posted on or after April 15, 2011 will be available to the public and not exempt from disclosure. But any information entered before April 15, 2011, is exempt from disclosure under b(4).

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On April 26, 2011, the government issued a proposed rule governing organizational conflicts of interest.  This proposed rule diverges substantially from the current framework in FAR 9.5, from the DFARS rule proposed last year, and from certain aspects of decades of decisional law from GAO and the Court of Federal Claims. Please click here for our summary of the FAR proposal.

 There are four differences that are particularly interesting:

•  Analysis Of Risk. The proposed FAR provision asserts that there are two kinds of risk that can flow from OCIs – (i) harm to the integrity of the competitive acquisition system and (ii) harm to the government’s business interests. The proposed rule sets forth different treatment based on that distinction.
•  Acceptance Of Risk Of Harm To Government Business Interests. In circumstances where the OCI harms the competitive acquisition system, the OCI must be substantially reduced, eliminated, or waived. However, in contrast, the FAR Councils’ proposal provides that the risk of harm to the government’s business interests may sometimes be assessed as an acceptable performance risk and further action may not be necessary to address the conflict.
•  Recognition Of Corporate Structural Barriers And Internal Controls. The proposed FAR provision recognizes that corporate structural barriers – such as independent boards of directors – may, in some circumstances, constitute sufficient mitigation.
•  Removal Of Unequal Access To Nonpublic Information From The OCI Framework. The proposed FAR provision removes the concept of unequal access to nonpublic information from the definition of OCIs, and treats it separately under FAR Part 4.

 In addition, the government has asked industry to focus on specific issues in formulating comments (which are due on or before June 27, 2011), including:

•  Is the definition of “organizational conflict of interest” sufficiently comprehensive to address all potential forms of such conflicts?
•  Do the enumerated techniques for addressing OCIs adequately address the Government’s interests? Are any too weak or overbroad? Are there other techniques that should be addressed?
•  Do the proposed solicitation provisions and contract clauses adequately implement the policy framework set forth in the proposed rule? For example, is a clause limiting future contracting an operationally feasible means of resolving a conflict? Would it be beneficial and appropriate for this information generally to be made publicly available, such as through a notice on FedBizOpps? Do the solicitation provisions and contract clauses afford sufficient flexibility to help an agency meet its individual needs regarding a prospective or actual conflict?
•  Does the proposed rule strike the right balance between providing detailed guidance for contracting officers and allowing appropriate flexibility for dealing with the variety of forms that organizational conflicts of interest take and the variety of circumstances under which they arise?
•  Are there certain types of contracts, or contracts for certain types of services, that warrant coverage that is more strict than that provided by the proposed rule?

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As we blogged previously, as of today - April 15, 2011 - the public has access to all information (excluding past performance reviews) in the Federal Awardee Performance and Integrity Information System ("FAPIIS"). FAPIIS was created in 2010 as a one-stop shop for contracting officers to review information about prospective contractors' business ethics, integrity, and performance. Click here for the public portal, which is now live and ready for use.

The public will now have access to contractor-provided information about criminal, civil, and administrative proceedings, as well as government-provided information about contract terminations for default or cause and suspension and debarment. With respect to information entered in FAPIIS before April 15, 2011, it will be subject to the Freedom of Information Act process and is unlikely to be available in FAPIIS.
 

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On January 24, 2011, the FAR Council issued an interim rule to implement a congressional mandate that the public must have access to all information (excluding past performance reviews) in the Federal Awardee Performance and Integrity Information System ("FAPIIS"). FAPIIS was created in 2010 as a one-stop shop for contracting officers to review information about prospective contractors' business ethics, integrity, and performance. Click here for more information about FAPIIS.

After April 15, 2011, the public will have access to contractor-provided information about criminal, civil, and administrative proceedings, as well as government-provided information about contract terminations for default or cause and suspension and debarment. The new clause states that requests to review the information posted in FAPIIS before April 15, 2011, will be subject to the Freedom of Information Act process.

As to new contracts, contracting officers will be required to insert the new FAR clause in solicitations. As to existing contracts, contracting officers will be required to bilaterally modify existing contracts (including indefinite-delivery indefinite-quantity contracts) that contain the FAR clause 52.209-8.  If the contracting officer is unable to negotiate this modification prior to April 15, 2011, the contracting officer will be required to obtain approval at least one level above the contracting officer to negotiate an alternate resolution.

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On January 12, 2011, Crowell & Moring’s government contracts group hosted its first webinar of the new year. The theme of the webinar was "What Will the New Year Bring? Top Headlines, Headaches, and Legal Developments for Government Contractors to Watch in 2011."  If you missed it, you can watch the replay by clicking here.

Our team of government contracts experts offered forecasts and predictions about the issues that will be making headlines this year. We will be watching things closely to see if our predictions are accurate!
 

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