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This special edition of the Fastest 5 Minutes podcast covers recent developments related to the Infrastructure Bill and Inflation Reduction Act, and key areas to watch in 2023. The podcast features a cross practice team of Crowell partners, so we offer perspectives from tax, energy, labor and employment, government contracts, ESG, environmental, and government affairs. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.

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This week’s episode covers the designation of agency labor advisors, a proposed rule implementing the data rights portions of Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive, the dismissal of a challenge to the recent Executive Order and implementing regulation raising the minimum wage for contractors, and the Strengthening VA Cybersecurity Act of 2022, and is hosted by Peter Eyre and Yuan Zhou. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.

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This week, the Department of Labor (DOL) and Office of Management and Budget (OMB) issued a memo directing all agencies to designate “agency labor advisers” who are responsible for advising agencies on “Federal contract labor matters.”  FAR Part 22 contemplates the appointment of “agency labor advisors,” and requires contractors to contact them about potential labor disputes or questions; however, DOL and OMB found not all agencies have such a role.

DOL and OMB also announced the creation of the Contract Labor Advisor Group (CLAG), an interagency working group comprised of labor advisors and acquisition professionals that will “promote better understanding and implementation of contract labor laws and improved communication across agencies in support of a strengthened Federal contracting base.”

While neither the DOL/OMB memo nor FAR Part 22 defines “Federal contract labor matters,”  DOL and OMB’s stated intent behind designating labor advisors and creating the CLAG is to address and prevent labor violations through greater communication between the government and its contractors about federal contract labor matters, including emerging issues like the federal contractor minimum wagenon-displacement of service contract workers, and the expansion of project labor agreements.  Labor advisors and the CLAG will also develop training for the federal workforce and contractors on labor law issues.  The CLAG’s role will also include promoting “labor peace,” in part by promoting pre-contract agreements between an offeror and any labor organization seeking to organize the offeror’s employees to assure the uninterrupted delivery of services during contract performance.

Agencies must designate their labor advisors by February 15, 2023.  We will continue to monitor these developments.

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On January 9, 2023, the U.S. Supreme Court heard oral arguments in In re Grand Jury. In this case, the Court is asked to decide the appropriate test for determining whether documents that include legal advice, but also discuss other non-privileged issues, are protected by the attorney-client privilege. The question before the Court is whether a “dual purpose” communication is privileged only if its “primary purpose” was obtaining legal advice, or if the privilege extends to documents that have only a “significant purpose” of obtaining legal advice. While the case arose in a criminal context and relates to tax advice, the Court’s decision could have broad implications across the legal profession. The case has drawn an enormous amount of attention, as evidenced by the thirteen amici briefs filed in the case.

The case arose when a law firm specializing in international tax issues was ordered to turn over documents containing communications that discussed both the preparation of the client’s tax returns and legal advice. Communications solely involving preparation of a tax return are generally not privileged. The law firm claimed that because the communications had a “dual purpose” that included legal advice, they were protected by the attorney-client privilege and refused to produce them.

Continue Reading Supreme Court Weighs Whether “Dual Purpose” Communications Are Privileged in In re Grand Jury
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On December 19, 2022, DoD issued a DFARS proposed rule that seeks to (1) implement the data-rights portions of the May 2, 2019 Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive (SBIR/STTR Policy Directive), and (2) impose significant changes to technical data and computer software marking requirements.  The SBIR/STTR portion of the proposed rule follows DoD’s advance notice of proposed rulemaking issued on August 31, 2020 (see 85 FR 53758) and incorporates the eight written public comments that DoD received. The proposed changes to marking requirements go beyond the SBIR/STTR Policy Directive and respond to the Federal Circuit’s decision in The Boeing Co. v. Secretary of the Air Force, 983 F.3d 1321 (Fed. Cir. 2020).

Continue Reading DFARS Proposed Rule on SBIR/STTR Data Rights and the Marking of Unlimited Rights Data
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This week’s episode covers the recently enacted Preventing Organizational Conflicts of Interest in Federal Acquisition Act, an update on a proposed rule regarding disclosure of greenhouse gas emissions, and key provisions from the FY23 National Defense Authorization Act, and is hosted by Peter Eyre and Yuan Zhou. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that provides a brief summary of significant government contracts legal and regulatory developments that no government contracts lawyer or executive should be without.

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On December 27, 2022, President Biden signed into law the Preventing Organizational Conflicts of Interest in Federal Acquisition Act (S.3905) to strengthen the current rules relating to identification and mitigation of organizational conflicts of interest (OCIs) in federal acquisition. The Act focuses on updating the current FAR provision, Subpart 9.5, to provide clear definitions, examples, and guidance on potential OCIs and to consider expanding the Subpart to cover certain commercial and foreign relationships.

As currently drafted, FAR Subpart 9.5 provides general rules governing OCIs. Case law at the Court of Federal Claims and the Government Accountability Office have further identified three types of OCIs, “biased ground rules,” “impaired objectivity,” and “unequal access to information.” Under the Act, the FAR Council is meant to provide specific definitions and examples of the three types of OCIs.

The Act also instructs the FAR Council to provide executive agencies with standard solicitation provisions and contract clauses to address OCIs. Executive agencies will be able to tailor the solicitation provisions and contract clauses as necessary to address concerns associated with conflicts of interest and any considerations unique to the executive agency.

The Act directs the FAR Council to update the FAR’s OCI provisions in the next 18 months.  We are expecting the FAR Council to issue proposed regulations, and contractors should be prepared to review the proposed changes and modify practices if needed once the final rules are issued.

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The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023, signed into law on December 23, 2022, makes numerous changes to acquisition policy. Crowell & Moring’s Government Contracts Group discusses the most consequential changes for government contractors here. These include changes that provide new opportunities for contractors to recover inflation-related costs, authorize new programs for small businesses, impose new clauses or reporting requirements on government contractors, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2023 NDAA also includes the Advancing American AI Act, the Intelligence Authorization Act for FY 2023, and the Water Resources Development Act of 2022, all of which include provisions relevant for government contractors.

Continue Reading FY 2023 National Defense Authorization Act: Key Provisions Government Contractors Should Know
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On December 23, 2022, the Department of Defense (“DoD”), General Services Administration (“GSA”), and National Aeronautics and Space Administration (“NASA”) extended the comment period on the proposed rule, “Disclosure of Greenhouse Gas Emissions and Climate-Related Financial Risk,” from January 13, 2023 to February 13, 2023.  As we summarized previously, the proposed rule would, if finalized, require thousands of federal contractors to inventory and publicly disclose their Scope 1 and Scope 2 greenhouse gas (“GHG”) emissions, while further requiring “major” contractors to also establish and validate GHG emission-reduction targets tailored to the goals of the Paris Agreement.

The 30-day extension should be a welcome surprise to a wide range of contractors still attempting to unwrap the impact of this largely unprecedented proposal.  Crowell’s team stands ready to assist in evaluating the implications and identifying issues worthy of comment.

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The Boeing Company (Boeing) and the U.S. Air Force have settled their long-standing data rights marking dispute two years after the U.S. Court of Appeals for the Federal Circuit held that contractors may include restrictive markings on unlimited rights technical data as long as those markings do not restrict the Government’s rights.  A copy of the settlement agreement is attached to the Armed Services Board of Contract Appeals’ order of dismissal.

Under the settlement agreement, the Air Force agreed to accept noncommercial unlimited rights technical data with the following legend, which puts third parties on notice of Boeing’s “continuing ownership of such deliverables”:

Although the settlement is limited to this particular dispute, the Air Force’s acceptance of the legend to preserve the company’s rights vis-à-vis unauthorized third parties without compromising the Government’s unlimited rights suggests that a carefully drafted legend like the one included in the settlement agreement may be an acceptable marking for other contractors with similar concerns under their contracts with the Air Force (and even other agencies).  The key is to ensure that the marking does not impermissibly restrict the Government’s rights in the data, as further illustrated by the ASBCA’s November 29, 2022 decision in FlightSafety InternationalASBCA No. 62659.  

Continue Reading Contractors May Mark Unlimited Rights Technical Data So Long as the Government’s Rights Are Not Impermissibly Restricted: A Study in Contrasts