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In Globe Trailer Manufacturing, Inc., ASBCA No. 62594 (Jan. 28, 2021), the Armed Services Board of Contract Appeals (the Board) addressed whether a contractor’s certified supplement to a termination settlement proposal (TSP) constitutes a claim under the Contract Disputes Act. After termination, the contractor submitted a TSP that included costs of constructive changes. During the ensuing TSP negotiations, the contractor provided government counsel with a supplement to the TSP that included supporting documentation, calculations, and a CDA certificate pertaining to the constructive change allegation. The contractor subsequently appealed, as a deemed denial, the TSP and supplement to the Board. The government moved to dismiss, alleging that (1) the TSP had not yet ripened into a valid claim, and (2) the supplement to the TSP was not a valid claim because (a) it was provided to government counsel instead of the contracting officer, and (b) did not make a demand in a single document.

The Board dismissed the TSP as unripe, since there was insufficient evidence that the parties had reached impasse in TSP negotiations, but it held that the TSP supplement was a valid claim that was properly appealed as a deemed denial. The Board held that the contractor’s supplemental email and attachments met the jurisdictional requirements of a valid claim, and it reaffirmed the rule that submitting a claim to government counsel, instead of the contracting officer, does not invalidate the claim.

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In this episode, hosts Evan Wolff and Kate Growley talk with Michael Gruden about what government contractors need to know about Federal Contract Information or FCI. Crowell & Moring’s “Byte-Sized Q&A” podcast takes the complex world of government contracts cybersecurity and breaks it down into byte-sized pieces.

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This week’s episode covers suspension and debarment, False Claims Act developments, and oversight relating to the pandemic response, and is hosted by partner Peter Eyre and associate Gabby Trujillo. 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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Yesterday, February 17, 2021, Senator Chuck Grassley (R-IA) and Acting Assistant Attorney General of the Civil Division, Brian Boynton, highlighted the central role that the False Claims Act (FCA) has held and will continue to play in the government’s civil fraud enforcement toolkit for years to come. In prepared remarks at the Federal Bar Association’s 2021 Qui Tam Conference, Grassley confirmed that he is drafting legislation intended to curb what he called the government’s incorrect interpretation that the Department of Justice (DOJ) has unfettered authority to dismiss qui tam lawsuits brought by relators. In an apparent reference to the Supreme Court’s landmark decision in Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016), Senator Grassley also asserted that the courts have weakened the statute by dismissing cases based on a misapplication of the FCA’s materiality requirement, another area that he suggested was ripe for Congressional intervention. In separate remarks, Boynton highlighted DOJ’s top priority areas for FCA enforcement in the coming years as well as tools the government is developing to increase its ability to uncover complex fraudulent schemes.

Continue Reading “You Have to Come Down with a Sledgehammer, Not a Toothpick!” – Senator Grassley Previews Potential Amendments to Increase False Claims Act Enforcement and Recoveries

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On February 3, 2021, the Pandemic Response Accountability Committee (PRAC) issued an update to its Top Challenges in Pandemic Relief and Response, identifying new challenges in funding oversight and reiterating others identified in its original report issued in June 2020. The updated report, based on feedback received from Offices of Inspectors General (OIG) at more than 40 agencies, identifies four new challenges focused on ferreting out fraud related to pandemic funding and the health and safety of federal employees: (1) preventing and detecting fraud against government programs; (2) informing and protecting the public from pandemic-related fraud; (3) data transparency and completeness; and (4) federal workplace safety. The PRAC also identifies contributory risk factors within each new challenge and makes recommendations for agencies to conduct additional oversight. This PRAC update, along with a recently-issued quarterly report from the Special Inspector General for Pandemic Recovery (SIGPR), confirm the rising tide of civil enforcement activity with respect to pandemic relief funds and the attendant risks to recipients and entities involved in administering such funds, particularly in light of the punitive damages provided for by the government’s most powerful civil fraud enforcement tool, the False Claims Act, 31 U.S.C. § 3729.

Continue Reading February Reports from PRAC and SIGPR Confirm Government’s Focus on Pandemic Funding Oversight and Enforcement Challenges

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The National Institute of Standards and Technology (NIST) recently released the final version of NIST Special Publication (SP) 800-172, Enhanced Security Requirements for Protecting Controlled Unclassified Information. Designed to supplement the requirements in NIST SP 800-171—the applicable standard under DFARS 252.204-7012—800-172 provides 35 enhanced security requirements to protect controlled unclassified information (CUI) associated with critical programs and high value assets from sophisticated adversaries referred to as advanced persistent threats (APTs).

Although expected to impact relatively few contractors, where applicable, agencies may include select enhanced security requirements from 800-172 in their contract provisions. The Department of Defense (DoD) has also incorporated several of the requirements identified in prior drafts of 800-172 into maturity levels 4 and 5 of the Cybersecurity Maturity Model Certification (CMMC)

Photo of Kate M. Growley, CIPP/G, CIPP/USPhoto of Evan D. Wolff

In this episode, hosts Evan Wolff and Kate Growley talk about what government contractors need to know about advanced persistent threats – or APTs. Crowell & Moring’s “Byte-Sized Q&A” podcast takes the complex world of government contracts cybersecurity and breaks it down into byte-sized pieces.

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On January 19, 2021, the Eleventh Circuit affirmed a district court’s rejection at summary judgment of a disgruntled employee’s False Claims Act (FCA) retaliation claim in Hickman v. Spirit of Athens, No. 19-10945 (11th Cir. Jan. 19, 2021). The Court’s decision makes clear that, despite expansions to the FCA in 2009 and 2010 protecting employees who engage in “efforts to stop 1 or more violations” of the FCA, plaintiffs must nevertheless establish that they held an objectively reasonable belief that they were attempting to prevent the submission of false claims to the government for their conduct to constitute protected activity.

The plaintiffs worked for Spirit of Athens, a nonprofit organization. The executive director became concerned in reviewing tax returns that $61,000 of the organization’s expenses were generally categorized as “other expenses” without any further explanation. The executive director verbally retracted her signature on the tax forms, but the organization’s president signed and submitted them himself. The executive director and her assistant then arranged for the board members to receive a copy of the tax documents, shared their concerns with the president, and even hired an outside firm to audit the organization’s tax returns. Apparently unhappy with the executive director and her assistant’s conduct, the president fired them. The two then brought suit against the organization, claiming that they were terminated for “their attempts to combat the organization’s misuse of federal funds.” The district court granted summary judgment for the defendant, finding that plaintiffs had failed to establish that they had engaged in protected activity under the FCA.

Continue Reading Eleventh Circuit Holds that a Sincere Belief is not the Same as a Reasonable One Under the False Claims Act’s Retaliation Provision

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This week’s episode covers domestic preferences and American-made goods, the regulatory freeze memo, a bid protest decision about discussions, and an Executive Order that focuses on using the procurement process to address the Biden Administration’s climate policy, and is hosted by partner Peter Eyre and counsel Monica Sterling. 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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The annual Interagency Suspension and Debarment Committee (ISDC) recently issued its annual report to Congress. The report, found here, contains details describing improvements to the federal suspension and debarment process and a summary of each agency’s suspension and debarment activities in Fiscal Year 2019. Throughout FY2019, the ISDC pursued a strengthened understanding and awareness of suspension and debarment activities across the federal acquisition and financial assistance communities, and continued to focus on modernizing/streamlining lead agency coordination. Otherwise, while the total numbers of referrals and suspensions increased in FY2019 compared to FY2018, proposed debarments and debarments continued to decline. In addition, the ISDC notes that from FY2018 to FY2019 agencies better utilized pre-notice letters to notify individuals or entities that the Suspension and Debarment Official (SDO) was considering SDO action, allowing the recipient an opportunity to respond before formal SDO action.