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In Doubleshot, Inc., ASBCA No. 61691 (July 19, 2022), the Armed Services Board of Contract Appeals (“ASBCA”) granted the contractor’s motion for partial summary judgment, denying the Government’s claim for unallowable costs to the extent that it was based on missing or unsigned employee time cards.  The ASBCA held that the contractor was not required to maintain time card records to support the allowability of labor charges beyond the retention period specified in the contractor’s cost-plus-fixed-fee contracts (including applicable time extensions). 

The contracts incorporated both the Audit and Records – Negotiation clause (FAR 52.215-2) and the Allowable Cost and Payment clause (FAR 52.216-7), which grant the Government the right to examine the contractor’s records reflecting all claimed costs and reduce payments for amounts that are unallowable.  Following the contractor’s delayed submission of two final indirect cost rate proposals, the Defense Contract Audit Agency (“DCAA”) did not begin auditing the proposals until eight months after the contractual obligation to maintain records had expired.  DCAA then questioned the contractor’s labor costs for which there was no time card support, even though the contractor was able to demonstrate that it paid its employees.  The Government’s claim and the contractor’s appeal followed. 

Continue Reading Too Late: Government’s Failure to Timely Audit Did Not Extend the Contractor’s Document Retention Obligations

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On September 15, 2022, the Biden Administration issued a new executive order (“EO”) and accompanying fact sheet, designed to sharpen the current U.S. foreign investment screening process as administered by the Committee on Foreign Investment in the United States (“CFIUS” or the “Committee”). [1] This EO is the first to specifically identify certain additional national security factors for CFIUS to consider when evaluating transactions involving foreign investors. 

While the EO does not expand the jurisdiction of CFIUS or establish new requirements, the EO formally directs CFIUS to focus on transactions that could give foreign parties access to U.S. technologies, data, or critical supply chains that the Biden Administration has identified as important for maintaining U.S. economic and technological edge. The EO does not mention any specific country, but underscores the threat posed by inbound investments “involving foreign adversaries or other countries of special concern,” which may appear to be only economic transactions for commercial purposes but could “actually present an unacceptable risk to United States national security due to the legal environment, intentions, or capabilities of the foreign person, including foreign governments involved in the transaction.” [2]

Continue Reading Biden Administration Announces Presidential Directive on Sharpening Foreign Investment Screening by CFIUS

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As outlined in our prior client alert, the Office of Federal Contract Compliance Programs (the “OFCCP”) published a Notice in the Federal Register to federal contractors of a Freedom of Information Act (“FOIA”) request for disclosure of Type 2 Consolidated EEO-1 Report data submitted by all federal contractors and first-tier subcontractors from 2016 until

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On September 8, 2022, the Department of Defense (“DoD”) issued Class Deviation 2022-O0009 (the “Deviation”) immediately authorizing contracting officers to allow active registration in the System for Award Management (“SAM”) within 30 days of contract award or three days prior to submission of the first invoice (whichever comes first) rather than at the time of award—provided the contractor can prove it has initiated or attempted to start the SAM registration process.  The Deviation is in effect through October 31, 2022 unless rescinded or extended.

The SAM registration process, which changed in April 2022 when GSA switched from the DUNS number to the Unique Entity Identifier (“UEI”), has suffered from significant delays and system errors.  These system challenges continue, and SAM incident tickets continue to take weeks to process in many cases.  With this Deviation, DoD joins a number of other agencies that have already issued guidance for managing SAM delays that may affect contracts or grants.

Continue Reading DoD Issues Deviation for SAM Registration Requirement Due to Ongoing Processing Delays

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On Friday September 9, 2022, the Principal Director for DoD Defense Pricing and Contracting (DPC) issued a Memorandum titled “Managing the Effects of Inflation with Existing Contracts.”  The Memorandum provides guidance to Contracting Officers about the range of approaches available to address the effects of inflation on the Defense Industrial Base.  Of note, it highlights two paths contractors may pursue to recover for inflation under fixed-price contracts.

First, the Memorandum notes that the ability to recognize cost increases is largely dependent on contract type, asserting that “[c]ontractors performing under firm-fixed-price contracts that were priced and negotiated before the onset of the current economic conditions generally bear the risk of cost increases.”  This is similar to guidance DPC issued in May encouraging Contracting Officers to consider including economic price adjustment (EPA) clauses in new contracts but expressing skepticism about contractors’ ability to recover for inflation under existing fixed-price contracts.  However, the new Memorandum allows that “there may be circumstances where an accommodation [such as schedule relief or amended contract requirements] can be reached by mutual agreement of the contracting parties, perhaps to address acute impacts on small business and other suppliers.”

Continue Reading DoD Will Consider Contract Adjustments Addressing Inflation

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This special edition of the Fastest 5 Minutes podcast covers recent developments related to domestic preferences including executive orders, final regulations, the Made in America Office, and the Infrastructure Investment and Jobs Act, and is hosted by Peter Eyre, Addie Cliffe, and Allison Skager. Crowell & Moring’s “Fastest 5 Minutes” is a biweekly podcast that

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On August 31, 2022, the White House Council on Environmental Quality (“CEQ”) released instructions to federal agencies for implementing Executive Order (“EO”) 14057 Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability.  As we have covered previously, EO 14057 identified ambitious sustainability goals for federal agencies, including:

  • 100 percent carbon-free electricity by 2030;
  • 100 percent zero-emission vehicle fleet by 2035;
  • net-zero emissions building portfolio by 2045;
  • 65 percent reduction in Greenhouse Gas (“GHG”) Scope 1 and 2 emissions from Federal operations; and
  • net-zero emissions from federal procurement, including a “Buy Clean” policy to promote use of construction materials with lower embodied emissions.


Continue Reading Further Federal Action on Government-Wide Sustainability Goals

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In Lockheed Martin Aeronautics Company, ASBCA No. 62209, the Armed Services Board of Contract Appeals (“Board”) denied the Air Force’s motion for summary judgment, which had argued that the “measured mile” approach to calculating disruption was legally untenable.  In its decision, the Board noted that it has “accepted the measured mile approach as an

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On August 19, 2022, the Office of Federal Contract Compliance Programs (the “OFCCP”) published a Notice in the Federal Register to federal contractors of a Freedom of Information Act (“FOIA”) request from Will Evans of the Center for Investigative Reporting (“CIR”) for disclosure of Type 2 Consolidated EEO-1 Report data submitted by all federal contractors and first-tier subcontractors from 2016 until 2020.  In order to determine whether this information is protected from disclosure under FOIA Exemption 4, which protects disclosure of confidential commercial information, the OFFCP requested that federal contractors whose information would otherwise be subject to this request submit objections to the OFCCP by September 19, 2022.  Type 2 EEO-1 reports are one of the mandatory submissions that multi-establishment employers file annually, consistent with their obligations under Title VII of the Civil Rights Act of 1964 and the OFCCP’s regulation. They consist of a consolidated report of demographic data for all employees by employer establishment, categorized by race/ethnicity, sex and EEO-1 job category.  Notably, the FOIA request at issue does not seek production of Component 2 compensation data included in the EEO-1 reports submitted by federal contractors and subcontractors in 2017 and 2018.

Continue Reading Federal Contractors Have Until September 19, 2022 to Object to Disclosure of EEO-1 Data Subject to Pending FOIA Request

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President Biden will soon sign into law the Inflation Reduction Act (IRA), which provides $750 billion in funding and major federal policy changes impacting the U.S. energy, environment, healthcare and tax sectors. On August 7, 2022, the IRA passed the U.S. Senate by an all-Democrat 50-50 party line vote, with Vice President Harris breaking the tie and ensuring passage. On August 12, 2022, the IRA passed the U.S. House by a vote of 220 to 207. The President’s signature, will make the bill law, and allow President Biden, U.S. Senate Majority Leader Chuck Schumer (D-NY), and U.S. House Speaker Nancy Pelosi (D-CA) to claim a major victory while making progress on a portion of the President’s Build Back Better agenda just three months before the mid-term elections on November 8, 2022.

The Crowell and Moring LLP and Crowell & Moring International (CMI) teams have put together this Client Alert with two main purposes. The first is to provide a summary of the highlights of the bill, which is included in Section I, and the second is to provide a more detailed section-by-section review of the bill, which is provided in Section II.

Continue Reading President Biden To Sign New Inflation Reduction Act