On November 1, 2022, the Armed Services Board of Contract Appeals (ASBCA) published its FY 2022 Report of Transactions and Proceedings, which provides statistics regarding the adjudication of appeals between contractors and the Army, Navy, Air Force, Corps of Engineers, Central Intelligence Agency, National Aeronautics and Space Administration, Defense Logistics Agency, Defense Contract Management Agency
On February 4, 2022, President Biden signed an Executive Order on Use of Project Labor Agreements for Federal Construction Projects (the “Order”) for federal construction projects valued at $35 million or more. The Order instructs federal agencies to require “every contractor or subcontractor engaged in construction” on projects valued at $35 million or more to “agree, for that project, to negotiate or become a party to” a Project Labor Agreement (“PLA”) with “one or more appropriate labor organizations.”
Federal agencies are authorized to grant exceptions to this PLA requirement under certain defined circumstances. The Order supersedes an executive order issued by then-President Obama in 2009, which had encouraged, but not mandated, the use of PLAs on construction projects valued at more than $25 million. The Order is characterized as a measure that will “promote economy and efficiency in Federal procurement” and advance “small business interests” and represents a noteworthy shift in United States federal labor policy, underscoring President Biden’s commitment to fulfilling his campaign promise to be the most labor-friendly President in history.
The Order applies to all “large-scale construction projects,” defined as a “Federal construction project within the United States for which the total estimated cost of the construction contract to the federal government is $35 million or more.” The Federal Acquisition Regulatory Council (“FAR Council”), in consultation with the President’s Council of Economic Advisers, may adjust this threshold based on inflation. “Construction” is defined to mean “construction, reconstruction, rehabilitation, modernization, alteration, conversion, extension, repair, or improvement of buildings, structures, highways, or other real property.” It appears that the Order does not apply to federally funded projects under the control of state and/or local governments.
In U.S. ex rel. Foreman v. AECOM, the U.S. Court of Appeals for the Second Circuit confirmed that the materiality factors set forth by the Supreme Court in Universal Health Services, Inc. v. U.S. ex rel. Escobar apply to all types of False Claims Act claims and reinforced the relator’s heavy burden even at the pleading stage. This precedential opinion provides several key takeaways for defendants facing FCA liability where the significance of the allegations to the government’s payment decision is in doubt.
Foreman involved a contract to provide maintenance and management support services for the Army, including tactical vehicle and equipment maintenance, facilities management and maintenance, supply and inventory management, and transportation services. The alleged violations stemmed from the contractor submitting timesheets with improper labor hours, failing to properly log and track government property, and hitting a consistently low man-hour utilization (“MHU”) rate—the ratio of time personnel would spend actively engaged in maintenance projects. After the government declined to intervene, the district court dismissed the relator’s claims for failure to plausibly allege materiality.
On appeal, the Second Circuit largely affirmed the district court, while reversing only as to the allegations of labor overcharging due to the lower court’s improper reliance on a document not incorporated into the complaint. The Court’s discussion with respect to the other allegations provides important guidance as to the materiality analysis and the burdens that apply at the pleading stage.
Continue Reading Second Circuit Reinforces the Relator’s Burden to Plead Materiality
In Tolliver Group, Inc. v. United States, No. 2020-2341, 2021 WL 5872256 (Fed. Cir. Dec. 13, 2021), the Federal Circuit vacated and remanded the Court of Federal Claims’ (“COFC”) decision holding that the contractor was entitled to an equitable adjustment for damages caused by the Government’s breach of the implied warranty that satisfactory contract
During December 2021, the House and Senate reached agreement on a compromise National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2022. On December 23, 2021, Congress presented S. 1605 to President Biden, which he signed on December 27, 2021.
The FY2022 NDAA contains numerous provisions relating to acquisition policy—which provide new opportunities for government contractors, will result in the imposition of new clauses or reporting requirements on government contractors, require government reporting to Congress on acquisition authorities and programs, alter processes and/or procedures to which government contractors are subject, etc. Crowell & Moring’s Government Contracts Group discusses the most consequential changes in the FY2022 NDAA for government contractors below.
Continue Reading National Defense Authorization Act for Fiscal Year 2022: Acquisition Policy Changes of Which Government Contractors Should Be Aware
Government Contractors who are concerned with how their companies are navigating environmental, social, and governance (ESG) efforts will want to read a new report by Crowell & Moring. A recent survey of top decision-makers by Crowell & Moring finds that nearly 80% of responding companies have identified and adopted environmental performance goals beyond what regulations
On November 18, 2021, President Biden signed an executive order, “Executive Order on Nondisplacement of Qualified Workers Under Service Contracts” requiring, in most instances, that federal Service contracts and solicitations for such contracts include a clause which mandates that the awardee (and its subcontractors) of a follow-on Service contract for “same or similar
On November 16, 2021, the U.S. Government Accountability Office (GAO) released its Annual Report on Bid Protests for Fiscal Year 2021. While GAO received slightly fewer protests in FY2021 than in the year prior, the overall protest “Effectiveness Rate”—meaning the percentage of cases in which the protester received relief, such as voluntary corrective action or a GAO sustain—remained relatively constant, at 48% (the rate has ranged from 44% to 51% in each of the past five years).
GAO’s Annual Report also provides a helpful summary of the most common grounds for sustained protests in the prior year. In FY2021, those grounds were as follows: (1) unreasonable technical evaluation; (2) flawed discussions; (3) unreasonable cost or price evaluation; and (4) unequal treatment. The inclusion of “flawed discussions” on the list is notable—it is the first time in recent history that discussions-based protest arguments have proven so successful. Though firm conclusions are difficult to draw based upon a single year’s data, this may indicate that GAO is taking a closer look—and holding agencies to a higher standard—at the propriety and fairness of discussions.
Continue Reading GAO Releases Annual Bid Protest Report to Congress for FY 2021, Identifies New “Top Ground” for Sustains
On October 22, 2021, the Court of Federal Claims (Court) unsealed a decision awarding contractor SecurityPoint Holdings, Inc. (SecurityPoint) over $100 million in damages for TSA’s infringement of SecurityPoint’s patent No. 6,888,460 (“the ‘460 patent”). The ‘460 patent concerns a system of trays that recycle through security screening checkpoints by use of movable carts, and
On November 4, 2021, the Occupational Safety and Health Administration (“OSHA”) released its much-anticipated COVID-19 Vaccination and Testing Emergency Temporary Standard (“ETS”) requiring employers with 100 or more employees to ensure that their employees are either vaccinated by January 4, 2022, or submit to weekly testing. According to OSHA, employees who are unvaccinated face a “grave danger” from COVID-19, including the more contagious Delta variant. The ETS notes that COVID-19 is highly transmissible—particularly in workplaces where multiple people interact throughout the day often for extended periods of time—and exposure to COVID-19 can result in death or illness, with some individuals experiencing long-term health complications. OSHA has determined that vaccination is the most effective way to protect these employees.
The ETS will take effect immediately upon publication in the Federal Register, which is scheduled for November 5, 2021. The ETS will apply in those states where OSHA is responsible for regulating workplace safety and health. Per OSHA regulations, states that have their own OSHA-approved occupational safety and health plans will have 15 days to notify OSHA of the action they will take and 30 days to adopt the ETS or promulgate standards that OSHA considers at least as effective as its ETS.
The OSHA ETS is part of a sweeping policy of the Biden Administration to get more American workers vaccinated. In addition to this ETS, the Centers for Medicare & Medicaid Services (“CMS”) released today a Vaccination Interim Final Rule (“IFR”) requiring workers at healthcare facilities participating in Medicare or Medicaid to be fully vaccinated. Both the OSHA and CMS actions follow on the heels of Executive Order 14042 mandating that certain federal contractors and subcontractors require their covered employees to receive vaccinations against COVID-19, with limited exceptions for those who cannot be vaccinated for legally-protected reasons, and OSHA’s June 10, 2021 ETS directed toward protecting healthcare workers in particular from COVID-19. Our previous alert on OSHA’s June 10, 2021 ETS is available here, and our alerts regarding Executive Order 14042 are available here. OSHA excludes from coverage under the ETS those employers who are subject to the CMS rule or the Executive Order 14042 mandate.
Although the ETS is very detailed—490 pages in all—the key takeaways and deadlines for compliance are below.
Continue Reading OSHA Publishes Vaccine Requirements for Employers with 100 or More Employees