On June 24, 2024, the U.S. District Court for the Northern District of Texas issued a nationwide preliminary injunction, stopping the U.S. Department of Labor (“DOL”) from enforcing three key elements of regulations related to the Davis-Bacon Act and Related Acts (“DBA” or “Act”). The court order issued in Associated General Contractors v. U.S. Department of Labor will provide significant comfort and certainty to contractors that perform work on federally funded construction projects.Continue Reading Nationwide Injunction Halts Key Provisions of Davis-Bacon Act Regulations
DoD Expands Restrictions on Supply Chain for Certain Magnets, Tantalum, and Tungsten
On May 30, 2024, the Department of Defense (DoD) issued a final rule implementing Section 844 of the Fiscal Year (FY) 2021 National Defense Authorization Act (NDAA) and Section 854 of the FY 2024 NDAA by amending DFARS 225.7018-2 and accompanying DFARS clause 252.225-7052, which restrict DoD from acquiring certain metals and magnets from “covered countries” of Iran, North Korea, Russia, and China, to prohibit even earlier inputs in the supply chain from occurring in these countries. Despite comments discussing the infancy of the domestic market for many “covered materials”—defined as samarium-cobalt magnets, tantalum metals and alloys, tungsten metal powder, and tungsten heavy alloy or any finished or semi-finished component containing tungsten heavy alloy—the final rule expands the restrictions on sourcing covered materials from covered countries. Currently, the rule requires that covered materials not be melted or produced in covered countries but, effective January 1, 2027, the updated rule prohibits covered materials being mined, refined, separated, melted or produced in one of the covered countries. The expansion of the focus of the prohibition all the way back to where these materials were mined is consistent with the U.S. government’s effort to develop the domestic industrial base for and encourage on-shoring of critical minerals, magnets, and metals. Continue Reading DoD Expands Restrictions on Supply Chain for Certain Magnets, Tantalum, and Tungsten
“(Don’t) Let the Chips Fall Where They May”: FAR Council Previews Proposed Rule Implementing the Covered Semiconductor Prohibition
On May 3, 2024, the Federal Acquisition Regulation (FAR) Council issued an Advanced Notice of Proposed Rulemaking (ANPR) regarding the prohibition on semiconductors produced by certain Chinese manufacturers, enacted in Section 5949(a)(1) of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year 2023 (Section 5949) expanding on the prohibition on covered telecommunications equipment and services produced by Huawei, ZTE, and others from Section 889 of the FY 2019 NDAA (Section 889). Continue Reading “(Don’t) Let the Chips Fall Where They May”: FAR Council Previews Proposed Rule Implementing the Covered Semiconductor Prohibition
OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
On April 22, 2024, the Office of Management and Budget (OMB) issued a Final Rule significantly revising the Uniform Guidance for grants, cooperative agreements, and other federal financial assistance. The Final Rule (titled “OMB Guidance for Federal Financial Assistance”), and OMB’s accompanying memorandum to agencies and reference guide, state that the revisions aim to streamline and clarify the grant rules and improve management, transparency, and oversight of federal financial assistance. Agencies must implement the Final Rule by October 1, 2024; however, agencies may apply it to federal awards as early as June 21, 2024.Continue Reading OMB Final Rule Rewrites the Uniform Guidance for Grants, Cooperative Agreements, and Other Federal Financial Assistance
New FAR Part 40 to Address Supply Chain and Information Security Requirements
On April 1, 2024, the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) issued a final rule updating the Federal Acquisition Regulation (FAR) to add Part 40 on information security and supply chain security. This first action did not implement any new requirements; however, separate rulemakings will follow to relocate existing information security and supply chain security policies and procedures to the new Part 40. Additionally, new related regulations will be housed in Part 40. These actions suggest that the flow of information security and supply chain regulations is likely to continue unabated for at least the next few years.Continue Reading New FAR Part 40 to Address Supply Chain and Information Security Requirements
Show Me the Money: Contractors and Subcontractors May Soon Be Subject to Pay Transparency Requirements, Which May Also Trigger New Bid Protest Issues
Following a January 29, 2024 White House announcement and Fact Sheet, on January 30, 2024, the Federal Acquisition Regulation (FAR) Council issued a Notice of Proposed Rulemaking (Proposed Rule) on salary-history bans and pay transparency for applicants and employees of federal contractors and subcontractors. On the same day, the Office of Federal Contract Compliance Programs (OFCCP) issued some FAQs on the compensation history issue. These actions by the federal government to ban prior salary information and require compensation information in job postings echo the efforts of multiple states and municipal governments that have enacted similar salary history bans and/or compensation disclosure requirements:Continue Reading Show Me the Money: Contractors and Subcontractors May Soon Be Subject to Pay Transparency Requirements, Which May Also Trigger New Bid Protest Issues
DoD is Making its List, and Checking it Twice: DoD Updates 1260H Chinese Military Companies List
On January 31, 2024, the Department of Defense (DoD) updated the 1260H List of entities identified as “Chinese military companies” operating in the United States, as it is required to do at least annually by Section 1260H of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2021. Section 1260H defines a “Chinese military company” as an entity that is:Continue Reading DoD is Making its List, and Checking it Twice: DoD Updates 1260H Chinese Military Companies List
The FY 2024 National Defense Authorization Act: Key Provisions Government Contractors Should Know
The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2024, signed into law on December 22, 2023, 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 impose a new conflict of interest regime for government contractors with a connection to China, impose new restrictions and requirements, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2024 NDAA also includes the Federal Data Center Enhancement Act, the American Security Drone Act, and the Intelligence Authorization Act for FY 2024.Continue Reading The FY 2024 National Defense Authorization Act: Key Provisions Government Contractors Should Know
Coming December 4: Do You Know Where Your Supply Chain Risks Are? FAR Council Issues Interim Rule Requiring Contractor Diligence for FASC Exclusion and Removal Orders
On October 5, 2023, the Federal Acquisition Regulation (FAR) Council published an interim rule to prohibit, in the performance of a government contract, the delivery or use of “covered articles” (which includes certain information technology and telecommunications equipment, hardware, systems, devices, software, and services) subject to a Federal Acquisition Supply Chain Security Act (FASCSA) exclusion or removal order. The interim rule also imposes obligations for a related “reasonable inquiry” at the time of proposal submission and quarterly monitoring during contract performance. These changes implement the FASCSA of 2018 (P.L. 115-390). While the Federal Acquisition Security Council (FASC) and the order-issuing agencies (Department of Homeland Security (DHS), Department of Defense (DoD), and the Office of the Director for National Intelligence (ODNI)) have not yet issued any such FASCSA orders, those orders will be identified in the System for Award Management (SAM) or – in some cases – identified in and specific to the contract and any resulting subcontracts.Continue Reading Coming December 4: Do You Know Where Your Supply Chain Risks Are? FAR Council Issues Interim Rule Requiring Contractor Diligence for FASC Exclusion and Removal Orders
A Brief Primer on the Impact of a Federal Government Shutdown
I. Introduction
A U.S. federal government shutdown creates a number of direct and indirect consequences that impact U.S. companies, individuals and virtually every aspect of the U.S. economy. Although the federal government has experienced previous lapses in funding that have led to shutdowns of all or part of the federal government, the current funding impasse and impending shutdown raise a number of unique and unprecedented questions for government workers, government contractors and businesses, and the public at large.
A U.S. federal government shutdown can have serious consequences because of the size of federal spending and its impact on the U.S. economy. The U.S. government spent $6.27 trillion dollars in fiscal year 2022 which amounted to approximately 25% of total gross domestic product. The federal government funds over 2,200 federal assistance programs for the public. There are over 2.2 million federal employees who will be directly impacted in some way by a federal government shutdown with the majority facing a furlough of an undetermined length. There are over 11 million U.S. federal government contracts signed every year and they may be impacted by a shutdown. Finally, the federal government spends approximately $1.2 trillion dollars every year, or about 19% of all federal spending, on programs that fund or are related to the states.
The purpose of this Client Alert is to explain the consequences of a government shutdown in general, why this one may be different, and to also offer insights to the regulated industries, government contractors and others on what to expect this time around. Our team is ready and available to help advise companies through this shutdown process.Continue Reading A Brief Primer on the Impact of a Federal Government Shutdown