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Crowell & Moring is pleased to offer a no-cost review of common compliance issues that can drive down sales price or increase borrowing costs for emerging government contractors, as well as prevent purchasers from receiving full value for their investments.  Government contractors face a long road to sale, fundraising, and post-acquisition integration – these processes can be derailed easily by compliance missteps, recordkeeping problems, or a multitude of other issues that may not be top-of-mind for sellers and even some purchasers.  Once diligence begins, addressing these issues becomes significantly more expensive and problematic.

At Crowell & Moring, we believe in long-term strategic partnerships with our clients and stand ready to proactively assist with an analysis of potential compliance issues very early in the sale/fundraising process to avoid diligence or post-acquisition surprises.  With knowledge across the whole range of government contract issues, we are well suited to evaluate a company’s government business  and identify non-obvious (but very real) areas of risk.

Continue Reading No Cost Compliance Check-Up for Government Contractors

Please join us on June 27, 2017 for a lunchtime panel discussion regarding “Government Contracts M&A in 2017: Challenges and Opportunities on the Horizon.”

During this program, moderated by Peter Eyre,  a panel of industry, private equity, law firm, and government representatives will tackle key considerations for buyers and sellers to take into account when structuring and executing M&A transactions in the government contract marketplace, including: due diligence “hot spots” and effective risk management; specific considerations regarding transactions involving for foreign entities; and unique requirements when acquiring or selling companies in the defense and intelligence fields.

Panelists:

  • Mike Molino, SVP, Corporate Strategy, Leidos
  • Tim Garnett, Managing Director, Avascent
  • David Wodlinger, Partner, Arlington Capital
  • Marc Marlin, Managing Director, KippsDeSanto & Co.
  • Addie Cliffe, Partner, Crowell & Moring

 

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. This latest edition is hosted by Partner David Robbins and guest host, Counsel Addie Cliffe, and includes updates on the DFARS counterfeit parts rules, the HUBZone Program, the Federal Source Code Policy, and notable GAO decisions.

Click below to listen via the embedded player or access from one of these links:
PodBean | SoundCloud | iTunes

On Thursday, August 11th, 2016 at 1 PM Eastern, join our Crowell & Moring attorneys for a webinar entitled: “An Intro to Export Controls, Economic and Trade Sanctions: Understanding and Addressing Risks and Challenges.” During this 90-minute webinar, our experts will clarify how US export control rules specifically affect contractors, subcontractors, suppliers, consultants and manufacturers engaged in the international marketplace. You’ll learn about current compliance responsibilities and requirements and how the efforts to reform export control change requirements — and risks.

Attendees who complete the webinar will:

  • gain a high-level understanding of U.S. export controls, focusing on the EAR and the ITAR, including what items are covered under each regime, and their basic rules, restrictions and exceptions;
  • become familiar with the on-going export control reform effort, and learn what to expect as that reform effort continues to move forward;
  • develop as understanding of U.S. sanctions programs and the financial and reputational risks they pose to U.S. government contractors;
  • identify the principal changes in the ever-fluctuating landscape of U.S. sanctions programs; learn how your company can proactively identify areas of high risk, as well as develop or improve its compliance program to minimize that risk;
  • …and more!

Government Contracts Group Counsel Addie Cliffe, International Trade Group Counsel Chris Monahan and Associate Jana del-Cerro will be conducting this webinar.

Please note that Thompson Information Services charges a fee for this webinar. Registration information can be found here.

Earlier this week, the Department of Veterans Affairs (“VA”) announced a seismic shift in policy that opens VA Schedule 65 IB to covered drugs that do not comply with the Trade Agreements Act (19 U.S.C. §2501 et seq.) (“TAA”).  While the VA’s prior policy prohibited contractors from offering TAA non-compliant drugs from on  a Federal Supply Schedule (“FSS”) contract, the VA’s new policy requires “that all covered drugs, regardless of county of substantial transformation, be available on a 65 I B FSS contract.”

TAA Overview

Under the TAA, the Buy American Act is waived for end products that are “substantially transformed” in so-called “designated countries”; i.e. those countries with which the U.S. is a party to bilateral and multilateral free trade agreements as well as certain other countries receiving preferential treatment (“Least Developed” and “Caribbean Basin” countries).  At the same time, the TAA prohibits the procurement of end products whose country of origin is a non-designated country (e.g., China, India, Malaysia).  The TAA has a “non-availability” exception where the end products required are not offered, or cannot be fulfilled by U.S. or designated country end products.   However, VA policy prohibited contracting officers from making non-availability determinations for FSS contracts – until now.

New Policy

The shift in policy empowers VA Contracting Officers to make individual non-availability determinations and waive TAA requirements when two hurdles are overcome (i) the offered drugs or similar drugs  are not TAA-compliant and (ii) the drug being offered is a covered drug under the Veterans Healthcare Act.  This policy change allows the VA to make available on 65 IB Schedule contracts those covered drugs formerly excluded due to the TAA non-compliant status.  Given the requirements under the new policy, it appears the VA intends to apply this non-availability exception to all covered drugs from non-designated countries, such as China and India.

Fast-Approaching Deadlines

The VA has set an aggressive timeline for implementing its new policy. The first deadline is this Tuesday– April 26, 2016.  By this date, pharmaceutical manufacturers must submit their Non-Federal Average Manufacturer’s Price (“Non-FAMP”) calculations to the VA’s Office of Pharmacy Benefits Management Services (“PBM”) for TAA non-compliant drugs.

By May 6, 2016, manufacturers currently holding VA FSS contracts must submit a Request for Modification (“RFM”) to add non-TAA compliant products to their existing FSS contracts.   Additionally, these contractors must execute a mass modification, which includes a “Trade Agreements Act Non-Availability Determination Request Letter”.  This letter requires contractors to list all non-TAA compliant covered drugs and verify that their currently marketed National Drug Codes (“NDC”) have no TAA compliant versions, including authorized generics.  The Contracting Officer may then make a non-availability determination based on this statement and its representations in the System for Award Management (“SAM”).

Manufacturers without a VA FSS contract, likely because their only covered drugs are TAA non-compliant, are required to at least enter into Interim Agreement (“IA”) by the May 6, 2016.  The purpose of the IA is to require the manufacturer to make its covered drugs available to the Government while negotiating a VA FSS contract – a process that can take several months.

All TAA non-compliant drugs must be on an existing FSS 65 IB contract or a new IA by June 6, 2016.

Impact on Manufacturers

This change in VA policy should be music to the ears of pharmaceutical companies that manufacture covered drugs in China, India and other non- designated countries.  By adding these products to VA FSS contracts, these manufacturers will have the opportunity for increased sales to various VA hospitals and other Government purchasers.

However, the VA’s ambitious deadlines may prove challenging for some manufacturers.  Manufacturers that are not already calculating Non-FAMP pricing information for TAA non-compliant drugs will need to perform these calculations right away.   Additionally, if a manufacturer prefers to dual-price, a calculation option under 38 U.S.C. 8126 that allows for the Big 4 (VA, Department of Defense, Public Health Service and Coast Guard) to be provided a lower price than other federal purchases under the FSS, it will likely require additional time and effort to negotiate the dual pricing under the FSS.  Because the new guidance provides no information on the impact of failing to make these deadlines, manufacturer should make every effort to meet these deadlines and alert the VA of its compliance efforts if a deadline may be missed.

By notice published in the Federal Register, the U.S. Trade Representative has confirmed that New Zealand has acceded to the WTO Agreement on Government Procurement and thereby, effective August 12, 2015, has become a “designated country” under the Trade Agreements Act.  Accordingly, products and services from New Zealand are now eligible to be procured under all contracts subject to the TAA, including GSA Schedule contracts.

Congress v. White House – who will win the fight?  As they duke it out on policies and legislation that will impact government contractors, our legal team will help you identify vulnerabilities as well as possible opportunities.  We will cover a variety of topics, including:

  • The New Fair Pay and Safe Workplaces Executive Order
  • Developments and trends for contractor claims and terminations
  • The changing landscape of internal investigations
  • Protecting your intellectual property
  • Cybersecurity risk management
  • And so much more!

Our keynote speaker will be Professor Steven Schooner who will discuss “ A Decade of Ethics Scandals.”

Two dates and locations:
Washington, DC on May 5-6 (for information and registration, click here)
Marina del Rey, CA on May 14 (for information and registration, click here)

The General Services Administration (“GSA”) is rolling out two modifications to its Contractor Assistance Visits (“CAVs”), in-person or virtual meetings between GSA’s Industrial Operations Analysts (“IOAs”) and GSA Schedule holders to assess compliance, identify potential problems, and test the contractor’s system controls and processes.  Tom Brady, the Director of the Supplier Management Division, GSA Office of Acquisition Management, presented on these changes during The Coalition for Government Procurement’s webinar on March 12, 2015.

First, GSA will no longer grade contractors on report cards.  GSA’s current practice is to issue a MAS Administrative Report Card following each CAV.  This grade was supposed to reflect how well a contractor was complying with its contract’s terms and conditions.  But contractors had expressed concern that some interpreted the grade more generally to contract performance.  In response to this concern, GSA will discontinue grading its contractors on report cards (and relatedly, commits to providing contractors feedback from the CAV more expeditiously). Continue Reading GSA Announces Changes in its Contractor Assistance Visits

On Wednesday, September 9th at 12 PM Eastern, join our government contracts attorneys for a webinar entitled: “Mitigating Trade Agreements Act Risks for GSA Schedule Holders.” During this 60-minute webinar, we will provide an overview of the GSA Schedule contract requirements related to the Trade Agreements Act (“TAA”), review recent enforcement actions by the government and whistleblowers against Schedule contractors for alleged violations of the TAA, and discuss how contractors can mitigate TAA non-compliance risks related to manufacturing processes and purchasing from suppliers.

Please note that Federal Publications Seminars charges a fee for this webinar. Registration information can be found here.

 

At 1:00 pm (Eastern) on January 30, 2013, Crowell & Moring attorneys Addie Cliffe, Dj Wolff, and J.J. Saulino will conduct a webinar on behalf of L2 Federal Resources entitled “Export Controls, Economic and Trade Sanctions: The Challenges and Risks.” This 90-minute webinar will provide an overview of the two primary sets of regulations governing exports: the Export Administration Regulations (“EAR”), and the International Traffic in Arms Regulations (“ITAR”). It will also cover country-specific and non-country specific regulations to describing implementing economic trade sanctions and embargoes promulgated in the interest of U.S. foreign policy and national security. In addition these regimes, and how they are likely to apply to companies with international supply chains and/or international sales, the webinar will provide practical guidance on steps companies can take to evaluate and minimize risk.

Further details and registration information are available at http://l2federalresources.com/2013/export-controls-economic-and-trade-sanctions-the-challenges-and-risks/.

L2 Federal Resources requires a registration fee for its webinars.