On Monday, August 13, 2018, President Trump signed into law the H.R. 5515, the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (FY 2019 NDAA), the earliest an NDAA has been signed in over a decade. The FY 2019 NDAA includes several provisions relevant to contractors, including replacing the definition of “commercial item” with “commercial product” and “commercial services,” discouraging the use of lowest price technically acceptable contracting, and a clause designed to accelerate payments to small businesses.
On March 1, the President announced his intention to impose tariffs of 25% on all imported steel and 10% on all imported aluminum. A more formal announcement of the tariffs is expected in the coming week and, while many might have been surprised by the timing of the President’s initial statement, it came after a 10-month process of investigation by the U.S. Department of Commerce, culminating with its January 2018 recommendation for tariffs or quotas to protect U.S. producers. The Commerce Department reports are available here and here.
When finalized, these tariffs could have significant impacts on contractors across a range of industries, increasing costs of performance and restricting available supply. Domestic prices are expected to rise, and foreign suppliers may turn their focus to other markets. Supply disruptions are possible, particularly in the short term. To protect themselves, federal contractors who manufacture or use products with steel or aluminum should examine existing contracts, re-evaluate bids being developed, and consider revisions to standard contract terms.
This week’s episode covers commercial items and the 809 report, and is hosted by Peter Eyre, Chris Haile, and Elizabeth Buehler. 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.
Many companies who work with government agencies are concerned this week as several news outlets have run stories about contract and grant “freezes” at the Environmental Protection Agency and potentially at other agencies. The new administration has provided few details about the freezes, their objectives, the programs affected, or whether there are more to come. But, in the case of the EPA, it appears to be a temporary agency-wide suspension of new contract and grant awards. It remains uncertain whether (or how many) other agencies may follow suit. While broad-brush freezes might not last long, now is a good time to consider your business and how you can manage through freezes and disruptions of various types that might impact contractors.
Even in the absence of details, there are common-sense steps that potentially affected contractors and awardees can consider to prepare for any freezes, and to protect themselves should a freeze impact their business. We highlight some of the important steps below, and many will be familiar to contractors impacted by Sequester-era budgets.
On Thursday, November 19, Crowell & Moring attorneys will discuss using contractor claims as a recovery mechanism under U.S. Government contracts on WFED radio. Listen in at 12:30 pm EST as these practitioners discuss how contractors can use claims as part of an overall strategy to ensure that both parties comply with contract terms and conditions when issues like government-directed changes and delays come up during the course of a project.
At 1 p.m. (Eastern) on Wednesday, May 16, 2012, Crowell & Moring government contracts attorneys Chris Haile and Brian Tully McLaughlin will be conducting a webinar entitled “Government Contract Changes: How They Impact Your Bottom Line” on behalf of L2 Federal Resources. During this 90-minute webinar, Chris and Tully will address common types of changes to government contracts – both formal and informal – and how to avoid the costly but common mistakes many contractors make when dealing with these changes.
Details about the webinar and on-line registration are available at http://l2federalresources.com/2012/government-contract-changes-recognizing-the-changes-that-can-collapse-your-bottom-line/.
Please note that L2 Federal Resources requires a registration fee for its webinars.