On November 4, 2021, the FAR Council issued a final rule replacing the FAR definition of “commercial item” with bifurcated definitions for “commercial product’’ and “commercial service.” The rule implements Section 836 of the National Defense Authorization Act for fiscal year 2019, and is also consistent with recommendations from the Section 809 Panel to implement
Potential Federal Government Shutdown: Crowell & Moring Identifies and Answers Common Questions
Congress has not passed crucial funding bills for the start of FY 2022 and, on September 28, 2021, Treasury Secretary Yellen informed Congress that Treasury now estimates that the Federal government will reach the debt ceiling by October 18. As a result, we again face the prospect of a government shutdown for lack of funding. While Congress may yet take action, agencies across the government are likely to begin taking steps to prepare for a shutdown, and contractors should do so as well.
Although the issues that contractors would face under a government shutdown may vary with the circumstances of individual contracts, there are a number of common considerations. Based on our experience under prior Federal government shutdowns, these include:
- Where Is the Money? For incrementally funded contracts, a “shutdown” situation is likely similar to those experienced at the end of any fiscal year when there is a “gap” between appropriations. Contractors will need to consider the implications of the various standard clauses (Limitation of Costs, Limitation of Funds, Limitation of Government Obligations) that may affect the government’s obligation to pay costs in excess of the amounts already obligated to their contracts. Of particular concern will be the standard provisions in those clauses that may limit the government’s liability for termination costs in the event that the contracts are eventually terminated without new funding. Contractors will need to decide whether to continue to perform or to take the actions authorized when funding is insufficient to pay for anticipated costs. But for contracts that are fully funded or that have incremental funding sufficient to cover all anticipated costs, including termination costs, a shutdown would not normally create new funding risks.
Laches Defense No Longer Available in ASBCA Appeals
In Lockheed Martin Aeronautics Company, ASBCA No. 62209 (a C&M case), the Board granted Lockheed Martin’s motion for summary judgment on the issue of whether the Government can assert laches as an affirmative defense to a Contract Disputes Act claim. In a case of first impression, Lockheed Martin argued that the affirmative defense of
CARES Act Section 3610 Relief Extended Until September 30, 2021
The American Rescue Plan Act of 2021 (the Act), signed into law by President Biden on March 11, 2021, extends Section 3610 of the CARES Act (previously discussed here, here, and here) through September 30, 2021. The extension allows federal agencies to reimburse contractors for six additional months of paid-leave costs if
National Defense Authorization Act for Fiscal Year 2021: Need-to-Know Provisions for Government Contractors
On December 11, 2020, Congress presented to President Trump H.R. 6395, National Defense Authorization Act for Fiscal Year 2021. On December 23, 2020, President Trump vetoed the bill. Subsequently, the House voted on December 28, 2020 and the Senate voted on January 1, 2021 to override the veto.
This Act contains numerous provisions that
DoD OIG Audit Assesses Implementation of Section 3610 Relief Under CARES Act
On December 9, 2020, the Department of Defense Office of Inspector General (DoD OIG) released its Audit of Department of Defense Implementation of Section 3610 of the Coronavirus Aid, Relief, and Economic Security Act. The audit assesses the DoD’s issuance of relief under Section 3610, which authorizes certain agencies to reimburse contractors for any
New DoD Guidance Clarifies, and Restricts, Recovery under § 3610
On August 18, 2020, the Acting Principal Director for Defense Pricing and Contracting (DPC) issued updated guidance regarding contractor and subcontractor reimbursement of paid leave costs under the CARES Act § 3610, including two key Class Deviations, both effective immediately. First, it issued Revision 1 to Class Deviation 2020-O0013, which revises and supersedes
Coronavirus Update: White House Delegates Title III DPA Authority to U.S. International Development Finance Corporation
On May 14, the President issued an Executive Order (EO) delegating funding and loan authority under Title III of the Defense Production Act (DPA) to the U.S. International Development Finance Corporation (DFC) to support domestic production of strategic resources to respond to the COVID-19 outbreak and strengthen domestic supply chains. The DFC’s loan authority
Coronavirus Update: Updated Section 3610 Guidance
Agencies continue to release and refine Section 3610 billing guidelines. There continue to be substantive differences between agencies, creating compliance challenges for contractors. Crowell & Moring continues to track the latest Section 3610 billing guidance. Click here to view the updated table, current as of May 1, 2020.
Coronavirus Update: DPA Authority Delegated to Department of Agriculture to Combat Food Supply Chain Threat
On April 28, the President signed an Executive Order on Delegating Authority Under the DPA with Respect to Food Supply Chain Resources During the National Emergency Caused by the Outbreak of COVID-19. The new EO delegates to the Department of Agriculture (“the Department”) Defense Production Act (DPA) Title I priorities and allocation authority with