Last week, the Federal Register published President Biden’s Executive Order on Federal Research and Development in Support of Domestic Manufacturing and United States Jobs  (Executive Order), which requires federal agencies  to emphasize domestic manufacturing in research and development agreements, contracts, and plans. Continue Reading “Made” in America redux: President Biden Proposes Leveraging Federal Research Funding to Further Promote the Domestic Manufacturing Base
Jonathan M. Baker is a partner in Crowell & Moring's Washington, D.C. office. He practices in the Government Contracts Group.
Jon advises clients on a wide array of government contracts legal issues, including both federal and state bid protests, prime-sub disputes, government contracts due diligence and transactions, regulatory compliance, and contract terminations. Jon's practice has a notable emphasis on technology-related issues, including counseling clients in the areas of patent and data rights, responding to government challenges to technical data and computer software rights assertions, and litigating cases involving complex and cutting edge technologies. Jon also provides guidance on national security matters, such as National Industrial Security Program Operating Manual compliance and facility and security clearance matters. In addition, Jon has advised clients on local government contract negotiation, internal and government investigations regarding potential False Claims Act issues, and export violations. Jon is also actively involved in the firm's pro bono program, having litigated prisoner neglect, parental rights termination, and landlord-tenant matters.
On December 19, 2022, DoD issued a DFARS proposed rule that seeks to (1) implement the data-rights portions of the May 2, 2019 Small Business Innovation Research Program and Small Business Technology Transfer Program Policy Directive (SBIR/STTR Policy Directive), and (2) impose significant changes to technical data and computer software marking requirements. The SBIR/STTR portion of the proposed rule follows DoD’s advance notice of proposed rulemaking issued on August 31, 2020 (see 85 FR 53758) and incorporates the eight written public comments that DoD received. The proposed changes to marking requirements go beyond the SBIR/STTR Policy Directive and respond to the Federal Circuit’s decision in The Boeing Co. v. Secretary of the Air Force, 983 F.3d 1321 (Fed. Cir. 2020). Continue Reading DFARS Proposed Rule on SBIR/STTR Data Rights and the Marking of Unlimited Rights Data
On December 1, 2022, Department of Defense (DoD) Secretary Lloyd J. Austin III announced the establishment of the DoD Office of Strategic Capital (OSC). The mission statement of the OSC is to build an “enduring technical advantage” for the United States by helping partner contractors with private investment to develop national security critical technologies, including those related to advanced materials, next-generation biotechnology, and quantum science. OSC will coordinate with existing organizations such as the Defense Advanced Research Projects Agency (DARPA) and the Defense Innovation Unit (DIU), which promotes acceleration of the military use of commercial technologies.
The OSC intends to offer what it characterizes as “patient” extended-term capital to help contractors obtain financing between the early laboratory-testing and prototyping phases and the full-scale development of products that can be used by the DoD warfighter. In addition to traditional vehicles like contracts and grants, this investment will likely take the form of loans and loan guarantees. Continue Reading Department of Defense Establishes Office of Strategic Capital to Enhance Investment in National Security Critical Technology
On September 30, 2022, President Biden signed the SBIR and STTR Extension Act of 2022 (the Act), reauthorizing the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR), and six pilot programs for three years, until September 30, 2025. The Act includes new due diligence and reporting requirements, award restrictions, and clawback provisions related to national security risks—particularly regarding firms with ties to China, Russia, North Korea, and Iran—and increased minimum performance standards for multiple SBIR/STTR award winners. The passage and signing of the Act averted a potential lapse of these programs, which were set to expire the day of the reauthorization. Continue Reading Congress Passes Last Minute Three-Year SBIR/STTR Reauthorization Including New National Security-Related Restrictions and Requirements
On Friday September 9, 2022, the Principal Director for DoD Defense Pricing and Contracting (DPC) issued a Memorandum titled “Managing the Effects of Inflation with Existing Contracts.” The Memorandum provides guidance to Contracting Officers about the range of approaches available to address the effects of inflation on the Defense Industrial Base. Of note, it highlights two paths contractors may pursue to recover for inflation under fixed-price contracts.
First, the Memorandum notes that the ability to recognize cost increases is largely dependent on contract type, asserting that “[c]ontractors performing under firm-fixed-price contracts that were priced and negotiated before the onset of the current economic conditions generally bear the risk of cost increases.” This is similar to guidance DPC issued in May encouraging Contracting Officers to consider including economic price adjustment (EPA) clauses in new contracts but expressing skepticism about contractors’ ability to recover for inflation under existing fixed-price contracts. However, the new Memorandum allows that “there may be circumstances where an accommodation [such as schedule relief or amended contract requirements] can be reached by mutual agreement of the contracting parties, perhaps to address acute impacts on small business and other suppliers.” Continue Reading DoD Will Consider Contract Adjustments Addressing Inflation
On June 6, 2022, President Biden issued a White House Fact Sheet (“Fact Sheet”) outlining President Biden’s “Bold Executive Action to Spur Domestic Clean Energy Manufacturing” along with five related Defense Production Act (“DPA”) Presidential Determinations (“Presidential Determinations”) and a Declaration of Emergency and Authorization for Temporary Extensions of Time and Duty-Free Importation of Solar Cells and Module from Southeast Asia (the “Declaration”). The Fact Sheet states the President is (1) authorizing use of the DPA to accelerate domestic production of clean energy technologies; (2) encouraging domestic solar manufacturing capacity through the use of master supply agreements with enhanced domestic preferences; and (3) creating a two-year trade regulation bridge as domestic manufacturing for solar products scales up. The White House stated that these actions are being taken to lower energy costs, reduce risks to the power grid, and mitigate climate change. The Department of Energy (“DOE”) also released a statement on June 6 about the DPA Presidential Determinations which describes DOE’s concerns with regard to each material or technology for which a determination was issued. The statements made by the White House and DOE also make clear that these actions to employ the DPA are part of the Administration’s broader “all of government” approach to addressing Environmental Justice, with the intention to “strongly encourage projects with environmental justice outcomes that empower the clean energy transition in low income communities historically overburdened by legacy pollution.”Continue Reading President Biden Employs Defense Production Act and Tariff Act in Domestic Clean Energy Manufacturing Push
On April 28, 2022, the DoD issued a final rule that, effective immediately, requires the government to treat a contract previously awarded using FAR part 12 procedures as a prior commercial item determination (“CID”) for the acquired product or service, unless the head of contracting activity determines that the prior use of FAR part 12…
In an effort to boost the domestic mining industry for critical minerals, on March 31, 2022, President Biden issued Presidential Determination 2022-11, the Memorandum on Presidential Determination Pursuant to Section 303 of the Defense Production Act of 1950, as amended (“Presidential Determination”). The Presidential Determination states that sustainable and responsible domestic mining, beneficiation, and…
On March 17, 2022, the National Institute of Standards and Technology (“NIST”) published an initial draft of its Artificial Intelligence (AI) Risk Management Framework (“AI RMF”) to promote the development and use of responsible AI technologies and systems. When final, the three-part AI RMF is intended for voluntary use and to improve the ability to…
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