Following the March 19, 2020 guidance issued by the Department of Homeland Security’s Cybersecurity and Infrastructure Agency (CISA) on “essential” critical infrastructure workers during COVID-19, the Department of Defense (DoD) issued a memorandum today reiterating that the Defense Industrial Base (DIB) is identified as a critical infrastructure sector by DHS, and that those who
New Rules Combating Trafficking in Counterfeit and Pirated Goods Impact E-Commerce
On January 31, 2020, the Trump administration issued an executive order cracking down on U.S. businesses that import directly or facilitate the import of counterfeit or pirated goods, illegal narcotics and other contraband. The order, entitled “Ensuring Safe & Lawful E-Commerce for US Consumers, Business, Government Supply Chains and Intellectual Property Rights,” directs
Federal Circuit Confirms Qualification as a “U.S.-Made End Product” under the TAA, Does Not Require Substantial Transformation in the U.S.
Today, in Acetris Health, LLC v. United States, the Federal Circuit held that a pharmaceutical manufactured in the United States qualified for sale, under the TAA, to the Department of Veterans Affairs even though the active pharmaceutical ingredient (API) came from a non-designated country, India. In reaching this decision, the court questioned, without deciding,
Will the Procurement Process Change in 2018? Read “Government Contracts: Will Purchasing Be Streamlined?” – Part of Crowell & Moring’s 2018 Regulatory Forecast
Crowell & Moring has issued its “Regulatory Forecast 2018: What Corporate Counsel Need to Know for the Coming Year.”
The section focusing on government contracts, “Will Purchasing Be Streamlined?” provides an overview of how the procurement process might be made more efficient, and this time, government contractors might be able
DOJ Issues New Guidance on the Evaluation of Corporate Compliance Programs
On February 8, 2017, the Department of Justice Fraud Section posted a new guidance document on its website entitled, “Evaluation of Corporate Compliance Programs” (“Compliance Guidance”). This Compliance Guidance, comprised of a number of topics and questions, comes a little over a year after the Fraud Section hired Hui Chen as its resident compliance expert. Tapping into her experience as both a prosecutor and a compliance professional at several large multinational companies, Ms. Chen has commented that an effective compliance program requires a whole-company commitment, and has emphasized the importance of leadership and key stakeholders in the compliance process.[1] Her vision is evident in the Fraud Section’s recently released Compliance Guidance, which provides some insights into the mindset of prosecutors tasked with corporate investigations.[2] The Compliance Guidance itself references two of the ten “Filip Factors,”[3] an enumerated set of factors used by prosecutors in making charging decisions related to corporate entities. Although the Compliance Guidance cautions that the Fraud Section does not use a “rigid formula” to assess a company’s compliance program, the guidance provides a detailed list of compliance-focused sample topics and questions that the Fraud Section believes are relevant to its analysis.
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Trump Administration Seeks to Reduce Regulatory Burdens
Continuing his trend of fulfilling the promises set forth in his Contract with the American Voter, President Trump, on January 30, 2017, issued an Executive Order mandating the elimination of at least two existing regulations for every new regulation issued. In particular, the order explains that “whenever an executive department or agency…publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.” In this way, the Administration intends to offset “any new incremental costs associated with new regulations….” Notably, however, the definition of regulation does not include: (1) “regulations issued with respect to a military, national security, or foreign affairs function of the United States”; (2) “regulations related to agency organization, management, or personnel;” or (3) “any other category of regulations exempted by the Director.”
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Trump’s Ethics Executive Order More Concerned with Post-Government Employment Activities
On Saturday, January 28, President Trump issued an Executive Order setting forth the ethics regulations governing current and future executive agency appointments, which is both more restrictive and less restrictive than the 2009 Obama Executive Order addressing the same issue. Specifically, and with respect to the former, President Trump’s order bans all executive agency appointees from engaging in “lobbying activities” with respect to the particular agency in which the appointee served for a period of five years after leaving the Administration, and further prohibits such appointees from lobbying on behalf of a foreign government or political party during the remainder of their lifetimes (if such activities would require registration “under the Foreign Agents Registration Act of 1938”). See §§ 1.1, 1.4. These two prohibitions were absent from the Obama-era counterpart and mirror two of Trump’s promises outlined in his Contract with the American Voter.
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OGE Finalizes Rule Regarding Solicitation and Acceptance of Gifts for Executive Branch Employees
On November 18, 2016, the Office of Government Ethics (OGE) issued a final rule revising the Standards of Ethical Conduct for Employees of the Executive Branch (“Standards”) applicable to the solicitation and acceptance of gifts from outside sources. See 5 CFR § 2635. The final rule imposes a duty to decline otherwise permissible gifts when the appearance of impropriety is present, adds new examples of how to apply the rules, codifies previous interpretations of the gift rule, and retains the $20 de minimis exception (despite pushback in comments to the proposed rule to raise the standard commensurate with inflation. ) Although Government employees are the primary subject of the final rule, the changes will have a direct impact on how contractors, referred to as “prohibited sources” can interact with Government officials. It is important for government contractors to understand that being implicated by a Government official’s violation of these Standards can lead to various consequences, such as facing public embarrassment, a tarnished reputation in the marketplace, suspension and debarment, or penalties for violating the bribery or illegal gratuities statutes.
The rule becomes effective on January 1, 2017.
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Tough (Tax) Break: Federal Tax Delinquency and Felony Convictions Could Bar Corporations from Contract Award
When assessing whether a contractor is eligible for award, contracting officers are required to conduct a meaningful present responsibility determination using the factors contained in FAR 9.1. However, a final rule issued by the FAR Council on September 30, 2016 has inserted a wild card into the process—the agency suspension and debarment official (SDO).
The final rule adopts an interim rule without change, which amends the FAR to establish the following representation and certification requirements:
- Representation (FAR 52.209-11): Any corporation responding to a federal solicitation must represent whether it: (1) has any unpaid federal tax liability that has been assessed and is not being appealed or paid in a timely manner; or (2) has a felony conviction for a violation under any federal law within the preceding 24 months. There is no de minimus amount for reporting tax delinquencies. Consistent with the Consolidated and Further Continuing Appropriation Acts, an affirmative response to either prong would create an automatic exclusion that precludes the award of federal contracts in a “shoot first, ask questions later” fashion.
- Certification (FAR 52.209-12): Corporate offerors must certify to tax matters contained in FAR 52.209-12(b) when responding to certain solicitations where the resultant contract (including options) may have a value greater than $5 million. If applicable, contractors must ensure that their certifications are accurate; otherwise additional liability could arise for the submission of false statements.
Fastest 5 Minutes, The Podcast Gov’t Contractors Can’t Do Without (Sep. 30)
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 partners David Robbins and Lorraine Campos and includes updates on the Transactional Data Rule Pilot Program,