Federal contractors must be registered on SAM.gov to be eligible for award of federal contracts. Failure to do so can have significant consequences, as the recent U.S. Court of Federal Claims (CFC) decision in Myriddian, LLC v. United States, No. 23-443 makes clear.
In Myriddian, the Centers for Medicare & Medicaid Services (CMS)
As of the morning of March 8, 2023, SAM.gov is experiencing an unexpected outage and the system also appears to be generating false emails. Until this issue is resolved, companies and administrators should consider refraining from clicking on any links or email addresses within any SAM.gov email received until the system is confirmed as fully
On February 28, 2023, the Commerce Department released the first Notice of Funding Opportunity (“First NOFO”) under the recently enacted CHIPS and Science Act (CHIPS Act), P.L. 117-167. The First NOFO seeks applications for assistance—including direct funding, loans, and loan guarantees—for projects to construct, expand, or modernize commercial semiconductor facilities.
In addition, the Commerce Department’s CHIPS Program Office announced that it will issue two additional NOFOs this year—a second NOFO for semiconductor materials and manufacturing equipment facilities in the spring of 2023, and a third NOFO for research and development facilities in the fall of 2023.
The First NOFO is focused on the fabrication of leading-edge, current-generation, and mature-node semiconductors and includes both front-end wafer fabrication and back-end assembly, testing, and packaging. According to the CHIPS Program Office’s webinar on February 28, the Commerce Department has begun accepting statements of interest for all potential applicants. It will begin accepting full applications on a rolling basis beginning March 31, 2023 for leading-edge manufacturing facilities, and June 26, 2023 for current-generation, mature-node, or back-end manufacturing facilities.
The National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023, signed into law on December 23, 2022, makes numerous changes to acquisition policy. Crowell & Moring’s Government Contracts Group discusses the most consequential changes for government contractors here. These include changes that provide new opportunities for contractors to recover inflation-related costs, authorize new programs for small businesses, impose new clauses or reporting requirements on government contractors, require government reporting to Congress on acquisition authorities and programs, and alter other processes and procedures to which government contractors are subject. The FY 2023 NDAA also includes the Advancing American AI Act, the Intelligence Authorization Act for FY 2023, and the Water Resources Development Act of 2022, all of which include provisions relevant for government contractors.
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.
On September 8, 2022, the Department of Defense (“DoD”) issued Class Deviation 2022-O0009 (the “Deviation”) immediately authorizing contracting officers to allow active registration in the System for Award Management (“SAM”) within 30 days of contract award or three days prior to submission of the first invoice (whichever comes first) rather than at the time of award—provided the contractor can prove it has initiated or attempted to start the SAM registration process. The Deviation is in effect through October 31, 2022 unless rescinded or extended.
The SAM registration process, which changed in April 2022 when GSA switched from the DUNS number to the Unique Entity Identifier (“UEI”), has suffered from significant delays and system errors. These system challenges continue, and SAM incident tickets continue to take weeks to process in many cases. With this Deviation, DoD joins a number of other agencies that have already issued guidance for managing SAM delays that may affect contracts or grants.
On August 25, 2022 the Defense Acquisition Regulations System published two new DFARS clauses prohibiting the award of covered Department of Defense (“DoD”) contracts to contractors that leverage resources in China unless those resources are disclosed. Implementing Section 855 of the FY22 National Defense Authorization Act and effective immediately, the clauses are DFARS 252.225-7057 “Preaward Disclosure of Employment of Individuals Who Work in the People’s Republic of China” and DFARS 252.225-7058 “Postaward Disclosure of Employment of Individuals Who Work in the People’s Republic of China.” These clauses will be incorporated into DoD solicitations and contracts with an estimated value over $5 million unless a senior procurement executive waives the disclosure requirements due to national security interests. The requirements do not apply to contracts for commercial products and commercial services, including contracts for commercially available off-the-shelf (“COTS”) items, or to contracts at or below the simplified acquisition threshold (currently $250,000).
Continue Reading DoD Rule on Reporting Employees in China Published and In Effect This Week
President Biden will soon sign into law the Inflation Reduction Act (IRA), which provides $750 billion in funding and major federal policy changes impacting the U.S. energy, environment, healthcare and tax sectors. On August 7, 2022, the IRA passed the U.S. Senate by an all-Democrat 50-50 party line vote, with Vice President Harris breaking the tie and ensuring passage. On August 12, 2022, the IRA passed the U.S. House by a vote of 220 to 207. The President’s signature, will make the bill law, and allow President Biden, U.S. Senate Majority Leader Chuck Schumer (D-NY), and U.S. House Speaker Nancy Pelosi (D-CA) to claim a major victory while making progress on a portion of the President’s Build Back Better agenda just three months before the mid-term elections on November 8, 2022.
The Crowell and Moring LLP and Crowell & Moring International (CMI) teams have put together this Client Alert with two main purposes. The first is to provide a summary of the highlights of the bill, which is included in Section I, and the second is to provide a more detailed section-by-section review of the bill, which is provided in Section II.
Continue Reading President Biden To Sign New Inflation Reduction Act
Last week, the United States Congress passed the $280 billion CHIPS and Science Act of 2022 (CHIPS Act)[1] to bolster domestic semiconductor and microchip manufacturing in the United States. The bipartisan legislation will facilitate federal investments in the form of grants, loans, and loan guarantees to eligible entities and create significant business opportunities for companies in the U.S. The legislation also provides funding and new programs to boost advanced workforce training and research and development in a range of scientific and technology areas. The legislation now awaits the signature of President Biden, who hailed its passage as “exactly what we need to be doing to grow our economy right now.”
The legislation seeks to reverse the decades-long decline in U.S. microchip and semiconductor manufacturing and counter the rise of China as a source for technologically advanced manufacturing processes and products. By boosting domestic manufacturing and supply chains, the legislation also aims to relieve the global semiconductor shortage that has plagued manufacturers of a diverse set of products – everything from automobiles to children’s toys – and has contributed to the nation’s supply chain woes for more than two years.
The cornerstone of the legislation is $52 billion that will be allocated to the U.S. Department of Commerce semiconductor initiative to develop and expand domestic manufacturing capacity. Implementation of that program was already underway at the Department of Commerce[2], following Congressional authorization in the Fiscal Year 2021 National Defense Authorization Act (FY21 NDAA), and the legislation passed last week now provides the critical funding needed to commence direct federal incentives for the construction, expansion, or modernization of semiconductor manufacturing facilities.
The General Services Administration (GSA) transition from the Dun & Bradstreet (D&B) Data Universal Number System (DUNS) to the Unique Entity Identifier (UEI), which took effect on April 4, 2022, has faced challenges. Substantial verification and validation delays continue, agencies have had to issue guidance for the management of SAM delays, and even Congress is showing concerns.
According to the Federal Service Desk (FSD), GSA requires entities to submit new validation documentation, despite the years of submissions to Dun & Bradstreet, because data rights limitations prevent SAM.gov from using previously validated data.
Continue Reading SAM Transition to UEI Plagued with Registration Processing Delays