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The Defense Contract Audit Agency (“DCAA”) recently made public its Fiscal Year 2017 Report to Congress, which, among other things, provides an update on incurred cost audits.  Specifically, the report explains that DCAA:

  • Closed “6,786 incurred cost years” using a variety of methods, namely reports and memos, but also for other reasons (e.g., per the FY 2016 NDAA, DCAA was prohibited “from providing audit support to non-DoD agencies”);
  • Sustained audit exceptions for incurred costs audits 28.6% of the time;
  • Reduced the backlog related to incurred cost audits “to an average age of 14.3 months;” and
  • Is “on track to eliminate the backlog by the close of FY 2018” as it now has “under 3,000 incurred cost years in [such] backlog….”
  • “[W]ill be current on incurred cost based on a two-year inventory of audits” by FY 2018 and “will move to one year of inventory as required” in the FY 2018 NDAA.

Continue Reading The End is Near: DCAA Projects End of Incurred Cost Backlog by FY 2018

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.

Continue Reading Steel and Aluminum Tariffs: Recovery and Risk Reduction for Federal Contractors

Crowell & Moring is pleased to offer a no-cost review of common compliance issues that can drive down sales price or increase borrowing costs for emerging government contractors, as well as prevent purchasers from receiving full value for their investments.  Government contractors face a long road to sale, fundraising, and post-acquisition integration – these processes can be derailed easily by compliance missteps, recordkeeping problems, or a multitude of other issues that may not be top-of-mind for sellers and even some purchasers.  Once diligence begins, addressing these issues becomes significantly more expensive and problematic.

At Crowell & Moring, we believe in long-term strategic partnerships with our clients and stand ready to proactively assist with an analysis of potential compliance issues very early in the sale/fundraising process to avoid diligence or post-acquisition surprises.  With knowledge across the whole range of government contract issues, we are well suited to evaluate a company’s government business  and identify non-obvious (but very real) areas of risk.

Continue Reading No Cost Compliance Check-Up for Government Contractors

Contractors that use a fiscal year ending 12/31 submit their annual cost submissions in June of the following year.  For 2010 incurred cost submissions (ICS) submitted in June 2011, many contractors may receive affirmative claims from the Government seeking to disallow some or all of those incurred costs, because the Government has a 6-year statute of limitations to bring such claims (i.e., June 2017).  Due to DCAA’s audit backlog, COs may receive Audit Reports right around the SOL deadline, and issue Final Decisions in order to avoid missing that deadline.  Contractors that do receive Final Decisions disallowing costs should be aware of the 90 day limit to appeal the Final Decision, whether they intend to negotiate or litigate.

Please join us on June 27, 2017 for a lunchtime panel discussion regarding “Government Contracts M&A in 2017: Challenges and Opportunities on the Horizon.”

During this program, moderated by Peter Eyre,  a panel of industry, private equity, law firm, and government representatives will tackle key considerations for buyers and sellers to take into account when structuring and executing M&A transactions in the government contract marketplace, including: due diligence “hot spots” and effective risk management; specific considerations regarding transactions involving for foreign entities; and unique requirements when acquiring or selling companies in the defense and intelligence fields.

Panelists:

  • Mike Molino, SVP, Corporate Strategy, Leidos
  • Tim Garnett, Managing Director, Avascent
  • David Wodlinger, Partner, Arlington Capital
  • Marc Marlin, Managing Director, KippsDeSanto & Co.
  • Addie Cliffe, Partner, Crowell & Moring

 

On June 14, we presented a webinar titled “Frequently Asked Questions About Requests for Equitable Adjustment and Contract Disputes Act Claims.” The webinar featured some of the most common questions we encounter in the field regarding CDA claims and REAs, as well as a discussion of procedural, substantive, and business considerations that go into the decision to assert a claim or an REA.

The audience Q&A featured a remarkable 30 questions during the 1-hour webinar, so be on the lookout for a “sequel” Claims Recovery v2.0 webinar in the coming weeks, where we will address additional FAQs and new questions that attendees may submit in advance.

Finally, because part of the discussion focused on identifying and pursuing claims, attached here is a description of the Crowell & Moring Performance Review Offering, which describes available training and diagnostic reviews regarding recovery opportunities for clients in the government contracting industry.

Join us for a webinar titled “Government Contracts Recovery: ‘Frequently Asked Questions’ About Requests for Equitable Adjustments and CDA Claims.”  During the 60-minute webinar, a team of claims professionals from C&M’s Government Contractor Recovery Practice will address some FAQs that arise in the context of contractor claims / REAs, and solicit audience questions, as we delve into some of the procedural, substantive, legal, and business considerations that factor into whether to assert a claim or an REA.

We hope you can join us on Tuesday, June 14th, 2017 at 1 PM Eastern.  To register for this event, please click here.

 

Please join us for an evening of conversation and cocktails while our panelists from the commercial, industrial, government contracting, higher education, and insurance arenas discuss critical emerging cyber security issues.  From the dark web, to cyber pitfalls, cybersecurity policy and legislation, and how to ensure a secure future, our panel discussion will explore the rapidly expanding world of cybersecurity and debate best practices for protecting yourself, your clients, and your business.

When: Thursday, May 18, 2017

Registration: 4:30PM

Program 5:00-6:45PM

Cocktails: 6:45-8:00PM

Address:  1001 Pennsylvania Avenue, NW

         Washington, DC 20004

For more information, register here.

Join us today for our webinar Building a Border Wall: Opportunities, Contractual Risks, and Business Considerations. The Trump administration published two contract solicitations for the design-build of a “border wall” between the U.S. and Mexico. The RFPs (linked here and here) contemplate a multiple-award, multiple-phase approach for acquiring prototypes and, eventually, full construction.  A team of Crowell & Moring government contracts and labor & employment attorneys will discuss key nuances of the solicitations, opportunities, and major contractual risks that may accompany the Trump administration’s large-scale border project. Please click here to register.

The Armed Services Board of Contract Appeals published its FY16 Report of Transactions and Proceedings, which provides statistics regarding the adjudication of appeals between contractors and the Army, Navy, Air Force, Corps of Engineers, DLA, DCMA, CIA, NASA, other Defense agencies, and the Washington Metropolitan Area Transit Authority. This year’s report once again reflects the Board’s impressive success at resolving matters via alternative dispute resolution.  In total, 93% of ADRs concluded in FY16 – including binding ADR, non-binding ADR, and ADR of undocketed appeals – were successfully resolved.  The report also reflects a slight uptick in successful appeals at the Board, noting that the appellant prevailed in 57% the appeals decided in the merits (up from 53% in FY15).