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Contractors looking for updates to the statutory allowable cost limits on employee compensation may be looking in the wrong place.  But what was once lost can easily be found, at least for the moment, by simply navigating to a different website.

The Cost Principles and the Compensation Cap

FAR 31.205-6(p)(4) governs the allowable compensation of contractor and subcontractor employees.  It promulgates section 702 of the Bipartisan Budget Act of 2013 (“BBA”), which set an initial limit on allowable contractor and subcontractor employee compensation costs at $487,000 per year.  “Compensation” is defined broadly to include the total amount of wages, salary, bonuses, deferred compensation, and employer contributions to defined contribution pension plans.  According to the BBA, the cap is to be adjusted annually based on the Employment Cost Index calculated by the Bureau of Labor Statistics.  The BBA repealed the prior existing formula for determining the relevant compensation cap under 41 U.S.C. § 1127 and applies to contracts awarded on or after June 24, 2014.  It also provided agencies with the authority to establish “one or more narrowly targeted exceptions” for certain specialists.

Continue Reading Hidden in Plain Sight: Where, Oh Where, Have the Compensation Caps Gone?

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On March 22, 2018, the Department of Defense (DoD), Office of the Under Secretary of Defense issued a Class Deviation letter to the heads of all Department of Defense agencies requiring, effective immediately, that every DoD agency ensure that its contracting officers implement the recommendations for enhanced post-award debriefings set forth in Section 818 of the 2018 National Defense Authorization Act (NDAA).

The direction makes clear that DoD agencies are to provide unsuccessful offerors who are given a debriefing in accordance with FAR 15.506(d) the opportunity to “submit additional questions related to the debriefing within two business days after receiving the debriefing.”  The agency will then be required to “respond in writing to the additional questions submitted by an unsuccessful offeror within five business days after receipt of the questions” and must hold the debriefing open until it “delivers its written responses to the unsuccessful offeror.”

Continue Reading DoD Implements New Enhanced Debriefing Procedures from the 2018 NDAA

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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

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Everyone can agree that professional employees should be compensated fairly and properly—both for the benefit of the employees and to ensure successful contract performance. However, a recent GAO decision could provide a loophole for agencies to forego the very evaluation designed to ensure that fair and proper compensation.

Contractors competing for work involving meaningful numbers of professional employees—and, in particular, incumbents seeking to prevent newcomers from undercutting their established professional compensation—should take note.

Continue Reading When is a Required Evaluation Not Required? A Warning for Contractors Expecting the Government to Evaluate Professional Compensation

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Crowell & Moring is hosting Government Contracts 101 in our Washington, D.C., office on Thursday, October 26, 2017.  This all-day event will last from 8:30 a.m. to 6:30 p.m. at 1001 Pennsylvania Ave, N.W., and provide an overview of the full scope of issues that government contractors face on a daily basis.  We will cover FAR, key statutes and regulations, the bid and proposal process, protests, disputes, cyber requirements, changes, claims, key compliance issues, suspension/debarment, and costs.  The course is designed for those attorneys and business personnel that may be new to government contracting and for those that may need a “refresher.” 

Training is foundational to our business, and it is a part of our Firm’s DNA.  Our founding partners regularly provided government contracts training not just for business development purposes, but also out of a sense of duty to the profession. 

Government contracting is hard.  The rules and regulations can be counter-intuitive.  And perfectly acceptable commercial business practices can be criminal violations in the government contracts setting.  Industry members deserve every opportunity to learn the rules of the road so they can thrive. 

Furthermore, in the current fiscal environment budget pressures can hit government contractors hard.  Training funds can be hard to find.  As a Chambers Band-One rated government contracts practice with more than 60 lawyers working day-in and day-out in the trenches of our industry, we feel an obligation to our profession to provide this foundational training, free of charge, to our clients and to any interested industry member who desires this knowledge.  Join us.  Come, learn, network with your peers, and enjoy a day with us. 

We hope you can join us.

Registration is available here for industry-members interested in attending.

Crowell & Moring Event Header

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Suspension and debarment practice in 2017 is very different than it was just five or 10 years ago, and it continues to evolve.  Historically active programs, such as the Department of the Air Force, show few actions initiated in the last three months, while the Environmental Protection Agency has been heavily involved in excluding contractors and awardees.  Awareness of the current activity level and preferences of relevant agency suspension and debarment offices is one key to successfully managing your relationship with key federal agencies.  But successfully navigating the current suspension/debarment landscape is often more complicated than a single agency analysis.

Continue Reading Not Your Grandfather’s Suspension & Debarment: How Contractors Can Prepare For and Defend Against Today’s Exclusions

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On January 13, 2017, the FAR Council released a final rule (available here) that: (1) prohibits agencies from contracting with entities that require employees/subs to sign internal confidentiality agreements or statements that restrict the lawful reporting of waste, fraud, or abuse; and (2) requires bidders on federal contracts to certify that they do not utilize such agreements. Starting on January 19, 2017, the rule will apply to all solicitations and contracts using fiscal year 2015 funds and subsequent fiscal year funds, unless the solicitation or contract already contains a comparable provision/clause.
Continue Reading Final FAR Rule on Internal Confidentiality Agreements: Considerations for Contractors Before Employees Sign on the Dotted Line

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The suspension and debarment regulations at Federal Acquisition Regulation (FAR) Subpart 9.4 are focused on the present responsibility of a contractor.  Yet, the records of past, inactive exclusions are available for public view in perpetuity on the System for Award Management website (SAM.gov).   In a recent article (linked here) published in BNA’s Federal Contracts Report, C&M attorneys explore this important issue.

As discussed in this article, these past records on SAM.gov implicate the present liberty interests of contractors.  Because past exclusions on SAM.gov may be accessed by anyone, contractors are facing more questions than ever about their past exclusions from outside of the federal government.  Many state and local procurement agencies as well as banks and financial institutions are taking the time to review SAM.gov before granting opportunities or financial assistance to individuals and companies.  Accordingly, the intent of FAR Subpart 9.4 is stretching far beyond its purpose, which is to prevent contractors from receiving new contracts or federal financial assistance if they are not “presently responsible.”  “Present responsibility” is not defined in FAR subpart 9.4, but this subpart explicitly states that exclusions do not exist to punish contractors for past misdeeds.  Thus, it may be only a matter of time until a contractor prevails on a due process challenge to SAM.gov archives, as the reputational harm of these records continues to grow. 

 

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Today, the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA) (collectively, the “FAR Council”) proposed amendments and revisions to the Federal Acquisition Regulation (FAR) that would require some government contractors to indicate whether they publicly disclose greenhouse gas (GHG) emissions and/or quantify corporate GHG reduction goals. Comments are due by July 25, 2016.

Click to read the full analysis on Crowell.com.

 

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Companies of all sizes are increasingly subject to the practical and legal implications of today’s cybersecurity environment, and contractors are no exception.  On May 26, 2016, at 11:00 AM Eastern, Crowell & Moring attorneys David Bodenheimer, Evan Wolff, and Kate Growley will lead a discussion highlighting some of the past year’s most significant cyber contracting developments, what trends are worth watching for the future, and how contractors can craft a comprehensive approach to get ahead of it all.  Specific topics include:

  • Revisions to DFARS 252.204-7012, Safeguarding Covered Defense Information and Cyber Incident Reporting
  • Publication of FAR 52.204-21, Basic Safeguarding of Contractor Information Systems
  • Managing the “Internet of Things”
  • Approaches to cyber lifecycle management, including compliance, supply chain risk, and information sharing

Check back in the coming days for more updates as we count down to OOPS on May 25th (in DC)! You can also check for updates on Twitter using the hashtag #cm2016oops, and at crowell.com/OOPS.

Click here to register for OOPS on May 25-26th in Washington, DC.

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