government contractors

Photo of J. Chris HailePhoto of Per MidboePhoto of Alexandra Barbee-Garrett

Concerns about the federal debt limit have simmered since the Government reached the limit in January, but things are coming to a boil with the Treasury Department’s confirming that, as early as June 1, “extraordinary measures” may be insufficient to prevent the U.S. from defaulting on its obligations. A default would be unprecedented, creating uncertainty about how the Administration will proceed. It is important, therefore, that contractors understand the circumstances and be prepared to respond effectively to a range of scenarios.

What is the Federal Debt Limit?

The federal debt limit is the maximum amount of money that Congress, by statute, permits the Treasury to borrow.  When Treasury reached this borrowing limit in January 2023, it began taking “extraordinary measures” to keep paying the federal government’s bills, but those extraordinary measures can only temporarily stave off default.  Once the federal government’s cash on hand is no longer sufficient to pay its bills despite those extraordinary measures, the U.S. could begin defaulting on its payment obligations.  Continue Reading Debt Limit Default

Photo of Nicole Owren-WiestPhoto of Erin RankinPhoto of Catherine Shames

In Voxtel, Inc., ASBCA No. 60129 (March 9, 2023), the Armed Services Board of Contract Appeals (ASBCA) issued a decision that presents a primer on the resolution of indirect cost rate disputes.  The ASBCA granted the contractor’s appeal in part, finding that its claimed executive compensation and independent research and development (IR&D) costs were allowable, but that certain rental costs related to the “fit-up” of a leased facility were unallowable.

The Defense Contract Audit Agency (DCAA) performed “adequacy” and “nomenclature” reviews of Voxtel’s indirect cost rate proposals (or incurred cost proposals, “ICPs”) for fiscal years 2007 to 2009, but did not conduct audits.  The Contracting Officer (CO) then issued a final decision unilaterally setting indirect rates and finding that the ICPs included unallowable executive compensation, IR&D, and rental costs.  The contractor appealed. Continue Reading If At First You Don’t Succeed: Contractor Successfully Challenges Disallowed IR&D and Compensation Costs

Photo of Steve McBradyPhoto of Michelle ColemanPhoto of Amanda McDowellPhoto of Zariah Altman

On April 6, 2023, the Civilian Board of Contract Appeals (CBCA), in BES Design/Build, LLC, CBCA 7585, dismissed a contractor’s appeal for lack of jurisdiction, finding the appeal untimely, and underscoring that a contractor cannot reset the 90-day appeal window by resubmitting its original claim.

On February 24, 2021, BES Design/Build, LLC (BES) submitted

Photo of Steve McBradyPhoto of Michelle ColemanPhoto of Alexandra Barbee-GarrettPhoto of Issac Schabes

On April 18, 2023, the Department of Defense (“DoD”) issued guidance to DoD contracting officers directing the cessation of certain emergency contracting measures utilized during the COVID-19 pandemic.  Following the termination of the COVID-19 national emergency declaration through President Biden’s April 10, 2023 signing of H.J. Res. 7, DoD released a memorandum titled “

Photo of Adelicia R. CliffePhoto of Jana del-CerroPhoto of Chandler LeonardPhoto of Rachel Schumacher

On March 22, 2023, the Department of Defense (DoD) issued a proposed rule that would amend the Defense Federal Acquisition Regulation Supplement (DFARS) to require certain contractors to provide export authorizations to the Defense Authorization Management Agency (DCMA).

DCMA performs quality assurance reviews for manufacturing operations to ensure contractors have the appropriate systems in place to meet quality and functionality standards along with contractual requirements regarding testing and validation.  In some cases, DCMA will engage a foreign auditor to perform the quality assurance review.  However, to do so DCMA needs insight into applicable export authorizations to see if engaging the foreign auditor is permissible.      

The proposed rule would require contractors to provide export authorizations to DCMA when the contract requires (i) government quality assurance surveillance oversight and (ii) performance in or delivery to a government quality assurance country (Australia, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Israel, Italy, Republic of Korea, Netherlands, Norway, Poland, Romania, Slovakia, Spain, Sweden, Turkey, and the United Kingdom).  Export authorizations include export licenses, exemptions, exceptions, and other approvals.  The contractor must also provide the contact information for an empowered official or export point of contact.   Continue Reading Proposed Rule Requires Certain Contractors to Provide Export Authorizations to DCMA

Photo of Kris D. MeadePhoto of Rebecca SpringerPhoto of Katie Erno

On August 19, 2022, the Office of Federal Contract Compliance Programs (the “OFCCP”) published a Notice in the Federal Register to federal contractors of a Freedom of Information Act (“FOIA”) request from Will Evans of the Center for Investigative Reporting (“CIR”) for disclosure of Type 2 Consolidated EEO-1 Report data submitted by all federal contractors and first-tier subcontractors from 2016 until 2020.  In order to determine whether this information is protected from disclosure under FOIA Exemption 4, which protects disclosure of confidential commercial information, the OFFCP requested that federal contractors whose information would otherwise be subject to this request submit objections to the OFCCP by September 19, 2022.  Type 2 EEO-1 reports are one of the mandatory submissions that multi-establishment employers file annually, consistent with their obligations under Title VII of the Civil Rights Act of 1964 and the OFCCP’s regulation. They consist of a consolidated report of demographic data for all employees by employer establishment, categorized by race/ethnicity, sex and EEO-1 job category.  Notably, the FOIA request at issue does not seek production of Component 2 compensation data included in the EEO-1 reports submitted by federal contractors and subcontractors in 2017 and 2018.Continue Reading Federal Contractors Have Until September 19, 2022 to Object to Disclosure of EEO-1 Data Subject to Pending FOIA Request

Photo of Kris D. MeadePhoto of Steve McBradyPhoto of Jason Crawford

On September 7, the Obama Administration issued a new executive order requiring that federal government contractors provide paid sick leave to employees, the latest in a series of EOs targeting federal contractors, which have to date resulted in 16 new regulations (previously discussed here, here and here).  According to the White House,