On March 22, 2022, the Department of Defense (DoD) issued a final rule requiring contracting officers to consider supplier risk assessments in DoD’s Supplier Performance Risk System (SPRS) when evaluating offers. SPRS is a DoD enterprise system that collects contractor quality and delivery performance data from a variety of systems to develop three risk assessments:
In General Atomics Aeronautical Systems, Inc., ASBCA Nos. 61633, 61731 (Feb. 8, 2023), released March 14, 2023, the Armed Services Board of Contract Appeals (ASBCA) considered, but declined to answer, the existential question of whether intracompany lease payments are “costs.” The ASBCA denied the Government’s motion for summary judgment, finding that material facts about the
This week’s episode covers the National Cyber Security Strategy, a final DFARS clause requiring disclosure of use of workforce and facilities in the China, the Department of Commerce’s first Notice of Funding Opportunity under the CHIPS and Science Act of 2022, and congressional inquiries about financial conflicts of interest and ethically questionable behavior by senior
Last week, on March 9, 2023, in Percipient.ai, Inc. v. United States, the Court of Federal Claims held that Percipient.ai, Inc. (“Percipient”) had standing to protest a National Geospatial-Intelligence Agency (“NGA”) procurement called “SAFFIRE” intended to improve the agency’s production, storage, and integration of geospatial intelligence data. Percipient’s complaint, filed in January of this year, argued that SAFFIRE violates the statutory mandate at 10 U.S.C. § 3453 to procure commercial items “to the maximum extent practicable.” The Court’s conclusion that Percipient had standing to protest is notable because (1) NGA issued the SAFFIRE solicitation in January 2020 (over three years ago); (2) NGA awarded the SAFFIRE contract to CACI, Inc. – Federal (“CACI”) in January 2021 (over two years ago); and (3) Percipient never submitted a proposal in response to the solicitation.
The Government and CACI moved to dismiss Percipient’s complaint, arguing, among other things, that Percipient lacked standing to protest because it had not submitted a proposal and therefore was not an “interested party,” and because the protest—filed two years after contract award—was in fact a challenge to NGA’s administration of the SAFFIRE contract. The Government and CACI also argued that the protest was untimely under the Federal Circuit’s decision in Blue & Gold Fleet, L.P. v. United States, 492 F.3d 1308 (Fed. Cir. 2007), which generally requires that protests challenging the terms of a solicitation be filed before the proposal due date.
On March 9, 2023, President Biden released his fiscal year (FY) 2024 budget request outlining the administration’s priorities, including a nearly 10 percent increase in discretionary spending over the current enacted funding levels. The President’s budget requests a total of $6.9 trillion federal spending for FY 2024. Of this amount, $4.2 trillion would be in mandatory spending and $1.9 trillion would be in discretionary spending. Defense spending would receive an approximately 3 percent increase from FY 2023 for a total of $885 billion in discretionary spending, while non-defense spending would receive a nearly 4 percent increase from FY 2023 levels for a total of $1.02 trillion in FY 2024. The President’s budget request proposes a 7 percent increase over current non-defense spending level and tax increases among other proposed revenue raisers designed to lower the national deficit by $3 trillion over the next 10 years.
The President’s budget request is the first step in the annual appropriations process. As the U.S. Congress holds the power of the purse, the next step is for Congress to pass a budget resolution, which provides a blueprint for all budget-related legislation, including the topline numbers governing discretionary spending for the upcoming fiscal year. The Appropriations Committees in the House and Senate will spend the next couple of months holding hearings on the budget request in preparation of their work on appropriations bills for government departments and agencies. The current divided government – with Democrats controlling the White House and the Senate, but with Republicans in the majority in the House of Representatives – and escalating partisan rhetoric on the debt ceiling raises questions about whether the political parties can navigate their way to an agreement before the current funding law expires on September 30. One thing is clear, the President’s budget priorities stand in stark contrast with the emerging House Republican agenda, and the final FY 2024 appropriations law will vary significantly from President Biden’s request.
The following summary, based on a review of the budget request and accompanying Fact Sheet and Analytical Perspectives, provides highlights from each section of the President’s budget proposal. Please reach out to the Crowell Government Affairs Group for more detail in any given area.
Continue Reading President Biden Outlines White House Priorities in FY 2024 Budget Request
March 2, 2023, marked the 160-year anniversary of the enactment of the False Claims Act (FCA). Signed into law by the sixteenth president, the statute known as “Mr. Lincoln’s Law” was passed in response to the actions of contractors that sold rancid food, faulty rifles, and shoddy uniforms to the Union Army. Eight score after the law’s passage, the FCA has become the government’s primary enforcement tool in cases involving allegations of fraud, and today the Civil War era statute is applied in cases involving industries and federal programs that would have exceeded Lincoln’s wildest imagination.
2022 was a busy year for the False Claims Act. While recoveries were down, new cases reached a record mark, and settlements addressed multiple important and developing enforcement areas, from cybersecurity to small business fraud, bid rigging, Trade Agreements Act compliance, pandemic fraud, and more. Of particular note, the U.S. Supreme Court held argument concerning
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
The following is an installment in Crowell & Moring’s 2023 Bid Protest Sustain of the Month Series. All through 2023, Crowell’s Government Contracts Practice will keep you up to date with a summary of the most notable bid protest sustain decision each month. Below, Crowell Partner Cherie Owen discusses a GAO reconsideration decision involving a prior sustain based on an offeror’s material misrepresentation.
Although GAO kicked off 2023 with 3 sustain decisions, February brought a sustain drought – GAO’s public docket shows that GAO did not sustain any protests in the second month of 2023. At first blush, this could appear to be disheartening to would-be protesters. However, the outlook is not as gloomy as it seems. First, it’s important to remember that GAO’s “effectiveness rate” (which measures the percentage of protests that result in some form of relief for the protester, such as voluntary agency corrective action or a sustained decision) consistently hovers near 50%. Thus, even in the absence of written sustain decisions, there were undoubtedly a number of protests that resulted in corrective action during the month. Second, GAO’s docket reflects that the sustain drought has already ended – GAO sustained a protest on March 1. Although that decision is still under the Protective Order and has not yet been released publicly, potential protesters can rest assured that the drought was short-lived.
Continue Reading February 2023 Bid Protest Sustain of the Month
In a prime example of the significant interplay between the Anti-Kickback Statute (“AKS”) and the False Claims Act (“FCA”), a federal jury has returned a verdict of more than $43 million in damages against Cameron-Ehlen Group, Inc., which does business as “Precision Lens,” and its owner. The verdict in this long-running and closely watched fraud case out of the U.S. District Court for the District of Minnesota comes after a six-week trial, with the jury ultimately finding that the defendants paid kickbacks to ophthalmic surgeons to induce their use of defendants’ products in cataract surgeries reimbursed by Medicare, resulting in the submission of 64,575 false claims between 2006 and 2015. While the jury calculated damages at the massive sum of $43 million, that number may grow exponentially after the court applies the FCA’s treble-damages calculation (increasing the liability to $129 million) and statutory penalties of between $5,500 and $11,000 for each of the 64,575 claims (resulting in additional penalties of $355 million to $710 million). All told, the total FCA liability is expected to range between $485 million and $839 million.