During the past year, we have continued to see developments on cost and pricing issues, particularly with respect to the 2017 National Defense Authorization Act (“NDAA”). On May 5, 2017 from 11:00 am – 12:00 pm, Crowell & Moring attorneys Terry Albertson, David Bodenheimer, Chris Haile, Steve McBrady and Liz Buehler will highlight some of
The SBA Final Rule Implementing the FY2013 NDAA Part II: The Changes to Small Business Subcontracting Plans Have Immediate Impacts on Small and Large Businesses
The Small Business Administration’s (SBA) final rule, Small Business Government Contracting and National Defense Authorization Act of 2013 Amendments, implements changes regarding small business subcontracting plans contained in the National Defense Authorization Act of 2013 (FY2013 NDAA). We discuss the key changes below. This rule becomes effective June 30, 2016, but as some of the changes impact the proposal process which can involve planning and team selection months in advance of proposal submission, contractors need to focus on the new requirements now.
Continue Reading The SBA Final Rule Implementing the FY2013 NDAA Part II: The Changes to Small Business Subcontracting Plans Have Immediate Impacts on Small and Large Businesses
OOPS Preview: Cost & Accounting: Items at the Top of the Ledger
The past twelve months have seen major developments on cost and pricing issues relevant to the “top of the ledger” – as well as the bottom line. On May 26, 2016, at 11:00 am -12:00 pm, Crowell & Moring attorneys Terry Albertson, Steve McBrady, Rob Burton, and Skye Mathieson will highlight some of the most
Hiring a Former Government Official? Obtain and Hold On to the Ethics Letter
The Department of Defense (DoD) Office of Inspector General (IG) recently released a July 6, 2015 Memorandum announcing that it will “immediately” begin the field work for its assessment of DoD compliance with Section 847 of the 2008 National Defense Authorization Act (NDAA), “Requirements for Senior Defense Officials Seeking Employment with Defense Contractors.” Section 847
Department of Defense Releases Proposed “Counterfeit Electronic Part” Acquisition Regulations
On May 16, 2013, the Department of Defense (“DoD”) published long awaited proposed regulations regarding efforts contractors must take to prevent the entry of counterfeit electronics into the DoD supply chain. As previously discussed on this blog, Section 818 of the National Defense Authorization Act for FY2012 required DoD to revise its acquisition regulations
Department of Defense Tightens Counterfeit Prevention Policy
On April 26, 2013, the Under Secretary of Defense for Acquisition, Technology, and Logistics issued Department of Defense (“DoD”) Instruction No. 4140.67 to further establish policy to prevent counterfeit materiel at any level of the DoD supply chain. As we have previously blogged about, Section 818 of the National Defense Authorization Act of 2012 required DoD to assess its internal policies for detection and avoidance of counterfeit electronic parts by June 28, 2012 and revise the DoD acquisition regulations to address the detection and avoidance of counterfeit parts by September 26, 2012. However, despite the statutory mandate, DoD has not revised its acquisition regulations and this Instruction appears to be another interim measure.
The instruction serves two main purposes – (1) to establish DoD’s policies regarding counterfeit prevention and (2) assign responsibilities for the prevention, detection, and remediation of counterfeit material. Pursuant to the Instruction, it is DoD’s policy not to procure counterfeit material and DoD will employ a risk-based approach to reduce the frequency and impact of such material by applying prevention and early detection procedures within the supply chain and strengthening the oversight and surveillance procedures for critical material. DoD’s policy under the Instruction is to investigate all cases of suspected counterfeit material and document all occurrences of suspected and confirmed counterfeit material. DoD will make information about counterfeiting available at all levels of the supply chain, seek restitution when cases of counterfeiting are confirmed, and notify at the earliest opportunity criminal investigative organizations or intelligence authorities and those who use such materials.
Continue Reading Department of Defense Tightens Counterfeit Prevention Policy
C&M Lawyers Conduct Live Webinar on the New Whistleblower Protections Under the National Defense Authorization Act (FY 2013)
At 2:00 p.m. EST on February 27, 2013, Crowell & Moring Attorneys Peter Eyre, Andy Liu, Rebecca Springer, and Jason Lynch will conduct a webinar on the implications of the FY2013 NDAA’s new whistleblower protections for government contractors. The webinar will offer analysis of the expanded protections, define and discuss “retaliation” as defined under the
In-sourcing Update
Developments continue surrounding the issue of in-sourcing. Turning first to the developments at the Court of Federal Claims, Judge Horn, recently dismissed an in-sourcing claim after finding that Plaintiff was not an interested party. Triad Logistics Servs. Corp. v. United States, No. 11-43C (Crt. Fed. Cl. Apr. 16, 2011). The Court held that while it has subject matter jurisdiction over in-sourcing claims generally, with regards to the particular in-sourcing claim at issue, the Plaintiff was not an interested party because the contract had already been completed. Accordingly, the Court found that Plaintiff lacked standing and dismissed the case.
To understand the scope of the Triad decision, a brief analysis of the procedural posture presented in the case is required. Plaintiff, Triad Logistics Service Corporation provided vehicle operations and maintenance services to the Air Force. During performance under the third option year, the Air Force informed Triad that it would be in-sourcing the services provided under the contract, and therefore not exercising a fourth option year. Instead, the Air Force modified the contract to extend performance for a brief period, at which time the contract ended by its own terms. Triad initially protested at the Government Accountability Office, which was dismissed on November 24, 2010 for failure to set forth a valid basis of protest.
Triad then filed it’s first protest at the Court of Federal Claims on November 29, 2010, the same day its extended contract ended. At the initial hearing on Triad’s first protest, the Air Force admitted there were errors in the cost calculation comparing the cost of contracting for the services versus performing the services internally. The Court therefore dismissed that complaint to allow the Air Force to perform a recalculation and make a final in-sourcing decision. On December 16, 2010, the Air Force again concluded that it would be less expensive to in-source the services.
Triad filed its second protest at the Court, the one at issue here, on January 14, 2011. The Court dismissed the case, holding that Triad was not an interested party because its contract had ended and government employees had begun performing the contract functions prior to when the second complaint was filed. Therefore, the Court found that Triad no longer possessed the required direct economic interest in a contract to qualify as an interested party. The Court seems to suggest that Triad’s claim may be more akin to an out-sourcing claim, which the Appropriations Acts strongly discourage. Continue Reading In-sourcing Update
The Fight Against Counterfeit Electronic Parts – Increasing Burdens on DoD Contractors
On May 21, the Senate Committee on Armed Services published a troubling report on the results of its year-long inquiry into counterfeit electronic parts in the DoD supply chain. The report found approximately 1,800 cases of suspect counterfeit electronic parts in the defense supply chain during 2009 and 2010 involving over one million individual parts. Over 70 percent of the parts were traced back to China. It concluded there was overwhelming evidence of large numbers of counterfeit parts making their way into critical defense systems, failures by defense contractors and DoD to report counterfeit parts, and gaps in DoD’s knowledge of the scope and impact of such parts on defense systems.
The report praised the amendment offered by Senators Levin and McCain, Section 818 of the 2012 National Defense Authorization Act, seeks to stop the importation of counterfeit parts, strengthen the defense supply chain, and promote the adoption of aggressive counterfeit avoidance practices by DoD and the defense industry. The regulations currently being developed by DoD in response to that legislation, which was signed into law on December 31, 2011, will have significant impact on DoD contractors.
Section 818 requires DoD to assess its policies and systems for the detection of counterfeit electronic parts, implement a risk-based approach to minimize the impact of counterfeit or suspect counterfeit parts on DoD (a similar requirement applies to the Department of Homeland Security), and promulgate regulations that: (1) place on contractors the responsibility for “detecting and avoiding the use or inclusion of counterfeit electronic parts or suspect counterfeit electronic parts in such protects and for any rework or correction action that may be required to remedy the use or inclusion of such parts”; (2) renders unallowable costs of rework or corrective action necessary to remedy the use or inclusion of counterfeit parts under DoD contracts (this may be amended by the 2013 NDAA); and (3) require, wherever possible, that DoD contractors and subcontractors obtain electronic parts from the original manufacturers, authorized dealers, or “trusted suppliers.” DoD is also required to issue or revise guidance on remedial actions to be taken against suppliers who repeatedly fail to detect and avoid counterfeit electronic parts, including consideration of whether to suspend or debar them.Continue Reading The Fight Against Counterfeit Electronic Parts – Increasing Burdens on DoD Contractors
Increased Debarment for Small Business Misrepresentations?
Section 1683 of the 2013 National Defense Authorization Act, H.R. 4310, as approved last week by the House Committee on Armed Services, proposes an amendment to the Small Business Act to clarify that misrepresentation as to small business status in order to obtain certain prime contracts or subcontracts is an independent basis for suspension