Contractors interested in contracts with the Federal Aviation Administration (FAA) should be aware that FAA bid protests are different from protests involving other federal agencies. The FAA’s Office of Dispute Resolution for Acquisition has exclusive jurisdiction to resolve protests involving FAA procurements. Protest proceedings at ODRA are different from those at the Government Accountability Office and the Court of Federal Claims.
Mentor-protégé programs, such as the government-wide one at the SBA for all small business concerns, are designed to help small contractors engage in federal contracting by allowing larger, more experienced mentor firms to provide assistance to protégés. Generally, the proteges receive financial, technical, or management aid from mentors, and the mentors may receive subcontracting goal credits, reimbursement of expenses, and other incentives in return. One of the key concepts behind these programs is to increase the capacity of small business concerns to compete for contracts they would not ordinarily qualify for otherwise. The U.S. Government Accountability Office’s (GAO) recent decision in Innovate Now, LLC, B-419546, Apr. 26, 2021, confirmed this underlying principle.
A unique aspect of doing business with the federal government is the built-in limits on a contractor’s right to assign the contract or the right to payment under the contract to third parties. The Anti-Assignment Act (41 U.S.C. § 6305) prohibits the transfer of a government contract or interest in a government contract to a third party. An assignment of a contract in violation of this law voids the contract except for the Government’s right to pursue a breach of contract remedies. What’s a contractor to do when it is acquired/merged with another firm, is restructured, or goes through a variety of other types of corporate transaction? The Federal Acquisition Regulations recognize that firms involved in government contracts get bought and sold from time to time and includes procedures for the novation of contracts in certain situations to avoid a potential violation of the Anti-Assignment Act.
On April 27, 2021, President Biden issued a new Executive Order that raises the federal contractor minimum wage to $15 per hour, from the current $10.95 per hour, starting January 30, 2022.
Biden’s new Executive Order is nearly a word for word retread of the Obama Administration’s Executive Order 13658 (originally setting a $10.10 federal contractor minimum wage), with some notable exceptions:
- The federal contractor minimum wage is raised to $15 per hour starting January 30, 2022
- The current tipped worker federal contractor minimum wage, setting a lower hourly minimum wage just for tipped workers, is phased out by January 1, 2024; and
- The Trump Administration exemption for certain “recreational services on federal lands” (Executive Order 13838) is revoked.
What remains the “same” is the following:
On March 31, 2021, in United States ex rel. Felten v. William Beaumont Hospital, No. 20-1002, 2021 WL 1204981 (6th Cir. Mar. 31, 2021), the U.S. Court of Appeals for the Sixth Circuit held that the False Claims Act’s (FCA) anti-retaliation provision protects former employees alleging post-termination retaliation. The decision creates a split with the Tenth Circuit, which held in 2018 in Potts v. Center for Excellence in Higher Education, Inc., 908 F.3d 610 (10th Cir. 2018), that former employees are excluded from the scope of the FCA’s anti-retaliation provision. While current employees are undoubtedly protected under the provision, Felten ultimately leaves the question of whether former employees may recover for post-termination retaliation under the FCA unsettled across all circuits.
In today’s world, there is a tendency to believe that everything must be preserved forever. The common belief is that documents, emails, text messages, etc. cannot be deleted because doing so may be viewed as spoliation (i.e., intentionally destroying relevant evidence). A party guilty of spoliation can be sanctioned, which can include an adverse inference that the lost information would have helped the other side. But that does not mean that contractors have to preserve every conceivable piece of information or data under all circumstances. There are key differences between routine document destruction (when done before receiving notice of potential claims or litigation) and spoliation.
The Federal Circuit’s recent decision in Boeing Co. v. Secretary of Air Force, 983 F.3d 1321 (Fed. Cir. 2020), provides some useful clarity on the contents of the restrictive markings and legends that contractors affix to the technical data they deliver to the Government.
The case arose from two Air Force contracts for engineering and manufacturing development of radar systems needed for the F-15 Eagle. The contracts required Boeing to deliver technical data to the Air Force with “unlimited rights.” While Boeing retained ownership of the data, the unlimited rights license allowed the Air Force to “use, modify, reproduce, perform, display, release, or disclose [t]he technical data in whole or in part, in any manner, and for any purpose whatsoever, and to have or authorize others to do so.” 983 F.3d at 1325 (citing DFARS 252.227-7013(a)(16)).
The Biden Administration is imminently expected to release an executive order that will require government contractors to notify the government in the event of a cybersecurity breach. Despite the relatively steady rise in cyberattacks and breaches over the years, and the enactment of consumer data breach disclosure laws in all 50 states, there is currently no standardized reporting requirement for government contractors. However, the Biden administration has promised executive action on the issue, largely in response to a cyberattack by a suspected nation-state against multiple software companies, including the SolarWinds software company.
The Department of Defense (“DoD”) requested industry comments by April 28, 2021 to assist with the DoD’s forthcoming report identifying risks and policy recommendations regarding the supply chain for strategic and critical materials. The Apr. 13, 2021 Federal Register notice notes “the need for resilient, diverse, and secure supply chains to ensure U.S. economic prosperity and national security.” The DoD’s report is due 100 days after Executive Order (“EO”) 14017 “America’s Supply Chains,” signed February 24, 2021, which we comprehensively covered here.
In addition to a desire for general commentary from “both consumers and producers of strategic and critical materials and downstream products containing these materials,” the DoD lists a number of specific topics of interest. They include, for example:
- Supply chain transparency;
- Diversification of supply chain and production sourcing;
- Promotion of environmental, health and safety, labor, and fair trade in supply chains;
- Exposure to various risks including price volatility, supply disruption/shocks, and human rights violations and forced labor;
- Availability of substitutes for strategic and critical materials;
- Availability of necessary skilled labor;
- Research, development, and demonstration priorities; and
- Policy recommendations.
This request for comments also appears to be the first clear opportunity for industry to comment on the DoD’s role under the Trump Administration Sept. 30, 2020 EO 13953. That EO requires DoD reporting, in conjunction with other agencies, on (1) the threat to the domestic supply chain from reliance on critical minerals from foreign adversaries; and (2) supporting the domestic mining and processing industries. The Biden Administration’s “America’s Supply Chains” EO 14017 renews focus on this reporting by requiring an update from the DoD along with the DoD’s 100-day report.
Husch Blackwell continues to monitor US government efforts to reduce America’s supply chain risks in both the public and private sectors. Should you have any questions or require assistance in submitting a comment, please contact a member of Husch Blackwell’s Government Contracts team or Export Controls & Economic Sanctions team.
Last week the Army awarded Microsoft the Integrated Visual Augmentation System (IVAS) contract, a potentially $21 billion undertaking by the Army to develop next-generation night vision and “situational awareness capabilities” in a Heads Up Display. Unlike Microsoft’s last multi-billion dollar contract award, the Joint Enterprise Defense Infrastructure (JEDI), which is still pending before the Court of Federal Claims more than a year after Amazon filed its bid protest challenging the award in November 2019, IVAS is unlikely to experience the same fate. Why? Because IVAS was awarded under the Army’s Other Transaction authority (OTA) and is not subject to the same FAR rules as the JEDI contract.