It has been two months since President Biden issued his Buy American Executive Order on January 25, 2021. But it would seem we still have more questions than answers: What specific actions will agencies take to promote the Order’s policy? What will the Made in America Office look like? Where can I find more information about proposed waivers? While the answers to these questions are probably still months away, it is important for contractors to understand the possible implications now and plan accordingly.
The automatic stay of award is one of the key elements of a bid protest under the Competition in Contracting Act. The CICA stay is only available when a protest is filed no later than ten days after contract award or no later than five days after a debriefing. In the 2018 NDAA (Section 818), Congress introduced the enhanced debriefing process for DoD procurements. It allows disappointed offerors to submit follow-up questions within two business days after a debriefing. It also extends the protest deadline until those questions are answered. But what if the contractor does not have any additional questions? Does the two-day period to submit questions extend the protest deadline for purposes of the CICA stay?
The Federal Circuit answered this question in NIKA Technologies, Inc. v. United States, Case No. 2020-1924 (Feb. 4, 2021). If a contractor does not submit follow-up questions after a debriefing, it does not get the benefit of the two-day question period for purposes of the CICA stay.
Have you received a Section 889 letter yet? If not, you may soon. The letters ask whether you provide or use “covered telecommunications equipment or services.” They are part of the implementation of Section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 (the 2019 NDAA), which has two phases. The first phase started in August 2019 but has a limited scope. The second phase—which started in August 2020—is much broader and raises a lot more questions. This article answers some of those questions and provides some tips on how to comply.
Keep in mind that Section 889 is still being implemented. Much of this analysis is based on interim rulemakings at 85 F.R. 42665 and 85 F.R. 53126. Final rules may change based on public comments. Continue Reading Frequently asked contractor questions about Section 889
On December 4, 2020 the President signed into law the IoT Cybersecurity Improvement Act of 2020, Pub. L. No. 116-207 (the “IoT Act”). The legislative purpose behind the new law is to ensure the highest level of cybersecurity at federal agencies by working collaboratively within government, industry and academia. Pub. L. No. 116-207 § 2.
The IoT Act mandates specific actions by the National Institute of Standards and Technology (NIST), the Office of Management and Budget (OMB) and the Department of Homeland Security (DHS) regarding: (i) standards and guidelines for IoT devices, (ii) determining whether federal agencies adhere to those standards, (iii)implementing guidelines to disclose security vulnerabilities to contractors and report the resolution of those vulnerabilities.
Sorting through domestic preference requirements applicable to government contracts is no simple task. Different agencies like the DOD, FTA, FAA, FHWA, have their own rules applicable to certain programs. Exceptions from those rules can differ when a small business is making the offer. And the rules are subject to change. With the Court of Appeals for the Federal Circuit’s (“Federal Circuit”) decision in Acetris Health LLC v. United States (Fed. Cir. 2/10/2020), the situation is now a little more complicated. The same product may be “U.S. made” for government contracts purposes but considered foreign origin for customs and international trade purposes which triggers US customs duties and tariffs. Continue Reading Federal Circuit weighs in on Trade Agreements Act compliance and the meaning of “manufacture”
We’ve all heard the expression that those who deal with the Government must turn square corners. This is because the Government has a broad array of tools at its disposal to motivate, coax, and cajole contractors and federal grant recipients to play by the rules. Those tools include harsh measures such as criminal prosecution and civil false claims act enforcement on the one hand and poor CPARS ratings on the other. A seemingly less severe administrative option available to the Government is suspension and debarment. However, any entity that has been suspended or debarred knows that these measures can prove harsh and disruptive. While the numbers of suspensions and debarments have declined from the all-time high in 2011, there is still significant activity. In its FY 2018 report, the Interagency Suspension and Debarment Committee reported 2444 referrals, 480 suspensions, 1542 proposed debarments, and 1334 debarments. The number of referrals for suspension and debarment in FY 2018 is almost exactly the same as the number of GAO bid protests filed that year.
What is Suspension and Debarment?
Like any consumer, the Government has inherent authority to pick with whom it will do business. Not everyone makes the cut. Suspension and debarment are the Government’s tool to avoid entities it views as a high risk for poor performance, fraud, waste, and abuse. Suspension and debarment preclude a business entity or individual from contracting with the Government or from receiving grants, loans, loan guarantees or other forms of assistance from the Government. A suspension is a temporary exclusion when the Government determines immediate action is necessary pending the completion of an investigation or legal proceeding. A debarment is an exclusion for a defined, reasonable period of time—often three years. Continue Reading A primer on Suspension and Debarment
We previously looked at whether the COVID-19 pandemic is an excusable delay that would give contractors relief from delivery deadlines and schedule commitments. But many contractors impacted by Coronavirus may see their costs of performance increase due to agency instructions intended to control the spread of the virus. Today we review potential avenues for recovering those costs.
- The Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
The first potential avenue for recovering Coronavirus impact costs is the recently passed CARES Act (Pub. L. 116-136). Section 3610 of the CARES Act allows agencies to reimburse contractors for paid or sick leave costs that they incur to pay their employees when a site is impacted by Coronavirus. This reimbursement authority applies where (i) employees or subcontractors are unable to perform work on a federally approved site “due to facility closure or other restrictions;” and (ii) those employees or subcontractors cannot telework because their duties cannot be performed remotely.
But this reimbursement authority is subject to some very specific limitations. First, the CARES Act does not require that agencies reimburse these costs. It just gives agencies discretion to do so and allows them to use any available appropriations. Contractors seeking reimbursement under this avenue will need to affirmatively request reimbursement and provide the agency with compelling reasons to exercise its discretion.
Second, the agency’s reimbursement authority is limited to “the minimum applicable contract billing rates not to exceed an average of 40 hours per week,” and is only for leave that is paid by the contractor to “keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contract personnel.”
Third, any reimbursements received pursuant to § 3610 of the CARES Act must be reduced by the amount of payroll tax credits the contractor is allowed under Division G of the Families First Coronavirus Response Act (Pub. L. 116-127).
On April 9, 2020, the Office of the Under Secretary of Defense for Acquisition and Sustainment issued Implementation Guidance for § 3610 of the CARES Act. The guidance emphasizes the need for documentation to show how leave costs are “identified, segregated, recorded, invoiced, and reimbursed.” It also notes that implementation will vary based on the contract type and suggests creation of a separate line item (or series of line items) to track CARES
§ 3610 costs.
Affirmative action requirements waived for contracts specifically related to COVID-19 relief
As in past times of national emergency, the Office of Federal Contract Compliance Programs has stepped up to exempt certain new federal supply and service contractors and subcontractors from having to comply with most OFCCP requirements over the course of the contract. Announced March 17, OFCCP calls the action the “National Interest Exemption.” Contractors providing supplies and services specifically related to COVID-19 relief must still abide by OFCCP’s non-discrimination and non-retaliation obligations and are subject to OFCCP complaint investigations. The exemption extends to the obligations of all three laws enforced by OFCCP: Executive Order 11246, § 503 of the Rehabilitation Act, and § 4212 of VEVRAA.
Federal agencies and contractors are working hard to address the realities of the COVID-19 pandemic. In some cases, work must stop. In others, the work will increase or change dramatically. While contractors should look to contracting officers for guidance with respect to specific contracts, agency-wide guidance documents are beginning to shed light on the government’s expectations. We will be using this blog entry to collect and share agency guidance on performance of government contracts during the Coronavirus pandemic.
Department of Defense—
- Civilian Personnel Guidance for DoD Components (Mar. 8, 2020). Risk-based measures to minimize risk to civilian personnel and a limited telework policy.
- Guidance for Personnel Traveling During the Novel Coronavirus Outbreak (Mar. 11, 2020). Pre-travel and post-travel health guidance.
- Planning for Potential Novel Coronavirus Contract Impacts (Mar. 10, 2020). Contractors are encouraged to work with government program managers and requirements owners to determine if new measures need to be taken to ensure the welfare and safety of the workforce. Empowers contracting officers as the authority when contract performance is affected by COVID-19.
- The Role of Continuity in the COVID-19 Pandemic Response (Mar. 18, 2020). Reinforces the localized power of the Health Protection Conditions (HPCON) framework and Pandemic Plans that are developed by DoD Components.
- Contract Place of Performance — Public Health Considerations (Mar. 20, 2020). Extends the same telework flexibilities that are available to DoD service members and civilians to contractors, where appropriate.
- Determining and Making Commercial Item Procurements (Mar. 27, 2020). Lists class Commercial Item Determination (CID) to allow Contracting Officers maximum flexibility in awarding critical contracts for supplies and services related to the COVID-19 pandemic in a streamlined manner.
- Undefinitized Contract Actions, Class Deviation 2020-O0012 (Apr 3, 2020). For undefinitized contract actions (UCA), it removes the requirement in DFARS 217.7404-4(a) to limit obligations, if the UCA is related to the national emergency. It also allows the head of the contracting activity to waive the limitations in DFARS 217.7404(a)(1)(i), 217.7404-3(a), and 217.7404-4(a) for a UCA if the head determines the waiver is necessary due to the national emergency for COVID-19.
- Submission of Interim Vouchers under Classified Contracts, Class Deviation 2020-O0011 (Apr. 3, 2020). Directs contractors to submit interim vouchers under classified contracts to the payment office listed in the contract. The vouchers are provisionally approved by the Defense Contract Audit Agency (DCAA).
- Progress Payment Rates, Class Deviation 2020-O0010 (Mar. 20, 2020). Increases progress payment rates at DFARS 232.502-2 for large business concerns to 90% and small business concerns to 95%.
- Progress Payment Rates Implementation Guidance (Apr. 3, 2020). Provides FAQs for Class Deviation 2020-O0010.
Department of the Army—
- Planning for Potential Novel Coronavirus Impacts (Mar. 12, 2020). Encourages increased communication, notes that contracting officers do not bear the responsibility to determine whether the excuse of COVID—19 applies, outlines causes for performance delays that are excusable and FAR provisions that excuse performance delays, and clarifies situations in which compensation is an option.
In response to the growing Coronavirus pandemic, President Trump announced that the federal government will invoke the Defense Production Act to obtain necessary medical equipment and supplies from private industry. In this post we address some of the most frequently-asked questions about the DPA.
What is the Defense Production Act?
Originally conceived during the Korean War, the DPA allows the President to divert goods and supplies from civilian use to promote the national defense. This authority is not limited to sourcing aircraft parts or ammunition, or to supporting active military operations. The text of the Act expressly extends to matters involving “national economic security and national public health or safety.”
The Defense Priorities and Allocations System regulations in 15 C.F.R. Part 700 implement the Defense Production Act. The DPAS regulations provide detail about how the government will issue rated orders and what contractors and commercial suppliers must do to respond.
How does the government prioritize orders for specific supplies?
The government specifies the relative priority for specific supplies by issuing a “rated order,” which may be designated “DX” or “DO.” A DX order has the highest priority. It must be fulfilled before any other DO or unrated order. A DO rated order must be fulfilled before an unrated order. A rated order must be fulfilled first, even if it means the contractor must divert items already in process or ready for delivery under another contract. Continue Reading Contractor FAQs on the Defense Production Act