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Contributed by Kyle J. Gilster, Esq. of Husch Blackwell’s Governmental Affairs Practice Group

The government contracting community is concerned about the repercussions of the failure of the Joint Select Committee on Deficit Reduction (aka “the Super Committee”) to reach an agreement before the November 23rd deadline. In light of this failure, the question of the day is what happens now on deficit reduction and what impact this will have on government contractors.

Chief Judge Royce Lamberth’s 46-page decision in United Space Alliance, LLC v. Solis, No. 11-746 (D.D.C. Nov. 14, 2011), introduces new uncertainties for contractors facing OFCCP investigations. The case arose from a 2009 OFCCP desk audit of United Space Alliance’s facility in Cape Canaveral, Florida. Applying DOL’s established practices to the initial compensation data provided by United Space Alliance revealed no discriminatory pattern. But DOL sought additional information because “it appeared that women were earning less more frequently than men.”  United Space Alliance refused, calling the request “unjustified.”

The FAR Councils have issued a final rule addressing the prevention of personal conflicts of interest (PCOIs) for contractor employees performing acquisition functions closely associated with inherently governmental functions. 76 Fed. Reg. 68,017 (Nov. 2, 2011). The final rule amends the FAR to add Subpart 3.11 and a corresponding contract clause (FAR 52.203-16) requiring contractors to identify and prevent PCOIs of their covered employees and prohibiting covered employees who have access to non-public information gained by performance of a government contract from using it for personal gain. This Subpart implements the requirement set out in section 841(a) of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009.

The U.S. District Court for the District of Columbia has issued a decision that may have a far-reaching impact on actions brought by the federal government under the False Claims Act. In United States v. First Choice Armor & Equipment, Inc., No. 09-1458 (D.D.C. Aug. 29, 2011) [pdf], the government asserted claims for fraudulent conveyances under the Federal Debt Collection Procedures Act in addition to its FCA and common law claims.  The court’s August 29 decision allows these claims to survive a motion to dismiss.

The Commission on Wartime Contracting’s final report [pdf] asserts that upwards of $60 billion in U.S. tax dollars have been lost to fraud, waste, and abuse in Iraq and Afghanistan over the past decade. The independent Commission was created in 2008 to assess contingency contracting for logistics, security, and reconstruction, as well as to make recommendations to Congress in order to improve contracting practices. The Commission’s final report blames the staggering losses on a lack of oversight, poor planning, and corruption. 

Title VII does not just protect U.S. citizens from discrimination, harassment, and retaliation while on U.S. soil; it also protects U.S. citizens overseas when working for U.S. companies. A recent complaint filed with the U.S. District Court in the Eastern District of Virginia Alexandria division highlights this. On August 17, 2011, the Equal Employment Opportunity Commission sued DynCorp International for hostile environment and retaliation. According to the Complaint [pdf], DynCorp, a military contractor and aircraft maintenance company, employed James Friso overseas. In late 2006, DynCorp transferred Friso to work at its jobsite in Taji, Iraq, where, allegedly, Friso experienced sexually charged harassment because he did not fit the male gender stereotype. The Complaint alleges that Friso was subjected to frequent derogatory comments by a co-worker about him and homosexuality. The Complaint alleges that Friso complained multiple times, but that the company failed to respond. Ultimately, Friso was transferred to Germany, which resulted in a loss of pay. The Complaint argues that this transfer was retaliatory in nature.

Activity by the Office of Federal Contract Compliance Programs points directly toward a new focus on discrimination in employee compensation. A settlement with AstraZeneca involving pay disparities averaging only $1,700 requires the company to conduct additional statistical analyses of pay for hundreds of employees. OFCCP rescinded the 2006 standards for assessing pay discrimination and published an advance notice of proposed rulemaking announcing a…