Husch Blackwell

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Secrecy is not often associated with fairness in the American system of justice. One law that requires secrecy is the False Claims Act, which encourages and rewards private citizens who bring actions against those whom they believe have defrauded the government. Because these cases must be filed under seal, the defendant remains blind to the allegations until a government investigation is well underway. Even before the government is notified of alleged fraudulent behavior, the whistleblower or “qui tam relator” can obtain documentation and information necessary to investigate and file suit without going through a formal discovery process. Whistleblowers and their attorneys may even use a “ringer” to obtain evidence and avoid alerting a contractor of the potential suit.

On July 7, 2011, the Department of Labor released its regulatory agenda for the next 6-12 months.  The agenda for the Office of Federal Contract Compliance Programs (OFCCP) contains five items:  compensation, construction, veterans, disabilities, and sex discrimination.  OFCCP hosted a live Q&A session on its regulatory agenda on July 12, confirming its new aggressive approach.

On June 28, 2011, the Office of Federal Contract Compliance Programs (OFCCP) released a new directive specifically authorizing the use of Functional Affirmative Action Programs (FAAPs) and detailing applicable procedures.  While most covered contractors prepare affirmative action plans based on establishment, some contractors (typically, very large, multi-establishment companies) conclude that an affirmative action plans based on function or unit (such as sales, or R&D), which cut across establishments, more appropriately analyze the workforce.

The FAR Councils have adopted a final rule [pdf] revising the categories of veterans protected by federal equal opportunity laws. The rule updates the FAR to reflect Department of Labor regulations addressing equal opportunity requirements for veterans. The FAR amendments identify four categories of veterans: disabled veterans, recently separated veterans, armed forces service medal veterans,…

The Office of Federal Contract Compliance Programs is proposing changes to the standard-form Scheduling Letter that will impose significant new burdens on contractors. The proposed changes would require contractors to provide their leave policies (including their entire employee handbook), more detailed demographic and compensation data, as well as the last three years of VETS-100/VETS-100A reports.…

Contributed by Husch Blackwell Partner Bert Wolf, Esq.

Government contractors are relieved that they won’t immediately face having 3% of their invoices withheld as an advance against future tax liability. The IRS’s final rule implementing the 3% withholding tax won’t go into effect until 2013.  Absent a material modification, contracts executed by December 31, 2012 will be exempt from the withholding tax entirely, at least until January 1, 2014. But that isn’t the end of the story. Here is a bit of the background on the source of the 3% withholding tax, why it has been delayed, and some thoughts on why it’s not a great solution to the problem at hand.

Developments in the OFCCP’s investigation of compensation disparities at United Space Alliance, LLC are worthy of consideration. During a 2009 desk audit, OFCCP conducted a standard threshold test of United Space Alliance’s compensation data.  Although this audit uncovered no indicators of pay discrimination, OFCCP conducted additional tests of the data, commonly known as the “pattern analysis” and the “30 and 5 Refinement” tests. These tests revealed potential pay bias, and OFCCP requested more extensive compensation data to examine the question more closely. The case begins when United Space Alliance refused to comply with OFCCP’s request.

During last week’s “Meet the Construction Chiefs” program put on by Professional Women in Construction, the new Director of Project Delivery for the National Capital Region gave a candid presentation on his plan for overhauling GSA’s procurement of construction services. Andrew Blumenfeld’s plan includes identifying the contractor’s proposed completion schedule as an evaluation factors and encouraging fixed-price line items for acceleration.

More legislation to address the recent high-profile abuses of the SBA contracting system is in the works. A bipartisan group led by Senator Olympia Snowe (R-ME) has introduced legislation called the Small Business Contracting Fraud Prevention Act of 2011 [pdf]. Among other things, the bill would amend the provisions of the Small Business Act relating to misrepresentations as to the status of companies as small business concerns, including HUBZone, 8(a), woman-owned, and service-disabled veteran-owned small businesses.