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The General Services Administration estimates the size of the federal market for commercial products to be about $50 billion a year. Manufacturers and distributors of commercial products have seen GSA’s multiple award schedule contracts as a good way to way to access federal customers. But a GSA schedule contract does not guarantee sales and the process of obtaining and adhering to such a contract presents its own headaches.

Soon there will be a better way.

Section 846 of the National Defense Authorization Act for FY 2018 establishes a program that will allow federal agencies to purchase commercially available off-the-shelf (COTS) items through commercial e-commerce portals that are currently available only to the private sector. As long as the procurement is under the new $250,000 Simplified Acquisition Threshold, COTS products (not services) will be available for purchase Government-wide, presumably without additional competition and without a lengthy list of FAR clauses incorporated by reference.

Under the program, GSA will enter into “multiple contracts” with “multiple e-commerce portal providers.” To the maximum extent possible, the Government will adopt and adhere to standard terms and conditions established by the e-commerce portals themselves.…

Continue Reading Will e-commerce portals replace the Federal Supply Schedules?

The 1996 Congressional Review Act has been getting a lot of use since President Trump’s inauguration. On March 27, 2017, President Trump signed House Joint Resolution 37, revoking the “blacklisting regulations” put in place following former President Obama’s July 2014 Executive Order on Fair Pay and Safe Workplaces (EO 13673). As we discussed in an earlier post, the EO and the regulations implementing it directed federal agencies to take into account an employer’s workplace safety and other labor law violations as part of the their procurement decisions.

The CRA is an obscure legislative tool that can rescind recent executive actions, and thereby limit agency authority. Under the CRA, Congress has 60 legislative days (which are counted differently than calendar or business days) to pass a “joint resolution of disapproval” in the House and Senate. Joint resolutions of disapproval cannot be filibustered. A simple majority in both houses of Congress can overturn agency rules and regulations if the president signs the joint resolution.

There were significant questions regarding due process concerns with the blacklisting regulations. Industry strongly criticized the regulations because they allowed agencies to exclude contractors based on mere accusations, such as safety citations that had not yet gone through any adjudicatory proceedings.

Revoking the blacklisting regulations was the first of several actions President Trump and his allies in Congress intend to pursue to reduce the administrative/regulatory burdens on employers.…

Continue Reading Will the rollback of Obama’s executive orders be permanent?

The Congressional Review Act of 1996 may be an effective tool for rolling back recent federal regulations implementing President Obama’s policy initiatives. But it is limited. It applies only to very recent rules. It requires action by both houses of Congress and the President’s signature. It is strongly limited by political factors. In the 21 years since it was adopted, it has been used only once.

Congress is seeking stronger weapons. H.R. 5, the “Regulatory Accountability Act of 2017,” represents a substantial rewrite of the existing Administrative Procedure Act. H.R. 5 includes provisions that would allow courts to review agency rules on a “de novo” basis, without any deference to the agency’s interpretation of Constitutional or statutory requirements and other regulations.

H.R. 26, “Regulations from the Executive in Need of Scrutiny Act of 2017,” introduces a new mechanism for Congressional review of a broad category of Federal agency regulatory actions defined as “major rules.” Basically, the mechanism in H.R. 26 is designed to prevent a broad class of actions by Executive Branch agencies and independent regulatory agencies from becoming effective without a Joint Resolution of approval passed by Congress and signed by the President within a narrowly prescribed period (70 legislative days).

Even if these bills get through Congress and are signed by President Trump, they will likely face challenges in the Supreme Court. H.R. 26 in particular faces an uphill climb. For the reasons discussed in this article, the Joint Resolution mechanism in H.R. 26 suffers from the same Constitutional infirmities as the “one-House veto” that was popular in the 1970s but declared unconstitutional in INS v. Chadha, 462 U.S. 919 (1983).
Continue Reading Why Congress can’t have the one-House veto in H.R. 26

According to Shakespeare, “What’s done cannot be undone.” This may not be true with respect to many of the regulations implementing President Obama’s Executive Orders.

Let’s look at the fate of the rules implementing Executive Order 13673 (July 2014), formally called “Fair Pay and Safe Workplaces.” The DOL guidance and the FAR provisions implementing this Order were commonly referred to as “the blacklisting rules.”

The final blacklisting rules were published on August 25, 2016. Industry moved quickly to challenge them. An October 24, 2016 preliminary injunction issued by United States District Judge Marcia Crone stopped most of them from going into effect. Judge Crone’s order cites two constitutional problems with the blacklisting rules. First, they likely violate contractors’ due process rights because they require contractors to report mere allegations of labor law violations without the benefit of judicial or quasi-judicial safeguards to contest them. Second, they likely violate contractors’ First Amendment rights because they require contractors to “to report that they have violated one or more labor laws and to identify publicly the ‘labor law violated’ along with the case number and agency that has allegedly so found” even when there had been no adjudication.
Continue Reading The fate of “Fair Pay and Safe Workplaces” under President Trump

The Department of Labor has issued its final rule amending the overtime and exemption regulations of the Fair Labor Standards Act. Although the final rule differs in some ways from the July 2015 proposed rule, it will have significant administrative and budgetary impacts on most employers. The new rule becomes effective December 1, 2016, and will update automatically every three years thereafter.
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Continue Reading DOL’s new salary level tests for overtime pay

The National Defense Authorization Act for Fiscal Year 2016 [pdf], signed into law just before Thanksgiving, authorizes $607 billion for Department of Defense activities in FY 2016. It also implements a number of acquisition reforms intended to enhance the Government’s cybersecurity efforts and streamline the various acquisition regulations.  Here we break down some of the key acquisition provisions:

  • Rapid acquisition authority for cyber attacks. Section 803 of the 2016 NDAA expands the DoD’s ability to employ rapid acquisition procedures established under the 2003 NDAA to enhance its ability to respond to combat emergencies and urgent operational needs. Under Section 803, rapid acquisition procedures may now be used to acquire “needed offensive or defensive cyber capabilities, supplies, and associated support services” to respond to a cyber attack that “has resulted in critical mission failure, the loss of life, property destruction, or economic effects.” The term “cyber attack” is broadly defined as including any “deliberate action to alter, disrupt, deceive, degrade, or destroy computer systems or networks or the information or programs” in those systems. Acquisitions made pursuant to this authority are subject to an aggregate limit of $200 million in each fiscal year.
  • U.S. Cyber Command acquisition authority and liability protection for cybersecurity contractors. In addition to expanding DoD’s rapid acquisition authority to deal with cyber attacks, Section 807 of the NDAA provides new limited acquisition authority for the Commander of the United States Cyber Command (CYBERCOM). The Commander is authorized to procure “cyber operations-peculiar equipment and capabilities,” subject to an annual limit of $75 million for each fiscal year from 2016 through 2021. Section 1647 of the NDAA also requires the evaluation of cyber vulnerabilities of all major DoD weapons systems by the end of 2019. Section 1641 of the NDAA provides enhanced liability protection for reporting cyber incidents for both “cleared” and “operationally critical” contractors, so long as there is no willful misconduct.

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Continue Reading Cybersecurity and acquisition reforms in the FY 2016 National Defense Authorization Act

Criminal charges for minimum wage violations are certainly rare. But the November 2015 indictment of electrical contractor Marcus Butler shows that they are possible. Mr. Butler faces jail time and heavy fines for allegedly making false certifications regarding $126,514 in Davis-Bacon Act wages on three HUD multi-family housing projects.

Given the rarity of criminal indictments for wage-and-hour violations, I infer that Mr. Butler’s alleged conduct was much worse than simply miscalculating the prevailing wage or losing track of some payroll records. But there is nothing in the indictment that would reveal the underlying aggravating factors that motivated it. The Government asserts simply that Mr. Butler participated in a “scheme” and that he “knowingly and willfully” overstated wages and benefits on his 61 separate certified payrolls (DOL Form WH-347).

It will probably be some time before we see whether this is case is the result of overreaching conduct by DOL and government attorneys (like another recent DOL case) or the application of the new Justice Department policy set forth in the Yates Memorandum on Individual Accountability for Corporate Wrongdoing. This new policy will almost certainly increase the number of criminal charges arising from ordinary non-compliance and administrative oversight. Husch Blackwell’s client alert on the Yates Memorandum is available here.

Either way, now is the right time for federal contractors to take on the task of reviewing and updating their own HR policies and practices.…

Continue Reading Overkill or the new normal? Criminal charges for underpayment of prevailing wages and benefits

Redline of 2015 Amendments to FAR 52.222-50

The 2015 amendments to the anti-trafficking provisions in the Federal Acquisition Regulation will apply to all federal contracts and subcontracts awarded after March 2, 2015. Existing IDIQ contracts for which additional orders are anticipated will be modified “on a bilateral basis” to include the new language in FAR 52.222-50. See 80 Fed. Reg. 4967 (Jan. 29, 2015). The changes implement the requirements outlined in Executive Order 13627 (Sept. 25, 2012) and the anti-trafficking provisions of the 2013 National Defense Authorization Act, Public Law No. 112-239 (Jan. 2, 2013), codified in 22 U.S.C. Chapter 78.

Here we present some of the background on the original FAR clause and a summary of the new requirements. A redline version of the 2015 amendments to FAR 52.222-50 is available here.

The original FAR language on human trafficking

A contract clause prohibiting severe forms of human trafficking, procurement of commercial sex acts, and the use of forced labor has appeared in federal service contracts since April 2006. See 71 Fed. Reg. 20301 (Apr. 19, 2006) [pdf]. The 2006 version of the anti-trafficking clause included a general prohibition applicable to federal service contractors and a requirement to establish policies and procedures to ensure employee compliance. It required contractors to notify employees of the policy and to establish an appropriate employee awareness program. It required contractors to notify the government of an alleged violation and specified penalties for human trafficking violations. The original interim version of FAR 52.222-50 was also a mandatory flowdown in all subcontracts for the acquisition of services.

FAR 52.222-50 was expanded in 2007 to cover all federal contracts and subcontracts, including those for supplies and for commercial items. See 72 Fed. Reg. 46335 (Aug. 7, 2007). The clause was revised again in January 2009. See 74 Fed. Reg. 2741 (Jan. 15, 2009). The main substantive addition at that time was the addition of language making it clear that a contracting officer could consider the adoption of a Trafficking in Persons awareness program as a mitigating factor in determining the appropriate remedy for a trafficking violation.

The 2015 FAR amendments

The 2015 amendments to FAR Subpart 22.17 and FAR 52.222-50 go well beyond the original requirements. They introduce a list of specific types of conduct that had not previously appeared in the clause. They add a requirement for many contractors to implement trafficking compliance plans and to certify the absence of any trafficking activities every year. They also modify the mandatory disclosure obligations and specify the minimum level of cooperation required of contractors responding to a trafficking investigation. Finally, the amendments to the FAR clause expand the list of contracting relationships subject to the anti-trafficking clause.
Continue Reading The 2015 amendments to the FAR rule on human trafficking

Submitted by Husch Blackwell Associate Kayt Kopen

Federal contractors will soon need to update their Equal Employment Opportunity policies and their Affirmative Action Plans. According to an announcement by DOL’s Office of Federal Contract Compliance Programs, federal contracts and subcontracts awarded or modified after April 8, 2015, must include new contract language prohibiting discrimination …

President Obama signed an Executive Order raising the minimum wage for employees of federal contractors on February 12, 2014. Our earlier entry on the issue discusses how a higher minimum wage will affect current contractors. It looks like more waiting will be required before the true impact will be known.

The Executive Order calls for the Secretary of Labor and the FAR Council to draft regulations and contract provisions implementing the new minimum wage and to publish them later this year. But the Executive Order also includes some useful guidance.

Here are the key takeaways—…

Continue Reading Obama’s Executive Order on the new federal contractor minimum wage