Congress recently passed legislation (Section 893 0f the National Defense Authorization Act of 2011) requiring the Secretary of Defense to develop a program ensuring that “contractor business systems” provide timely, reliable information for the management of Department of Defense programs.  “Contractor business systems” include accounting systems, estimating systems, earned value management systems, material management and accounting systems, and property management systems. 

The program required by this legislation will set requirements for contractor business systems, establish a process for reviewing contractor business systems, and provide for disapproval of any contractor business system that has a significant deficiency.  If a contractor business system is disapproved, DoD will work with the contractor to develop a corrective action plan.  Until the system is approved, DoD may withhold up to 10 percent of progress and other payments on cost type contracts with contractors that are covered by the Cost Accounting Standards.

The Percy Amendment gives American-owned bidders a ten percent price advantage when competing for State Department construction projects.  To qualify as American-owned, the statute requires evidence that the bidder has performed “similar construction work in the United States or at a United States diplomatic or consular establishment abroad.”  22 U.S.C. § 302(b)(4)(A).

The State Department regulation implementing the Percy Amendment does not allow for consideration of foreign construction experience.  It states that similar construction work must have been performed in the United States.  DOSAR 652.236-71.  This conflict was the subject of a recent bid protest decision in Perini Management Services, Inc., B-404261, et al. (December 17, 2010).

The Justice Department’s most recent fraud statistics are worth checking out if you follow enforcement of the False Claims Act.  The federal government is reporting that it collected over $3 billion in judgments and settlements in False Claims Act cases resolved through the end of Fiscal Year 2010. About 80 percent of the recoveries were…