Federal contractors can finally look forward to simplified small-business mentor-protege programs, but also must become keenly aware of wide-ranging changes affecting certain 8(a) business development and Native American-owned programs, new recertification requirements for certain multiple award contracts, or MACs, and small-business joint ventures.
For several years, we have witnessed the emergence of a statutory and regulatory framework to tighten controls on the export of emerging and critical technology, as well as the review of inward foreign investment into said technology. As was evident in the listing of Huawei and other Chinese technology giants, the United States has demonstrated a willingness to use alternative punitive measures against China. Whether the desired impact of this approach has been achieved is difficult to determine. We have, nevertheless, no reason to believe that the tide will ebb in 2020.
Earlier this month, the Government Accountability Office (“GAO”) issued its annual Bid Protest Report to Congress for Fiscal Year 2019. Mandated by the Competition in Contracting Act, the GAO’s yearly Bid Protest Report presents unique insight into the underlying GAO bid protest metrics over the course of a fiscal year, along with data on five-year trends in the GAO’s bid protest adjudication. The following chart provides a snapshot of the GAO’s statistics from FY 2019 through FY 2015:
One of the bedrock principles of federal contracting is the demand for “full and open competition through the use of competitive procedures.” In order to foster competition and reduce costs, the Competition in Contracting Act was passed into law in 1984 in an effort to enhance competition in procurements and thereby reduce costs, eliminate waste and abuse, and protect taxpayer dollars. The effort to root out corruption and promote competition continues with the recent announcement by the Department of Justice (DOJ) of the newly formed Procurement Collusion Strike Force (“Strike Force”), with additional details and training materials—and an imposing antitrust violation complaint form—available on its recently launched website.
There’s an often mistranslated Taoist adage that counsels “A journey of a thousand miles begins with a single step.” So it is presently with the Department of Defense’s (DoD’s) Cybersecurity Maturity Model Certification (CMMC), which continues its cybersecurity journey with the recently released update of standard CMMC .6.
In a rule published and effective October 9, 2019, China’s key manufacturers of video surveillance products have been added to the Bureau of Industry and Security (BIS) Entity List by an interagency End-User Review Committee (ERC) comprised of representatives of the Departments of Commerce State, Defense, Energy and, where appropriate, Treasury. The Entity List (15 CFR, Subchapter C, part 744, Supplement No. 4) identifies entities believed to be involved, or to pose a significant risk of being or becoming involved, in activities contrary to the national security or foreign policy interests of the United States.
So you want to acquire a government contractor? Makes sense, and you’re not alone. Over the past few years, the federal contracting landscape continues to evolve as a result of mergers and acquisitions (M&A), primarily involving the acquisition of small and midsize contractors by larger entities as a means to quickly expand into new federal markets. This trend is especially prevalent in the information technology (IT) market, where the acquisition of small or midsize IT firms with new capabilities can provide larger firms with shiny new toys to share with their roster of government clients to gain a larger share of the federal IT “pie,” if not create—almost overnight—new IT market leaders in areas such as cloud computing, cybersecurity, software, and predictive intelligence.
On August 6, 2014, plaintiff-relator Andrew Scollick filed a complaint in the United States District Court for the District of Columbia against eighteen defendants for multiple violations of the False Claims Act (“FCA”) in connection with an alleged scheme to submit bids and obtain millions of dollars in government construction contracts by fraudulently claiming or obtaining service-disabled veteran-owned small business (“SDVOSB”) status, HUBZone status, or Section 8(a) status, when the bidders did not qualify for the statuses claimed. United States ex. rel. Scollick v. Narula, et al., No. 14-cv-1339 (D.D.C.). Unique in this case were not the claims against the contractors, who were alleged to have falsely certified their status or ownership. Rather, what set this case apart was that Scollick also named as defendants the insurance broker who helped secure the bonding that the contractor defendants needed to bid and obtain the contracts, and the surety that issued bid and performance bonds to the contractor defendants. Scollick alleged that the bonding companies “knew or should have known” that the construction companies were shells acting as fronts for larger, non-veteran-owned entities violating the government’s contracting requirements—and thus the bonding companies should be held equally liable with the contractors for “indirect presentment” and “reverse false claims” under the FCA.
As the frequency and sophistication of existential threats to national security over the past decade have drastically increased, the United States’ reliance on software to identify threats, rapidly share information, and manage its military resources has increased. Accordingly, the federal government’s ability to timely develop, procure, and deploy software to the field has been—and continues to be—a critical component of national security. Notwithstanding the growing importance of software to national security, the Department of Defense (DoD) software-acquisition process mirrors the lengthy, inflexible process typically reserved for the acquisition of major weapon systems. As a result, the DoD’s software development and acquisition cycles are significantly longer for their commercial counterparts, thus affecting the DoD’s ability to deliver timely solutions to users and rapidly respond to urgent threats.
The Trump administration’s focus on enhancing “Buy American” requirements in federal procurement took a leap forward on July 15, 2019, with the issuance of an Executive Order (EO) on Maximizing Use of American-Made Goods, Products, and Materials. Unlike the administration’s previous executive orders – Executive Order 13788 of April 18, 2017 (Buy American and Hire American) and Executive Order 13858 of January 31, 2019 (Strengthening Buy American Preferences for Infrastructure Projects), this EO contains instructions to the FAR Council to change regulations that have been in place since the Eisenhower administration, tightening restrictions on acquiring foreign end products. In particular, the EO makes dramatic changes to the domestic origin requirements for iron and steel products.